Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
Foreign Affairs, Defence and Trade Legislation Committee
25/10/2017
Estimates
DEFENCE PORTFOLIO
Department of Defence

Department of Defence

[09:03]

CHAIR: I now welcome Senator the Hon. Marise Payne, Minister for Defence; Mr Greg Moriarty, the newly appointed Secretary to the Department of Defence; Vice Admiral Ray Griggs, Acting Chief of the Defence Force; and officers of the Department of Defence. Minister, do you wish to make an opening statement?

Senator Payne: Not in detail, Madam Chair, other than to say welcome to the role as chair of the Foreign Affairs, Defence and Trade Legislation Committee. We look forward to working with you. Can I also welcome Secretary Moriarty to his first Senate estimates experience in his new capacity as secretary. I'm sure he will enjoy it as much as the rest of us do.

CHAIR: We'll have a survey afterwards! Mr Moriarty, do you wish to make an opening statement?

Mr Moriarty : No, thank you, Senator.

CHAIR: Vice Admiral Griggs, how about you?

Vice Adm. Griggs : Thank you, Chair. Welcome to you as chair of the committee, and we look forward to working with you as this committee continues its important work. Good morning, senators. As you are aware, the Chief of the Defence Force is currently in Washington attending meetings with 75 global coalition partners to discussion our ongoing efforts to counter violent extremism, so I will be representing Air Chief Marshal Binskin today in my capacity as Acting Chief of the Defence Force.

Senators, this month marks three years since the Australian Defence Force commenced air operations in Iraq. On 9 October 2014 the Australian Air Task Group flew the first of nearly 4,100 sorties that it's flown since that time. Operation OKRA, as it is known, has evolved at the Iraqi government's request to include the Special Operations Task Group's advise and assist mission and the combined Australia-New Zealand building partner capacity mission at Taji. In that time Australian personnel have helped the Iraqi security forces to liberate six million civilians who were trapped and forced to live under the inhumane control of Daesh. They have provided military support and training that has enabled the Iraqis to retake Mosul, Tal Afar, Hawija and Fallujah. Across Iraq and Syria, Daesh has lost around 83 per cent of the territory that it once controlled under the murderous caliphate. The self-proclaimed capital, Raqqa, has fallen and the five-month-long siege in the Philippine city of Marawi is now over. These victories demonstrate significant progress in what is a global fight against Daesh. The terrorists are on the back foot, but it is not the end of the fight. Some of the remaining Daesh strongholds are in difficult terrain and present different tactical problems from the urban fighting experience to date in cities such as Mosul and Raqqa.

Australia and the global coalition remain an important element in the fight against terrorism. We must maintain the momentum and continue to eradicate Daesh and other violent extremists wherever they seek to take root. Experience has shown us that we also need to continue to strengthen the local military and security forces, who are very much on the frontline in this fight, so that they have the skills necessary to hold territory and maintain security. This is the focus of much of our work in Iraq and of our ongoing efforts in Afghanistan, where the Afghan national defence and security forces have had responsibility for security since January 2015.

Afghanistan remains difficult and complex. While the Taliban is still considered the largest threat, Islamic State Khorasan Province is fighting for a foothold. Our contribution there is focused specifically on training, advising and assisting the Afghan forces to defend their country from these threats and other destabilising influences. From time to time there are setbacks, including in Uruzgan province, but we should be encouraged that throughout the 2017 fighting season Afghan security forces prevented the Taliban from its strategic objective of capturing provincial centres such as Tarin Kowt. This has allowed the Afghan government to retain control of all key military and civilian infrastructure.

Long-term improvement in both Afghanistan and Iraq can only occur when military efforts are supported by a wider political, diplomatic, economic and security strategy. Australia's security strategy includes a maritime component to our operations in the Middle East. The Royal Australian Navy has had a near continuous presence in that region since 1990. Our ships and their crews primarily conduct counterterrorism, counterpiracy and, in recent years, counternarcotic operations. This is not the only focus, though. Last month HMAS Newcastle completed a two-week attachment with the United States Navy's Fifth Fleet in the Arabian Gulf. Newcastle supported the USS Nimitz carrier strike group, escorting the ships safely through the gulf. The attachment also provided an opportunity for Newcastle to conduct a number of flying serials with their embarked MH60 Romeo helicopter. For the first time on operations, it also utilised the ScanEagle unmanned aerial system.

We have maintained these commitments while continuing to work in Australia and the near region. Yet there has been some recent commentary in weeks regarding what others perceive to be an inadequate level of regional engagement. Senators, in addition to our regular ship transits and port visits, over the past six months the ADF have conducted four operations, including Operation Hannah in support of the Papua New Guinea national election and, most recently, Operation Vanuatu Assist in response to the Ambae Island volcano threat, while continuing to support PNG security preparations in advance of the 2018 APEC meetings. Additionally, we've also undertaken seven international exercises: Freedom Guardian, Pacific Protector, Talisman Sabre, Bersama Shield, Balikatan, AUSINDEX and Southern Katipo. We also commenced one of our most critical regional engagements deploying two AP3C Orion aircraft to the Philippines to assist the fight in the southern Philippines to prevent Daesh-affiliated terrorists from establishing themselves in the region.

Yesterday, as you may have seen, Minister for Defence and her Philippine counterpart announced an expansion of our assistance to the armed forces of the Philippines. Under our program, the Philippines and Australian defence forces will work together to enhance intelligence, surveillance and reconnaissance, improve information sharing, and conduct counterterrorism-related training in the Philippines and here in Australia.

The conflict in the southern Philippines highlights the crucial need for South-East Asian nations to proactively work together to counter terrorism in the region. Such cooperation can only be achieved when neighbouring nations have strong, established relationships built on trust and regular engagement. This is the premise behind Joint Task Group Indo-Pacific Endeavour. This joint task group is on an 11-week deployment, as part of Australia's ongoing efforts to promote security and stability, in the region through bilateral and multilateral engagement, training and capacity building with our key partners. After more than a year in planning, Indo-Pacific Endeavour, or IPE, left Australia on 4 September with six ships and more than 1300 personnel, making it the largest coordinated task group to deploy to the region in more than 40 years.

Indo-Pacific Endeavour is only surpassed this year by the combined Australian-US exercise, Talisman Sabre 2017, which included around 33,000 participants, 36 warships and more than 220 aircraft. One of the key serials in this year's exercise was the combined amphibious assault involving Australian, US and New Zealand forces, which was observed by representatives from more than 24 countries.

The scope and tempo of our operations, exercises and engagements over the past five to six months have been substantial. I'm sure you will agree: our people have done an excellent job with outstanding results. Yet this is not to detract from our commitment to ongoing improvement in mental health care for our people and cultural reform. In the coming months, we will launch the next iteration of Defence's cultural change program, Pathway to Change, following extensive consultation with personnel in all levels.

Earlier this month, the secretary and I released the Defence Mental Health and Wellbeing Strategy 2018-2023 under the banner Fit to Fight, Fit to Work, Fit for Life. The strategy reinforces mental health and wellbeing as a priority and builds on the 2011 strategy as well as incorporating the findings of recent reviews and inquiries. Importantly, the new strategy adopts a one-Defence approach, including Defence's civilian workforce for the first time. Our aim is to ensure that, where people need assistance, appropriate care is available and that they have the confidence to take that first step in seeking that help. Thank you.

CHAIR: Thank you very much, Vice Admiral. Could we get a copy of that tabled for senators? We'll now proceed to questions.

Senator ABETZ: First of all, congratulations to you, Chair, on your election. Welcome, Minister and officials. Vice Admiral, can I add my agreement, as I'm sure all colleagues do, to salute the efforts of our men and women in the field. I have a brief and discreet list of questions. In relation to the latest enterprise agreement, is someone able to tell us when that came into being?

Ms Kelley : The enterprise agreement was voted up on—

Senator ABETZ: When was it ratified by the Fair Work Commission or voted up, but just generally?

Ms Kelley : It commenced on 16 August, and first salary took effect on 24th.

Senator ABETZ: As part of those enterprise agreement negotiations were—and I'll use the non-technical term—side deals done in relation to the agreement? By that, I mean any separate agreement, arrangement, protocol entered into with, for example, a union or a group of workers that is not actually part of the official enterprise agreement that was ratified by the Fair Work Commission.

Ms Kelley : No.

Senator ABETZ: None?

Ms Kelley : None.

Senator KIM CARR: Perhaps I could help the committee by establishing why it is that a number of questions that were put through the Senate committee on shipbuilding to the defence department have not been answered. Mr Gillis, I raised this matter at our last hearings, and you indicated to me you were on leave and, as a consequence, the approval processes had not been undertaken. You've been back a while?

Mr Gillis : Yes, about two or three weeks now.

Senator KIM CARR: So, where are the answers?

Senator Payne: Which numbers are you after?

Senator KIM CARR: We don't have answers in the inquiries. These are matters—

Senator Payne: These are not estimates questions?

Senator KIM CARR: No, these are questions to the shipbuilding inquiry.

Mr Gillis : Can you give me five minutes, so I can follow up with those specific ones?

Senator KIM CARR: Yes. There is one in particular, while you're there, that goes back to June. That's relating to—

Mr Gillis : Is that in the shipbuilding inquiry?

Senator KIM CARR: Yes, shipbuilding. That relates to the consolidation of a number of questions, which I presume was done within the department. You will correct me if I'm wrong in that assumption. That question was related to this: when the shipbuilding plan was announced in May 2017, the government stated 60 Australians were currently in France learning design skills as part of the future shipbuilding program. I wanted to know the number of Australians in France at that time, and how many more would be going over to France. Of the 60, where did they come from? Did they come from a particular industry? Were there any particular recruitment processes?

Mr Gillis : I think the easiest way to help you is to bring Rear Admiral Sammut, who can answer questions. The issue is we are recruiting and moving people into Cherbourg almost on a weekly basis.

Senator KIM CARR: But you can you tell me why the answers have not been presented to the committee, can't you? You're the responsible officer.

Mr Gillis : I will check, and I will get the admiral here to answer questions.

Senator KIM CARR: I still want the answer about the delay in response. I think there's due process required here.

Mr Gillis : Understood. That's our responsibility to provide those.

Senator KIM CARR: Admiral, perhaps you can give me the information—which is the other part of the process. So, there were 60 Australians in France as of May? Is that the case?

Rear Adm. Sammut : I will need to confirm how many Australians were actually in France as of May. We are currently building up the number of Australians working in Cherbourg alongside Naval Group. That is a combination of Commonwealth personnel, members of the Future Submarine Program office and Australians from Naval Group Australia, who were also over there training with Naval Group on the design of the Future Submarine.

Senator KIM CARR: The government said there were 60 in May. I presume the government wouldn't get that figure wrong, would they?

Rear Adm. Sammut : Again, I will need to check on the numbers that were actually in France in May to give you an accurate answer.

Senator KIM CARR: And you will be able to tell me how many there are now? It may well have been to 60 in May and a different number now? You don't have that matter—

Senator Payne: We will get you both numbers.

Rear Adm. Sammut : We can provide those numbers.

Senator KIM CARR: Now? Or when?

Rear Adm. Sammut : I can inform you at this stage that we have 17 Australians as members of the Future Submarine program working in our resident project office that was opened on 9 July. We continue to build up the numbers and we will be working up to approximately 50 personnel there. Naval Group Australia is making its own arrangements to send Australians over there. We will need to confirm with them the actual numbers that they have at this particular point.

Senator KIM CARR: The 60 that were referred to—are you able to tell me where they are to be drawn from?

Rear Adm. Sammut : I will need to, as I said, confirm the number that were actually present in May.

Senator KIM CARR: So you don't have that information?

Rear Adm. Sammut : No, I don't have that information.

Senator Payne: When you say 'drawn from', do you mean in relation to drawn from within Defence and what parts?

Senator KIM CARR: The question actually asks companies or industry—where have they been recruited?

Senator Payne: And I don't have the benefit of the question, but we will go to that detail.

Senator KIM CARR: And that's why it will be helpful now.

Mr Gillis : They're still chasing it up.

Senator KIM CARR: And you still can't tell me why the answer has not been able to be provided since June?

Mr Gillis : With the number of questions—

Senator Payne: They've said they will chase it up.

Mr Gillis : They're just chasing it up.

Senator Gallacher interjecting

CHAIR: I think the officer has answered Senator Carr's question. Let's give him a chance.

Senator KIM CARR: You'd prefer me to come back to that, would you?

Mr Gillis : You can see that they're just actually grabbing the pile—

Senator KIM CARR: All right, I will come back. There's a few other questions I want to pursue in that regard. There was one on 14 June. We said that naval architects were being paid $1 million each as private contractors. That was based on an ABC report. I asked: was that media report accurate? Are you able to tell me that?

Rear Adm. Sammut : Do you have the question on notice?

Senator KIM CARR: These are questions put to the Senate inquiry. They don't have numbers.

Senator Payne: So you asked them verbally and they were taken on notice? Is that what you're saying?

Senator KIM CARR: No. They were already on notice. They've been on notice for a while. That's why I'm pursuing this matter now. I'm trying to find out why it is there's been this delay. Last time I sought an answer, Mr Gillis, you said it was because you had just come back from leave.

Mr Gillis : Some of those I hadn't personally seen and I was wanting to clear them. I had cleared a number of those. I'm just trying to find out with the staff—

Senator KIM CARR: Where they are now.

Mr Gillis : exactly where they are. That might take me another 10 or 15 minutes just to go through that process.

Senator KIM CARR: Then there's a further question about whether the department was paying $5.5 million for eight contractors from the International Centre for Complex Project Management as part of the Future Submarine program. Are you able to tell me if you have information on that matter?

Rear Adm. Sammut : A number of these questions you're asking were answered in questions on notice.

Senator KIM CARR: So there have been answers returned?

Rear Adm. Sammut : Yes.

Senator KIM CARR: On this particular matter?

Rear Adm. Sammut : Yes.

Senator KIM CARR: Thank you. That would be good.

Mr Gillis : It may be the fact that—

Senator KIM CARR: They will come to the different committee. That might help explain it.

Mr Gillis : It may be the difference is the question on notice for this meeting, because we don't have a numbered system—I know that that particular question was answered. So we're just trying to work out where, administratively, it has been sent. It has probably been sent to you at the other committee, not to this committee.

Senator KIM CARR: All right. I will ask the secretariat—

Senator Payne: It's the same secretariat.

Senator KIM CARR: if it's possible that information has been provided in some other form. I will come back when you have your answers and the other matters. On the question of consultants and contractors, there was a question, question No. 119, which was returned to the committee. This is a question from July going to the issue of the cost of consultants in regard to the Naval Shipbuilding Plan. The advice you provided the committee was there was $146 million spent on consultants and $166 million spent on contractors. They were forecasts. Have you got the particular question on notice available? I would like an update on that. Is that possible?

Rear Adm. Sammut : There were a number of questions about contractors across the department, and there were a number of questions directed to the Future Submarine program about its contractors. I'm just having a little bit of difficulty trying to define that. Could I refer the committee to question reference No. 6. This was, in fact, to the Senate Economics References Committee. I think I found the actual question that was being asked. It was about the ABC report on 14 June 2017 that six naval architects were being paid almost a million dollars each as private contractors to work on the Future Submarine program.

Senator KIM CARR: That was the previous question I was seeking, but—

Rear Adm. Sammut : I can inform you that the article is misleading. There's been a number of naval architects that have been contracted from Australian industry—that includes companies such as ASC and Pacific Marine Batteries. The cost of their engagements covers all sorts of expenses. It's not the payment of purely their wages or salaries. There are travel-related costs, company costs and so forth. It is necessary for us to be able to engage these naval architects to ensure that we have the right level of expertise applied to the engineering judgements that are necessary for decisions made on the Future Submarine, as well as the work that we continue to do on the Collins sustainment program. I should also add that these personnel are mentoring junior naval architects in the Australian Public Service and that continue to be recruited to the Future Submarine program.

Senator KIM CARR: I see. So the figure of a million dollars per architect was actually correct?

Rear Adm. Sammut : It doesn't equate to a million dollars per architect per year. There are engagements over a number of years. We don't engage naval architects for the period of a year; they're engaged for several years so that we can have the continuity of their service. And I don't have the breakdown of all of the costs, but to claim that each naval architect that we engage from industry is receiving a million dollars is incorrect.

Senator KIM CARR: I think the question said it was almost a million dollars each, as private contractors. So is that the cost per contractor, of a million dollars?

Rear Adm. Sammut : That would be false if you're talking about the contractor. The contractor is—

Senator KIM CARR: That's what the question said.

Rear Adm. Sammut : the individual. There are contracts with the companies, and, as we said, that would cover a number of things over many years, not just simply one year.

Senator KIM CARR: So for the six naval architects, it was $6 million, was it?

Rear Adm. Sammut : I will need to get to a breakdown of the actual contracts and provide that on notice.

Senator KIM CARR: The question referred to 'contractors'—'as private contractors'.

Rear Adm. Sammut : Yes, 'each, as private contractors' is the way the question is worded to us.

Senator KIM CARR: Yes, that is right. You're saying—

Rear Adm. Sammut : I'm saying that each contractor does not get a million dollars.

Senator KIM CARR: But the cost of the contract was a million dollars?

Rear Adm. Sammut : The cost of the contract I will have to provide separately to you.

Senator KIM CARR: Thank you, and I would appreciate it if we could get these in written form; that would be very helpful. I turn now to the question I did put to you, Rear Admiral, and that was question No. 119. I thank you for responding to that question. You said that the operating budget—have you got that there?

Rear Adm. Sammut : Yes, I'm coming to it—yes, I have the question.

Senator KIM CARR: That question advises us that there's $146 million for consultants and $166 million for contractors. That's a forecast, is it? Do you see that on the top of the page, the second paragraph: 'The budget statements for consultants and contractors as follows, A and B'?

Rear Adm. Sammut : This is the Defence budget for consultants across the department, not in my program.

Senator KIM CARR: Then you can't answer the question.

Rear Adm. Sammut : The question asked?

Senator KIM CARR: No, I'm asking you the question.

Senator Payne: I'll ask the CFO, Mr Prior, to join us.

Senator KIM CARR: It may well be that I have to ask another officer, that's all.

Rear Adm. Sammut : Yes, that's correct. If it's about the department, that would have to be directed to the CFO.

Senator KIM CARR: You will find that there are questions that relate directly to the submarines.

Rear Adm. Sammut : I understand.

Senator KIM CARR: Mr Prior, I take it the Defence department keeps track of these forecasts?

Mr Prior : We do indeed.

Senator KIM CARR: How are you going with that budget?

Mr Prior : In terms of these budget lines?

Senator KIM CARR: Yes.

Mr Prior : How are we going in what sense?

Senator KIM CARR: Is the department meeting those budget estimates at this point, year to date?

Mr Prior : Year to date I don't have exactly in front of me but generally, from my recollection, we are tracking close to those budget estimates. Yes, we are.

Senator KIM CARR: Could I turn to the Future Submarine office specifically. How many APS staff are now in the office?

Rear Adm. Sammut : In the program office at the moment we have 33 APS staff, we have three Australian Defence Force members and we have 88 contractors.

Senator KIM CARR: In response to that question you talked about mentoring APS staff in terms of their future role. How many of those 88 contractors are actually undertaking a mentoring role?

Rear Adm. Sammut : The mentoring is done at different levels in the organisation. We can start with director level, where we have about 11 director-level staff who are mentoring junior staff. I need to add that mentoring takes place at several levels in the organisation—from directors, to people working with them, right down to more junior engineers with experience in submarine programs who are mentoring APS staff, such as graduates who enter our program and learn their skills from the beginning of their careers. There are a range of people. I can't give you an exact number as to how many people are actually mentoring. Mentoring is an ongoing activity that is taking place across the program. It takes place as part of the engineering reviews that we do, as part of the general work that we do with Naval Group, and so on.

Senator KIM CARR: Is there a particular program? How is the mentoring managed?

Rear Adm. Sammut : The mentoring is managed, in the first instance, by writing into the contracts of the people we engage that a key role they have is mentoring staff they'll be working with. It's taking even more form now as the work that we do with Naval Group becomes defined as part of the design process that we're undertaking. It's going to expand as we bring more graduates into the Future Submarine program and, indeed, more graduates specifically into naval construction programs. That's work that we're progressing with the support of DPG: how we establish a means by which graduates can be streamed into naval construction roles and, as a result of that, develop career paths that will give them a future within naval construction programs that we're going to be undertaking for a long time in this country.

Senator Payne: DPG is the Defence People Group.

Rear Adm. Sammut : I beg your pardon.

Senator KIM CARR: Yes. So is it a bit ad hoc?

Rear Adm. Sammut : No. It's being developed as we put all of these programs into place—as we commence the graduate program, as we do the work we operate with Naval Group and as we endeavour to grow the people we will need into the future. At this stage we do have a preponderance of people from industry in the program, and a large part of our recruitment now is aimed at trying to get junior people into the program, people who will have a career path ahead of them and can capitalise on the time they will spend in the program at a junior level as we're doing these very formative stages of design.

Senator KIM CARR: So there's no program yet to speak of? You're pretty much feeling your way?

Mr Johnson : Within the department an expression of interest is open for the first position to run the mentoring program, and we will select that person before the end of this calendar year. We're doing that with the direct support of the Defence People Group. It is a broader initiative. It's starting in submarines. It will expand from submarines into ships. In the case of the submarine program, our focus is to build the core Australian Public Service team that will focus on the construction, certification, test and delivery of submarines and less on design, because, of course, we'll be in production for 25 years delivering submarines et cetera. So that's the focus. These things are standing up in a deliberate and coordinated manner and are well supported by the Defence People Group.

Senator KIM CARR: You're saying it's a coordinated matter, but it sounds to me as if it's evolving.

Mr Johnson : It is evolving, yes, sir. We're hiring now. We're building a team now.

Senator KIM CARR: Okay. You're building a team. I see that the number of contractors appears to have doubled from the point at which this question was answered. It has gone to 43 contractors to 88. Is that correct?

Rear Adm. Sammut : No. We are growing the number of contractors, but it hasn't been a doubling. The number of contractors referred to in the question on notice was specifically those with engineering and technical skills. We do have contractors supporting us with other disciplines such as program management, industry engagement, procurement and other roles that are necessary for the complete delivery of the program.

Senator KIM CARR: So what's the increase then if it's not—

Rear Adm. Sammut : I can't tell you the exact increase from when we answered this question from July to where we are today. I believe it would be in the order of seven to 10 personnel. I'll check our records.

Senator KIM CARR: Thank you.

Rear Adm. Sammut : We are growing, though, the number of contracted staff and the number of APS staff that will be necessary to deliver this most demanding of programs that we are running at the moment.

Senator KIM CARR: Thank you. There's a reference here to $3.6 million for the Naval Shipbuilding Taskforce that's been spent on non-Australian Public Service activities. Can I get an update on that figure?

Rear Adm. Sammut : I direct that question to Mr Mark Ablong.

Mr Ablong : Could you repeat the question for me, please?

Senator KIM CARR: Yes, the question relates to 5B in the answer.

Mr Ablong : Which question on notice was it?

Senator KIM CARR: The question on notice is 119. There is a reference here that, as of 22 May, Naval Shipbuilding Taskforce expended a total of approximately $3.6 million on non-Australian Public Service activities. Could I get an update on that figure? If it's $3.6 million at that date, what's the figure now?

Mr Ablong : I will get you an update on the exact figure now, but, in essence, this is for the Naval Shipbuilding Advisory Board and its activities in support of the government's consideration of the naval shipbuilding activities currently underway.

Senator KIM CARR: I see. How many times has the advisory board met?

Mr Ablong : I will get you the exact number. It meets here in Australia probably every three months and it meets out of session via telephone calls between the members on a more regular basis than that, but I'll get you the exact number.

Senator KIM CARR: Yes. So it has met regularly, has it?

Mr Ablong : Yes, very regularly.

Senator KITCHING: Who's on that board? Is this DCNS—

Mr Ablong : No, the Naval Shipbuilding Advisory Board is chaired by Professor Don Winter. I can give you the names of the other members.

Senator KITCHING: Thank you.

Senator KIM CARR: And you can give us the dates on which it's met?

Mr Ablong : I'll get those dates and give them to you.

Senator KIM CARR: Thank you. Do they have minutes of meetings?

Mr Ablong : They don't have minutes of meetings. They provide advice to the minister and other members of the National Security Committee of Cabinet, but they don't do formal minutes of their meetings.

Senator KIM CARR: And you've indicated how many people are members of the board and what their attendance has been?

Mr Ablong : Their attendance?

Senator KIM CARR: Yes.

Mr Ablong : Yes, we can do that.

Senator KITCHING: I think Mr Ablong was going to give us the names as well—

Senator KIM CARR: Yes, I understood that. Is that there now? They have been published, haven't they?

Mr Ablong : Yes, they have. There was a ministerial release that went out with the names of members, and it's just in my other pack, if you don't mind me grabbing that.

Senator KIM CARR: That's fine. I understood there was a press release.

Mr Ablong : Yes, there was.

Senator KIM CARR: If you've got a copy of that, that'd be good. And you're saying they've met every three months?

Mr Ablong : About. So the press release was released on 17 December 2016. The members of the advisory board are Professor Don Winter, the Hon. Ms Emily DeRocco, Rear Admiral Thomas Eckles (Ret) from the US, Mr Irwin Edenzon, Mr Ron Finlay, Vice Admiral William Hilarides (Ret), Ms Lisa Paul, Ms Becky Stewart and Vice Admiral Paul Sullivan (Ret)—

Senator KIM CARR: You've told us now three times that they met every three months and they have met out of session via telephone.

Mr Ablong : Yes. I will get you details of that.

Senator KIM CARR: But they were not available to appear before the Senate committee?

Mr Ablong : Professor Winter was not in Australia at the time that the last hearing was on.

Senator KIM CARR: And no-one else was available from the board?

Mr Ablong : The US members weren't in Australia at the time, and the Australian members were outside of the location of the hearing—

Senator KIM CARR: So they're now available?

Mr Ablong : I believe that they can be available if requested.

Senator KIM CARR: If the Senate committee requires it. Is that the case?

Mr Ablong : Indeed.

Senator Payne: I'm not sure, Senator. I think the nature of the role of the board in providing advice to government and indeed, as Mr Ablong said, directly to the National Security Committee and the Prime Minister on these issues means that their role is not typical in some ways. They're not public servants. They're, at best, probably consultants, I think, in the terminology we might use. I understand a letter was sent to secretariat—I don't have it to hand—in relation to the request for them to appear. But I'll review that and come back to the committee.

Senator KIM CARR: Yes. Could I get a breakdown of what the $3.6 million was spent on? I mean, an advisory board that costs $3.6 million?

Mr Ablong : I'll get you a breakdown.

Senator KIM CARR: Thank you. Is that the only non-Australian Public Service activity that that item refers to?

Mr Ablong : There were also a number of studies conducted by the RAND Corporation to support the development of the Naval Shipbuilding Plan, as well as a couple of other consultancies on specific areas of workforce development and the like.

Senator KIM CARR: I see. You know I'm going to have to seek information on what those consultancies were.

Mr Ablong : Yes. I'll get you that information.

Senator KITCHING: Is it possible to get a copy of the RAND Corporation report—

Senator Payne: Which one? There are more than one.

Senator KIM CARR: The ones that are referred to in these—

Senator KITCHING: The ones Mr Ablong was just—

Mr Ablong : Those that have been completed—they're still undertaking some elements of work—are available on the RAND website, but we'll make sure you have access to them.

Senator KIM CARR: Thank you. How are we going with the answers to the other questions?

Mr Gillis : There are still five outstanding questions on notice or questions from the shipbuilding taskforce that have not been finalised in the clearance process. I will undertake to get those.

Senator KIM CARR: You need to tell me where they are in the clearance process.

Mr Gillis : They're in the clearance process.

Senator KIM CARR: No, no. We've been through this, so let's get to the point. On whose desk are they?

Mr Gillis : I'll have to find that out.

Senator KIM CARR: That's not particularly satisfactory.

Mr Gillis : I understand that.

Senator KIM CARR: You know that we need this information. You told me last time that you were the problem—you had just come back from leave. Have you cleared them?

Mr Gillis : I've cleared some of them, but they still have to go through the secretary.

Senator KIM CARR: That's fine.

Mr Gillis : Sometimes as I write something, or sometimes as my staff write something, somebody has a query and it goes back. Some of those are in the process of answering further additional information. You've asked quite complex questions and we are making sure that we provide you with an accurate answer.

Senator KIM CARR: We're not here to play mickey mouse.

Mr Gillis : I understand.

Senator KIM CARR: This is a proper job of the Senate. If the problem is within the department, that's one thing. But if you have cleared them, where are the ones that you have cleared—with the secretary or with the minister?

Mr Gillis : I'll have to find that out for you. The advice I've got is that they're still in the clearance process.

Senator KIM CARR: How long have they been in the clearance process?

Mr Gillis : Sometimes when we draft a response, there are questions that might be asked either by the minister, by the staff, by the secretary—

Senator KIM CARR: Which minister?

Mr Gillis : It depends on the nature of the questions. We have a Minister for Defence Industry and a Minister for Defence. Sometimes they both need to collaborate on those. Sometimes we need to ask questions. Of the questions that were asked, there are five that are still outstanding.

Senator KIM CARR: Minister Payne, have you got any of these questions in your office?

Senator Payne: Not that I'm immediately aware of, but, as we are pursuing these, I'm checking with my staff now.

Senator KIM CARR: How long do you think this is going to take us, Mr Gillis?

Mr Gillis : I will undertake to get them as fast as I practically can to you, but I have got to find out exactly where they are.

Senator KIM CARR: This question from June—

Senator GALLACHER: It's four months!

Senator KIM CARR: where is it?

Mr Gillis : Which specific question?

Senator KIM CARR: The question from June that I referred to a moment ago. It was consolidated by your officers, as I understand it, into one question. It was four or five questions, known as 'six' within the committee. Where is it?

Senator Payne: What does it relate to, Senator Carr? I'm not familiar with it.

Senator KIM CARR: This was the one that related to the Australians overseas.

Senator Payne: The Australians in Cherbourg?

Senator KIM CARR: Yes.

Senator Payne: I am not familiar with that, but I will—

Mr Gillis : I think Rear Admiral Sammut undertook to get you an answer.

Senator KIM CARR: Yes, I know.

Senator Payne: We think it's been tabled potentially in the last day. Let me check on that.

Senator KIM CARR: Thank you.

CHAIR: That would be with the Economics committee secretary.

Senator KIM CARR: No, it's not. Before I walked into this room, I checked with the secretariat. They have not received anything. That is as of nine o'clock this morning.

Senator Payne: We will cross-check.

Mr Gillis : Can you give me a list of the questions that you're specifically after?

Senator Payne: There are nine, I think. Is that right?

Senator KIM CARR: I'm surprised that with the worldwide resources of the defence department, you don't have a list.

Mr Gillis : I can get a list, but I'm trying to work out specifically which ones—

Senator KIM CARR: Upon the release of the Naval Shipbuilding Plan in May 2017, the government stated that 60 Australians were currently in France. My question had six subsections arising from that. If necessary, we will provide you with the question again. I can't believe that you would have lost the question.

Mr Gillis : I think Rear Admiral Sammut actually answered that.

Senator KIM CARR: No, he answered part of that question. He said he would need to get more information. What I can't understand is why the question has not been answered. You've had it since June.

Senator Payne: Neither can I, and I'm going to check.

Senator KITCHING: Could I ask Rear Admiral Sammut a clarifying question. Are the contractors in France at the shipbuilding yards in Cherbourg?

Rear Adm. Sammut : That's correct. They're in Cherbourg.

Senator KITCHING: Are they still there? Are they coming back?

Rear Adm. Sammut : Are we talking about—

Senator KITCHING: The contractors.

Rear Adm. Sammut : There are people who will rotate through Cherbourg. That's why I need to come back to you in terms of the number that may have been there in May versus now.

Senator Payne: We are going to have a very significant presence in Cherbourg, a significant presence in France and Australia that is going to go on through the development of the Future Submarine program. It's not a week's visit and end of story.

Senator KITCHING: I understand that. Is that until we have cut the first lot of steel? Is that going to be for the life of the program?

Rear Adm. Sammut : No, that's—

Senator Payne: It is obviously an important relationship and one we have to work closely with the French on. We have facilities in Cherbourg as well. And the support of the Defence members as part of that process is very important to the design and construction phases for the submarine. As I said, we are also going to end up with French members in Australia as well.

Senator KITCHING: So in fact it could be out till 2050? It will be a relationship that would continue for that long? What I am really, I guess, asking is: will the capacity be here in order to have sovereign capacity?

Rear Adm. Sammut : Indeed. Indeed, it will.

Senator KITCHING: Thank you.

Rear Adm. Sammut : The aim is that, during these initial stages of the program, we will have Australians go to Cherbourg where they will undertake courses with Naval Group, and that is going to be the transfer of the know-how and the know-why that those Australians will bring back to Australia that will give us the sovereign capacity that we are seeking to understand—the design of the submarine—and to manage the design throughout the life of the boat.

Senator KITCHING: Thank you.

CHAIR: Senator Carr.

Senator KIM CARR: I understand that Minister Payne would have some appreciation of Senate processes so it doesn't surprise me—

Senator Payne: Some, yes.

Senator KIM CARR: Some appreciation. A Senate minister is much more sensitive to these questions. I fully acknowledge that. I do have to ask, are these questions with Minister Pyne? Is that the hold-up?

Senator Payne: I am actually not sure. I have asked for clarification of that. As I understand it, we are talking about nine questions. I will find out for you where those nine questions are and I will provide you with an answer.

Senator KIM CARR: If they are with Minister Pyne, we would like to know that too.

Senator Payne: Yes, I appreciate that.

CHAIR: Do you want to return to that at a later date, Senator Carr?

Senator KIM CARR: I certainly do. Thank you very much. I have more questions on matters that arise from the Senate hearing. I have taken some time, and it may well be that other senators want to have a crack.

CHAIR: Thank you. Senator Gallacher.

Senator GALLACHER: Thank you, Chair. I am going to traverse some issues that go to the acting Defence chief's opening statement, so I may re-examine some of the points you have already made. Before I go to that, Minister, have you, at this stage got a definition of 'sovereign capability'? Is it the intention of your office to have a definition, in the same way as the UK has a definition?

Senator Payne: I think there are a number of members of the organisation who could contribute to that answer. We are obviously focused on ensuring that Australia is able to design, where appropriate, but to construct, build, sustain and maintain the vessels that form part of the naval shipbuilding plan to give Australia its sovereign capabilities to do those, to operate them, to maintain them and to sustain them. The naval shipbuilding plan, which is of course the responsibility of the Minister for Defence Industry, goes to that. It will go further into further development as more work is done in that area.

Senator GALLACHER: You'd be familiar, though, with the UK statement which goes to 'where the technology is created, where the skills and intellectual property reside, where the jobs are created and sustained and where the investment is made'?

Senator Payne: And they are all factors of that, yes.

Senator GALLACHER: Thank you. Acting Chief of Defence, just to go to current operations, have we seen any changes in the disposition or tactics of ISIS following the loss of control of Mosul and Raqqa?

Vice Adm. Griggs : I think what we've seen is effectively a collapse of Daesh in Iraq. The clearance of west Mosul was much quicker than people anticipated. The subsequent operation to the west and north-west at Tal Afar was even quicker. The clearance of the Hawija pocket, which is to the north, north-east of Baghdad was very quick as well. I think what we are seeing is Daesh in Iraq in full-scale retreat. Really the remaining pockets are up at the north-western end of the Euphrates River valley in Iraq and then into the Euphrates River valley in Syria. That's largely what is left of Daesh and Iraq and Syria.

Senator GALLACHER: What are the implications for Australia's role, given what you have just reported? Is there a change in our role? Are we going to see less effort or more effort?

Vice Adm. Griggs : Well, the effort continues in accordance with the government's mandate for our support of the government of Iraq. As I made clear, the fight isn't done by any stretch. But it is certainly on a very positive trajectory. There is a significant need to continue to bolster the capabilities of the local security forces, as we're doing in Afghanistan.

Senator GALLACHER: Since we've last had a report, there has been a change in the threat posed to ADF or coalition forces? Is it less?

Vice Adm. Griggs : No, the threat remains pretty much the same.

Senator GALLACHER: How many F/A-18 have we got deployed at the moment?

Vice Adm. Griggs : My understanding is we have six in theatre at the moment.

Senator GALLACHER: Do we have a figure on the number of sorties that they've flown in Iraqi and Syrian airspace?

Vice Adm. Griggs : Over what period, Senator?

Senator GALLACHER: Since we last spoke.

Vice Adm. Griggs : I will get you that on notice.

Senator GALLACHER: Just an update on whatever we reported—I suppose, the overall question is: has the rate of effort changed? Has the tempo increased? Or is it the same?

Vice Adm. Griggs : In broad terms, the rate of effort is the same. Obviously, with the successful conclusion of both west Mosul and Tal Afar, the number of strikes where we're releasing our weapons is taking a bit of a dip because there's, basically, a lull in activity before moving up the Euphrates River valley.

Senator GALLACHER: So daily or weekly missions would be reducing?

Vice Adm. Griggs : We're still flying the missions—and broadly the same sorts of rates of effort, as required by the coalition air task order.

Senator GALLACHER: What about the discharging of weapons or firing them?

Vice Adm. Griggs : As I said, at the moment there is probably a bit of a lull in comparison to what was happening during the Mosul and Tal Afar operations.

Senator GALLACHER: Do we have the figures? Is it 20 a week or five a week—

Senator Payne: We'll get the figures for you.

Vice Adm. Griggs : We will get them for you.

Senator GALLACHER: Have any of the RAAF assets been fired upon since last estimates?

Vice Adm. Griggs : Not that I'm aware of.

Senator GALLACHER: I'm sure I speak for all committee members, when I say we note the sensitivity of this issue and acknowledge that Iraq and Syria are highly complex operating environments and our personnel are working under incredibly difficult conditions. But is there any update on the report that the shadow minister received on 4 October, where the ADF personnel were involved in an operation that appears to have resulted in civilian deaths?

Vice Adm. Griggs : There's no update to that, no.

Senator GALLACHER: So there's been some media commentary on that, on 30 September 2017.

Vice Adm. Griggs : That's right.

Senator GALLACHER: Are you aware of that? You have nothing to advise?

Vice Adm. Griggs : That was our—basically, the release of information.

Senator GALLACHER: Let's move to the Philippines. On 23 June, Minister, I think you announced that the government of the Philippines had accepted an offer of two Defence Force AP3C Orion aircraft to provide surveillance support to the armed forces of the Philippines. Now that the siege of Marawi is over, what is the situation there? Do they still require those aircraft?

Senator Payne: They will be gradually withdrawn.

Senator GALLACHER: They will be withdrawn?

Senator Payne: Gradually, yes.

Senator Payne: One starting this week and the other, I think, later this week.

Senator GALLACHER: How many personnel do we have involved in providing additional support in the Philippines?

Senator Payne: In relation to the P3s or more broadly?

Senator GALLACHER: More broadly.

Senator Payne: I announced yesterday, Senator, that there would be approximately 80 members of the ADF engaged in a range of areas in support of the armed forces in the Philippines post the Marawi crisis. Those 80 members will comprise members of mobile training teams, who will be providing training in urban combat warfare aspects, in command and control aspects to members of the AFP, both the army and the marines particularly. All of that training will be taking place on Defence bases in the Philippines. It is focused small-team training. It includes a train-the-trainer component, so it is obviously instilling and building into and with the armed forces of the Philippines a capacity to retain those skills and to replicate them themselves over time.

This recognises that the armed forces of the Philippines have historically had significant experience, for example, in aspects of jungle and less-urban warfare, if I might put it like that. That is where their experience has been. Marawi has identified a new challenge in that regard. We have, as VCDF, acting CDF, has said, we have spent some time now training over 25,000 members of the Iraqi Security Forces recently in what has been a very urban-focused conflict environment, combat environment. So the Philippines government and the Australian government have agreed that there is some mutual benefit in sharing those skills, and that will commence as of today.

Senator GALLACHER: You mentioned they won't be based on a permanent location; they will serve at multiple bases?

Senator Payne: That is right.

Senator GALLACHER: Is there a time limit?

Senator Payne: We're starting that process literally today. I expect that this will continue over many months, both the work in the training I referred to, our maritime engagement, our relationship with the Philippines Air Force, which is then subject to review by both governments.

Senator GALLACHER: And are these experienced personnel, who have gained experience in Iraq or other areas?

Senator Payne: A range of personnel, to be selected appropriately by the ADF. I've met with members of the planning teams that were pre-deployed to the Philippines to have discussions with the AFP and have found them to be very impressive Australians, as you might expect, and very keen to engage with our regional colleagues.

Senator GALLACHER: Thank you, Minister. If we could move to—

Vice Adm. Griggs : Senator, I have those figures.

Senator GALLACHER: Okay.

Vice Adm. Griggs : So since last estimates we've flown 87 E7 airborne early morning missions, 83 tanker missions, KC30 missions, 276 fighter missions, resulting in 418 weapons being released and about 9,937,648 pounds of fuel being offloaded.

Senator GALLACHER: And the 236 fighter missions, that's comparable with the previous reported estimates?

Vice Adm. Griggs : Broadly. 276, yes.

Senator GALLACHER: So, down a bit, but not hugely.

Vice Adm. Griggs : Well, the lull's been more in the last month or so since the end of the Tal Afar operation.

Senator GALLACHER: Thank you. If we were to go to a very sensitive area—we've seen that there have been, very tragically, three ADF fatalities on Australian soil in quick succession. I'd like to extend my condolences to Defence and the families, friends and comrades of those personnel. It must have been very difficult for all concerned. Any workplace death or serious injury obviously affects morale and the people around it. Do you want to give us an update on how you've dealt with those issues in Defence?

Vice Adm. Griggs : They're obviously dealt with in a variety of ways and at different levels. Perhaps the Chief of Army is best to make some more detailed comment, but at the unit level I think there's been very good support for the families involved and of course the workmates of those who were killed. We're also undertaking a range of inquiries and investigations into causal factors behind these accidents. So it's been addressed at a number of levels.

Senator LAMBIE: So you have the ADF members over there that you said that you were going to start withdrawing.

Senator Payne: No; we have the P3s which have been flying since 22 June in relation to the Marawi area itself. They are being withdrawn because of the conclusion of the events there. Yesterday, with Secretary Delfin Lorenzana, the Philippines Secretary for National Defense, I announced the commencement of arrangements between the government and the armed forces of the Philippines and Australia and the ADF to begin training with members of the members of the armed forces of the Philippines across a number of areas, but including counter-terrorism training in urban warfare, for example, with mobile training teams that will start working from today.

Senator LAMBIE: So you've got the training teams. What's the structure? How long will they be in there? When are you going to withdraw them from the Philippines? Do you actually have, I guess, instruction at the moment? Do you have any idea on time lines for these people, or are you just playing it day by day?

Senator Payne: In response to Senator Gallagher—and I'm very happy for the officials to add to this—I indicated that there is an agreement between the Australian government and the Philippines government for the commencement of the training. It is a process which will take some time, obviously, to work with the army and the marines in terms of the urban combat training and with the navy in terms of maritime. As I indicated yesterday, we will be doing a number of ship visits to the Philippines, which will involve cooperative activities to help build capacity there as well. That will start next month with patrol boat visits. So it is a series of activities over a period of time which is subject to review by both governments.

Later this year, we will also be co-hosting a multiagency civil military and law enforcement seminar on post-conflict rehabilitation efforts. That is going to be very important for what has happened in Marawi. This is a city that has been subject to significant devastation, and it will be very difficult for the relocation of those displaced people as they come back to that community. Australia has skills, acquired over a number of natural disasters, particularly in our region and over many years, that we're able to contribute to that. Of course, you'd be familiar with the sorts of experience we can bring to those discussions.

Senator LAMBIE: I have one more question. It's more about the personnel that will be involved in that. I'm assuming that they are probably going to be part of some sort of training team and they would have been in the Middle East. I don't need their names, but what I would like is if it's soldier A or if it's Air Force A. So I don't need the names; I just want to know what groups they're coming from, whether they're soldiers, sailors or airmen and how many tours they've done during their lifetime and how long they been in the armed forces. Do you think you can provide that to me, please?

Senator Payne: We'll have a look at that on notice.

Senator LAMBIE: Thank you

Senator KIM CARR: Can I go back to my—

CHAIR: Will we wait until Mr Gillis is back with some information? He doesn't seem to be in the room.

Senator KIM CARR: There are some matters that follow through from the answers I have been given already.

Senator GALLACHER: What if we just get through these Army training incidents, because we've started that? It's a very sensitive issue and it will give people time to—

Senator KIM CARR: Sure.

Senator GALLACHER: So we're seeking an update on what steps you're taking, Lieutenant General Campbell, and then we have a couple of questions about inquests and things like that.

Lt Gen. Campbell : Yes, we have had a couple of training deaths this year and also I note a young Singaporean NCO died at Shoalwater Bay this year. Beyond the points raised by the vice chief with regard to support to the family and to the mates of our soldiers in their units, we initially suspended training in particular aspects of military training activities and conducted a training pause, to refresh everybody on what was expected of the standards, the safety and the requirements immediately. Also, we conducted a training review of our systems of preparing people for the conduct of different training serials across the Army. We have suspended live fire training that is conducted in temporary urban range facilities and we are—and have been for some time—progressively requalifying and training to enhance the skills of some of our supervisory level NCOs and officers across the force in relevant areas. Meanwhile, in parallel to that activity within the organisation, there is a Comcare inquiry relevant to the deaths, a coronial inquiry and also an ADF inquiry. In parallel—with regard to the loss of our Singaporean comrade—we facilitated and supported the Singaporean repatriation of the deceased's remains to Singapore and gave every assistance to their investigation team.

These inquiry activities are ongoing; they're fully supported by the Army and the wider ADF. We want to be as thorough and completely open as possible for both Comcare, the coronial investigation, and our own internal work. I'm obviously very, keen that these become isolated instances which are understood, which our training systems mitigate to prevent occurring again and from which we're all learning.

Senator GALLACHER: Are you able to give any update as to the inquest into Private Challis's death?

Lt Gen. Campbell : It's ongoing.

Senator GALLACHER: And we had a Lieutenant Commander Steven Noakes; is there any further information about that?

Lt Gen. Campbell : I can't speak to Lieutenant Commander Steven Noakes.

Vice Adm. Griggs : It was natural causes.

Senator GALLACHER: Trooper Stuart Reddan—I understand that's being investigated by the Queensland Police? Is that correct?

Lt Gen. Campbell : That's correct—and also our own internal reviews. A very unfortunate circumstance which was a shock to all.

Senator GALLACHER: Thank you very much for that.

Senator HANSON: I'd like to go to the Shortfin Barracuda subs. We've signed a contract—

Senator Payne: Could you wait until the officers come to the table, please?

Senator HANSON: Yes.

CHAIR: While we're waiting, Mr Gillis, do you have an update for Senator Carr?

Mr Gillis : The administrators are just doing that now. They intend to give it to me at the break, which is about 15 minutes away.

CHAIR: Thank you. Senator Hanson.

Senator HANSON: I have a question about the Shortfin Barracuda subs. Just to get it on the record, is it correct that the cost of the contract is $50 billion?

Rear Adm. Sammut : The cost of the program is $50 billion in acquisition. That is not the cost of the contract per se; that is the costs that will be required to establish the submarine capability in full, which extends to not only the acquisition of the submarines but the establishment of the facilities necessary to operate the submarine; the establishment of a shipyard to be able to build those submarines; wharfs; training centres; test and integration facilities for the combat system; the acquisition of the combat system; and the establishment of a sovereign capability in Australia as well.

Senator HANSON: Is that for a total of 12 submarines?

Rear Adm. Sammut : That's for the submarine capability, which comprises, as part of that, 12 submarines.

Senator HANSON: When was the contract signed?

Rear Adm. Sammut : There will be several contracts signed for the delivery of the Future Submarine. The first contract was signed in September last year. That was known as the design and mobilisation contract, under which we have commenced design activities and activities in terms of mobilising both Naval Group and Lockheed Martin, along with the Commonwealth, to commence that design process, which will continue over the next several years. By way of example, we have commenced the design of the submarine itself. We've also established a resident project office in Cherbourg. We have commenced basing our people in France. We've started the development of our engineering plans, the establishment of an integrated master schedule and so on.

Senator HANSON: At what time prior to that did you do investigations around other submarines—how many months prior to signing that contract? How much time and effort did the Defence Force put into looking at other subs that were available prior to the Shortfin Barracuda?

Rear Adm. Sammut : We commenced the competitive evaluation process in 2015 and work on other options had been proceeding from about 2011. So there was about four years of work looking at various options that included military off the shelf, modified military off the shelf, and evolved Collins.

Senator HANSON: With regard to the Shortfin Barracuda, you have signed a contract with Naval Group, which is a French firm. Did you specifically go looking for a diesel submarine? Or what were you looking for?

Rear Adm. Sammut : The competitive evaluation process was for a conventionally powered submarine, a diesel-electric submarine, not any other form of submarine.

Senator HANSON: Was it based on a pump jet sub?

Rear Adm. Sammut : What we were looking for was based on the best solution that the three international participants within the competitive evaluation process could offer to meet Australia's capability requirements. We did not specify to any of the participants the form of solution it should take, the form of the submarine. It was up to those international participants to present their design and, more importantly, their design capabilities to meet Australia's capability requirements for its Future Submarine.

Senator HANSON: You didn't want a nuclear sub, that was completely out of the equation?

Rear Adm. Sammut : That's correct, a nuclear submarine was not in consideration. The government policy was that we were to acquire conventionally powered submarines, the Future Submarine.

Senator HANSON: So you were looking at either a pump jet or a diesel?

Rear Adm. Sammut : I think you're confusing, Senator, a pump jet as being a nuclear-powered submarine, versus what is in fact a conventionally powered submarine. A pump jet is a form of propulsion. It's not a form of power for the submarine. It is a form of propulsion that fits to the back of the submarine and, rather than taking the form of a conventional propeller, it takes the form of a shrouded rotor with a set of stators in there that, in operation, creates thrust through the water.

Senator HANSON: All right. How are the Shortfin Barracuda run—on what?

Rear Adm. Sammut : I think the point that we're trying to make here is that the proposal offered by France included a pump jet.

Senator HANSON: So it is pump jet? So you're going pump jet?

Rear Adm. Sammut : The proposal—

Senator HANSON: This is why you've chosen them as the design—to go with the pump jet. So it's not propellers, is it?

Rear Adm. Sammut : The proposal offered by France included a pump jet, and that's the proposal that we've accepted. A pump jet remains on offer, and that's what we intend to use for the Future Submarine.

Senator HANSON: And that's why you chose France's Naval Group to—

Rear Adm. Sammut : No, that is not, alone, why we chose France. There are a number of things. I am on record as providing testimony at the Senate of the number of things we considered in the selection of Naval Group as our international partner. There were a range of factors, and they were all over the capability of the international partner to deliver a regionally superior submarine and one which Australia would have the sovereign capacity to operate and sustain throughout its life. There were a number of criteria in mind.

We looked at the capabilities. That includes the platform capabilities. We looked at the ability of the international partners to work with the combat system integrator of our choice. Those things in particular pertain to the capability of the boat. We looked at rough order of magnitude costs and schedules to ensure the participants understood the scale of the program that we were embarking upon and could give us insights into the manner in which they would manage costs and schedules throughout the program. We looked at matters concerning program management. We looked at the design and the way that safety is incorporated into the design. It's important that that was understood from the outset because, whilst the international partner would be designing the submarine, it would be the Commonwealth that would be responsible for certifying the submarine as safe and fit for operations, and we needed to make sure that the certifying process would match the design philosophy.

We looked at methods of sustainment. We looked at the manner in which each of the participants would support the establishment of a sovereign sustainment capability in Australia. Of course, that was a key lesson from the Collins program. Even though we built the submarines in Australia, it took us some time to establish the sovereign capacity to sustain those boats. Indeed, having done that now is the reason why we are able to deliver beyond international benchmark availability. We also looked into the way in which data would be transferred to Australia, the manner in which intellectual property would also be managed in the program. We looked at the ability of the participants to manage risks. Again, throughout this complex program, that would be a very important factor. I would say that we didn't just pick a submarine with a pump jet; we picked an international partner that could meet a range of requirements to achieve not only a regionally superior submarine but the sovereign capacity to operate and sustain that submarine and to deliver that within the time frame that would be necessary.

I'd like to point out that that process was peer reviewed and it was peer reviewed by an expert advisory panel. The expert advisory panel found that the process was sound and that the participants had been treated fairly. I might add that the expert advisory panel also met with each of the participants on several occasions to ensure that they were satisfied that the process was being run competently and soundly. I'd also say that the results of our work were peer reviewed by former program managers from the United States, who made no recommendations to change the course and the manner in which we were conducting the competitive evaluation process and indeed came to the conclusion that the manner in which it was being conducted would indeed lead to appropriate recommendations on the selection of an international partner.

Senator HANSON: That is correct: you did get advice from the United States, from US Navy secretary Don Winter, retired US Navy Vice Admiral Paul Sullivan and Rear Admiral Thomas Eccles. They were actually on this based on sound experience. But the fact is that America had not launched a diesel submarine for 55 years.

Rear Adm. Sammut : This was about a submarine program. These are people with a lot of experience in submarine design. Might I also add that we have a lot of experience in the operation of diesel-electric submarines ourselves. We understand many of the factors around battery technology. I'd just like to add—

Senator HANSON: Sorry, I have limited time with this. I just want to ask you—

Senator GALLACHER: Surely courtesy on both sides is required here.

CHAIR: Senator Hanson has the call.

Senator HANSON: I agree, but I need to ask these questions. I just have to say: you're actually going to put pump jets into a sub. Is it true that pump-jet submarines can stay underwater for only 20 minutes?

Rear Adm. Sammut : No, I do not know what you're referring to about pump-jet submarines remaining underwater for 20 minutes. Can I be clear again: a pump jet is a form of propeller. It has no bearing on how deep a submarine can go or how long it can stay underwater. They are matters that pertain to the platform design of the submarine.

Senator HANSON: What about a diesel sub? We are going diesel.

Rear Adm. Sammut : We are going to buy diesel-electric submarines, and I can assure you they are going to stay underwater for much longer than 20 minutes.

Senator HANSON: Three days? What's the period of time?

Rear Adm. Sammut : I am not going to reveal what our requirements are for submerged endurance. That is classified.

Senator HANSON: I don't think it's classified.

CHAIR: You don't get to make the call on what's classified and unclassified in this conversation.

Senator HANSON: So you can't disclose knowledge of how long a diesel sub can stay underwater compared to a nuclear sub?

Mr Johnson : A diesel-electric submarine can stay underwater depending on the way it's designed. That refers to matters about the size of the battery, the manner in which the hotel load, which is the power that is consumed by the submarine when it's operating, is used and so forth. There are a number of factors that go into the period of time that a diesel-electric submarine can remain submerged.

Senator HANSON: This Barracuda—there is still one on the slipways in France that hasn't even been tested. We're basing the design on that which has not been tested. Do you believe that is in our interest?

Rear Adm. Sammut : We have selected Naval Group as competent designers of diesel-electric submarines and indeed ocean-going submarines. We made that assessment on the basis of the competitive evaluation process, which, as I've endeavoured to explain, was a very thorough process. We have no reason to believe that France is not capable of designing a submarine to meet our requirements.

Senator HANSON: You don't believe we may be making the same mistakes as we did with the Collins class when that was first designed, which cost us billions of dollars?

Rear Adm. Sammut : No, I don't, because we've learned many lessons from the Collins program and implemented those as we've gone forward with the Future Submarine.

Senator HANSON: Is the Barracuda designed as a nuclear sub—that is, basically is a nuclear sub?

Rear Adm. Sammut : The French Barracuda, the submarine that they will be employing in their navy, is a nuclear powered submarine. The submarine that we're working on with Naval Group is a diesel-electric submarine.

Senator HANSON: But it is still the Shortfin Barracuda, which is a nuclear sub, so we're taking a nuclear sub and we're going to make it a diesel sub.

Rear Adm. Sammut : No, we are designing a submarine that will have a certain lineage in the work that France has done in designing both the Barracuda and conventional submarines. That's quite natural in any submarine design and build process. If you looked at any nation designing and building a submarine, they will always refer back to the lineage of designs they've done. What we have the benefit of doing here with France is leveraging the design work that they've done in the Barracuda and a number of conventional submarines that they've designed, built and delivered to other navies, and using that as the basis for the design of the Future Submarine, which I said, is a conventionally-powered submarine. You cannot convert a nuclear submarine to conventional power. That has often been stated in the media, and I understand most recently in the Insight Economics report. The effort is not to convert an existing boat into a diesel-electric submarine; we're designing a submarine using many of the learnings and references that come out of the Barracuda design. A good example there would be something like hull diameter. If you're going to change the diameter of the hull of a submarine, you're into a whole new set of calculations about the structural integrity and strength of the submarine. If we can utilise the work that France has already done in having a hull diameter that's very similar to Barracuda, we can leverage all of that design work, which has not only gone into the Barracuda but also has been tested by France in their methods of design and certification to get to this point.

Senator HANSON: Can I ask one more question?

CHAIR: Sorry, Senator Hanson. Minister Payne?

Senator Payne: I was going to say, if there's any material from which Senator Hanson is quoting and on which she would seek further clarification, we'd be very happy to have a look at that for her. In answer to Senator Carr's questions in relation to outstanding questions on notice, I've looked at a number of those, which relate to the inquiry into Australia's naval shipbuilding industry by the Senate Economics References Committee, I believe. The records that I've seen show me that there are six questions on notice outstanding: one from the June hearing and five from the September hearing. I advise you that we will have those cleared as soon as possible, and I apologise for the delay on those. Two of them are yet to be received from the department, and I will ask the secretary to give those priority. The June question on notice was first received in my office in September after it was received earlier by the office of the Minister for Defence Industry, but it required more information to provide complete answers to the questions. I received a revised draft back in my office last week, and that will be cleared as soon as possible.

Senator KIM CARR: That was one question. You've said there were a number of others. Two are yet to be received, so I presume there are four of the six. You've mentioned one other, so there are three. What's happening with the other three?

Senator Payne: In my remarks then I said, of the 5 September questions on notice, three arrived in my office only last week, and I will have those cleared as soon as possible.

Senator KIM CARR: And they are all in your office, not in Minister Pyne's office?

Senator Payne: Let me restate: there is one from the June hearing; there are five from the September hearing. Of the five from the September hearing, three came to my office last week. I will clear those as soon as possible. Two of those are yet to be received from the department. I will ask the secretary to make them a priority. The June question was first received in my office in September after it had been in the office of the Minister for Defence Industry prior to that.

Senator KIM CARR: How long was it in Minister Pyne's office?

Senator Payne: I understand it was received by their office in July, but more information was required to provide a complete answer to the questions in that QoN. I received a revised draft on that question back in my office last week, and that will be cleared as soon as possible.

Senator KIM CARR: We have yet another example of confusion in the government about who is responsible for what.

Senator Payne: I don't think there's any confusion. It's a matter of input into the drafting of answers. As I said to you, we'll provide these as soon as possible.

CHAIR: We now stand adjourned.

Senator KIM CARR: Are we adjourned or suspended?

CHAIR: We'll suspend instead of adjourning.

Proceedings suspended from 10:33 to 10 : 50

CHAIR: Senator, Hanson, you had a couple of final questions.

Senator HANSON: The one reason for selecting the Shortfin Barracuda was stated to be that it has a very quiet pump-jet propulsion system, as used on nuclear submarines. Engineering experts said at the time that pump-jets were inefficient for conventional submarines, but Naval Group said that propellers were now obsolete. Recently, however, Naval Group said that propellers may be used instead. Just two weeks ago Naval Group said that we may have to go back to propellers. So, are we going with pump-jet propulsion or are we going back to propellers?

Vice Adm. Griggs : The Commonwealth intends to incorporate a pump-jet into the Future Submarine, and the design is proceeding along on that basis.

Senator HANSON: When the choice of Naval Group was announced, the Minister for Defence Industry stated that all 12 submarines would be built in Australia. At the same time, then President Hollande announced the creation of 4,000 jobs in France, while his defence minister stated on French TV that the first two submarines would be built in France. Can the minister explain the discrepancy and assure the Senate that all submarines will be built in Australia.

Senator Payne: All the submarines will be built in Australia.

Senator KAKOSCHKE-MOORE: I want to spend some time this morning discussing the Director of Military Prosecutions annual report 2015-16.

Vice Adm. Griggs : Just before we start, I think it's important to re-emphasise that that is a statutory role. I will not speak for someone in a statutory role. They're outside the chain of command for a deliberate purpose.

Senator KAKOSCHKE-MOORE: Yes, of course. I should have said that I would just like to get some feedback from you about some of the contents of the report. At page 24 of the report it states:

… The majority of offences dealt with under the DFDA—

the Defence Force Discipline Act—

are acts of indecency. The more serious offences are generally dealt with by the civilian authorities …

When is a decision made regarding what is a serious offence, and what is used to determine whether a matter should be dealt with by civilian authorities?

Vice Adm. Griggs : What we tend to do now—and we've traversed this ground in previous estimates and in Senate inquiries—is that we will refer most matters immediately to the civil police at a very early stage. There will be discussions between the civil police and the ADF Investigative Service, and it will either be taken on by the civil police or passed back to the ADF Investigative Service if it is not considered to be a serious matter.

Senator KAKOSCHKE-MOORE: I want to go to some of the language or the description of offences that have been used in the report, in particular on page 4. The report highlights:

12. There was also an increase in the number of prosecutions for low‐level sexual misconduct perpetrated by males on subordinate female members of the Defence Force. Such offences alleged sexual misconduct by male senior NCOs or officers, ranging from squeezing breasts, squeezing or grabbing buttocks, touching female genitalia, threatening failure if there was a refusal to engage in a sexual relationship, inappropriate or suggestive messages using the Lync instant messaging system, filming a naked female showering, and viewing a naked female showering by peering under the adjoining partition between the showers.

I just want to get confirmation that those types of acts are considered 'low-level sexual misconduct'?

Vice Adm. Griggs : They're all unacceptable. I think that's the most important thing. The language that the Director of Military Prosecutions has used is the Director of Military Prosecutions's, not ours. Again, I'm not going to speak for the use of that characterisation. I think what's more important, from our point of view, from a command perspective, is that those sorts of incidents are unacceptable and not tolerated.

Senator KAKOSCHKE-MOORE: I want to turn now to another section of the report, which is in relation to reporting of convictions. This is on page 31—and, again, just for ease, I will read out the short paragraph.

Vice Adm. Griggs : Yes, please do; I don't have it in front of me.

Senator KAKOSCHKE-MOORE: The director wrote:

124. Matters resulting in a conviction are reported in Service newspapers. However, due to what I regard as a wholly unnecessary and overly cautious approach, the reports are obscured so as to de‐identify the convicted member to such a degree that they seldom convey anything resembling the circumstances behind the conviction. …

125. In my view this is a missed opportunity to reinforce the message that Defence reforms, such as Pathway to Change, are gaining traction and not only denounce such conduct but encourage others who, in similar circumstances, may be reluctant to make a complaint. …

What's your response to the director's remarks there—that she thinks some of the reporting restrictions around convictions are actually hampering other efforts such as Pathway to Change.

Vice Adm. Griggs : I think most of the senior leadership of the ADF would have sympathy with the Director of Military Prosecutions's view. There is this thing called the Privacy Act, though. The Director of Military Prosecutions doesn't publish the service newspapers; we do—and we are subject to the Privacy Act. This has been a long and tortuous debate inside the ADF for a number of years. It has certainly not just been going on in the last 12 months; it's been going on for years, in terms of: have we got the balance right between publicising the consequences of unacceptable and disciplinary behaviour through publishing the outcome of results versus the protection of people's privacy in accordance with the law.

Senator KAKOSCHKE-MOORE: There's another sentence from this same section, where the director states:

This is patently at odds with the open nature of Superior Service tribunals … and the fact that civilian newspapers, in the absence of a specific non‐publication order by the tribunal, openly print names and the details of the circumstances when they cover military trials.

Vice Adm. Griggs : Yes—and, in that domain, that applies. But, in terms of publishing in a service newspaper for cases that are not in that domain, I think our view is that we've got the balance right. Maybe we are a little cautious, but we are trying to stay within the Privacy Act. As you know, there is a whole bunch of other issues around the Privacy Act, about mental health and all those sort of things, where we really have to strike a very delicate balance. None of us want to downplay the consequences of unacceptable behaviour or disciplinary actions, and that's why we moved a few years ago to start publishing the outcomes again. There was a long period where they were not published, so we actually took the step to republish this for the very purpose of reminding people that the justice system is working and that these are the sorts of outcomes you can expect.

Senator KAKOSCHKE-MOORE: Just to confirm my understanding of your response, would it be fair to say that you've taken on board the director's comments, but at this stage there are no changes planned in the way that decisions are published?

Vice Adm. Griggs : We do take on board the annual report. Me have a military justice coordination committee which looks at the broader running of the military justice system, and that considers things like the report from the director.

Senator KAKOSCHKE-MOORE: Thank you. I want to go now to another issue that the director raised, and that's in relation to investigative provisions within the DFDA. Again, just for ease of reference I'll read the few sentences that I'm referring to. She says:

For many years, it has been apparent to the personnel administering disciplinary arrangements in the ADF that the investigative provisions of the DFDA are in urgent need of review in order to equip ADF investigators appropriately to respond to the challenges of twenty first century offending. Regrettably, however, there have been no significant changes made to these provisions since the enactment of the DFDA in 1982. The investigative provisions of the DFDA were lifted from the Criminal Investigation Bill 1977, and based on the Australian Law Reform Commission Report 2—Criminal Investigation—published in November 1975. Consequently, the investigative provisions of the DFDA are over 40 years old.

Page 50 of the report urges an immediate review of the investigative provisions of the DFDA. Has this review begun?

Vice Adm. Griggs : Yes, it has.

Senator KAKOSCHKE-MOORE: When do you anticipate it will be finished?

Vice Adm. Griggs : I will have to get that on notice, but it has begun. The military justice coordination committee is looking at a range of issues. We are actually doing a significant review of the military justice system and how we can streamline it and improve it.

Senator KAKOSCHKE-MOORE: When did that review begin?

Vice Adm. Griggs : I will get you that on notice, Senator.

Senator KAKOSCHKE-MOORE: I know you can't anticipate the findings of the review, but in terms of the nature of the report, will it contain recommendations as to potential amendments to the DFDA?

Vice Adm. Griggs : That's what's envisaged. I think the director is absolutely spot on in those observations.

Senator KAKOSCHKE-MOORE: Another issue that was raised in the report was power imbalances, particularly as the director has seen an increase in the number of female subordinates coming forward with complaints against those who were in charge of them. One comment the director makes is:

As sexual offences are often difficult to investigate, the perceived credibility of the complainant is important.

Can you tell me how perceived credibility is assessed?

Vice Adm. Griggs : I think the issue for us has been that what we've been trying to do is make sure that people feel comfortable in coming forward and that they don't have adverse opinions held of them because they do. One of the reasons that we established the SeMPRO, which I know you're familiar with, and the whole victim-centric approach to sexual offences was to encourage them to come forward in a safe environment where they could make up their own mind whether they wanted to take a matter forward and they could be properly supported in that decision-making process rather than being thrown straight into an investigative process, which is often seen as adversarial and difficult for the victim. I think there are a number of elements to this that we've put in place to try and take away the stigma of people coming forward. I think there are two ways you can look at those numbers. You can look at it as an increase in activity or you can actually look at it, as I do, as an increase in confidence amongst our more junior female members that they will be supported and that action will be taken.

Senator KAKOSCHKE-MOORE: Do you have a sense that the increase in reporting is just that—that the base level of abuse that's occurring hasn't changed; it's just that more people are coming forward? Or do you have a sense that abuse is in fact on the rise?

Vice Adm. Griggs : I don't think you can definitively answer that, Senator. I'd love to be able to do that, but I don't think anyone can answer that question. I think there are elements of both. But I do believe very strongly that our more junior personnel are much more confident to come forward. If you look at some of our survey results, they believe very strongly that, when they raise an incident like that, it will be taken seriously and actioned.

Senator Payne: I regard this as an ongoing challenge; it is in any workplace, but particularly in a military one. It is something, as Acting CDF has said, on which we have made significant progress, but I think we would all agree that there is more work to do and we continue to be very focused on that.

Senator KAKOSCHKE-MOORE: I should have made it a little more clear, but my concern—and I know, Vice Admiral, that you can't speak to the language the director uses—is around fact that whether or not a prosecution proceeds could depend on the perceived credibility of the complainant. I find it quite troubling in the sense that if a complainant is a new recruit, perhaps not very well known amongst her peers, and is making a complaint against somebody who has been around for a much longer period of time and is well known, that it could be another barrier to a complainant coming forward.

Vice Admiral, you briefly mentioned SeMPRO and I know we've had discussions around SeMPRO in the past. One of the things I've been trying to determine is just how effective SeMPRO is in being a trusted place to go to where people have concerns or allegations around abuse. What I would like to get a better sense of, and I'd be grateful for your feedback, is whether you've considered conducting an anonymous survey. It's hard for us to know who hasn't approached SeMPRO when they could have. But if you do an anonymous survey, that way you might capture some people who could've contacted SeMPRO but decided not to. Is an anonymous survey or another one something you considered?

Vice Adm. Griggs : I'm not sure if we included a survey.

Ms Kelley : We run a number of surveys, as you're aware. We run the YourSay survey once a year for 100 per cent of the workforce. We also run the unacceptable behaviour survey which, again, once and it goes to 50 per cent of the workforce. But I don't know we've considered whether an anonymous survey of SeMPRO is required in addition to the information through the unacceptable behaviour survey. That is probably something we will need to consider as to whether that's required.

Senator KAKOSCHKE-MOORE: The unacceptable behaviour survey, could that be amended to include a question of, are you aware of SeMPRO; have you contacted SeMPRO?

Vice Adm. Griggs : We could do that.

Senator KAKOSCHKE-MOORE: Just finally, changing tracks completely, the transition taskforce that the government has established is aiming to identify barriers to successful transition from the ADF, but my office has heard complaints from veterans who have evidence that multiple-year tertiary education courses are not seen to be necessary to the successful transition of the veteran and they are only being approved for low-level vocational short courses. Will the department be ensuring that, through the transition process, veterans and current Defence personnel are supported to achieve the same or similar career outcomes that they would have achieved had they stayed in Defence?

Vice Adm. Griggs : There are a number of educational schemes available while serving and there are a number of short courses related to transition, but there is no scheme for a multiple-year tertiary education as part of the transition process. It sounds almost like a GI scheme.

Senator KAKOSCHKE-MOORE: What is a GI?

Vice Adm. Griggs : In the US, after the Second World War people were paid to go to college after they left the military. We don't have that scale. Maybe Brigadier Fox could say something.

Brig. Fox : Under the transition work we have a program called the Career Transition Assistance Scheme. It's available for our members transitioning out of the Defence Force. It provides access to vocational education and training to support employment prospects post transition, and it's around $5,000 that members have access to. People undertake courses such as a cert III in frontline management, fitness, small business management and property services or a cert IV in accounting and human resources. It's about preparing people to leave the Defence Force to undertake employment.

Senator KAKOSCHKE-MOORE: But not necessarily—

Brig. Fox : It is not necessarily a university education. It's more vocationally focused.

Senator KAKOSCHKE-MOORE: I may need to come back to you on this if there is time later today, but I thought there was a policy that said accessing tertiary education could include university education and not just vocational education and training. If there is time today, I'll come back with the wording from the policy that I'm thinking of.

Vice Adm. Griggs : We'll have a look as well.

Senator KAKOSCHKE-MOORE: Thanks.

Senator Payne: If you wanted to raise that matter further with me, we could certainly discuss that and look at some of the examples or concerns that may have been raised with you.

Senator KAKOSCHKE-MOORE: I would appreciate that, thank you.

Senator KIM CARR: Minister, on the questions on notice I raised with you, are you able to assure me that they do not require any further consultation with Minister Pyne's office?

Senator Payne: To the best of my knowledge, they do not.

Senator KIM CARR: Following up on the question I asked before with regard to QN 119 on the Naval Shipbuilding Advisory Board, are there officers here who can help me with that?

Senator Payne: I will ask Mr Ablong to come back to the table.

Senator KIM CARR: I have a contract note here, 3405124, for an amount of around $600,000. What's it for?

Mr Ablong : I'm not familiar with the contract note you have. In terms of your previous question about the meetings of the Naval Shipbuilding Advisory Board, during the course of 2017 to date they met in January. They visited Canberra and Adelaide. They met in Canberra in March. They met in Washington DC in early April. They met in Perth, Adelaide and Canberra in mid-April. They visited Canberra, Melbourne and Adelaide in June. They visited Canberra again at the back end of August, and they visited Canberra in the middle of October. They've also held four virtual meetings via teleconference in January, May, August and September so far. They're meeting regularly.

Senator KIM CARR: I'm wondering why the board needs its own version of what appears to be a support service. Why does it need a consultant as a support service?

Mr Ablong : The board don't have any consultants of their own. As I said, I'll need to get some details on the actual contract note that you're referring to. The cost for the board for financial year 2016-17 for visas and other administration activities associated with them coming to Australia was around $7,000, travel and associated costs was $694,000 and the cost of their contract work was $995,000.

Senator KIM CARR: This particular contract appears to have gone to the firm Finlay Consulting.

Mr Ablong : The board members are paid through companies that they either own or are associated with. Finlay Associates is the company that Ron Finlay uses as his business address. We pay that company for his services.

Senator KIM CARR: I see.

Mr Ablong : Similarly, there's a company called Burdeshaw in the US that we pay for the services of Professor Winter and a couple of other members. They have contracts with companies that arrange for their in-country administration and the like. It's just their contracting vehicle.

Senator KIM CARR: Is it usual for the Defence department to provide remuneration through a company like that?

Mr Ablong : We do that on a number of occasions. It depends on how they're set up. If you're a personal contractor you will have a company that you are running, so you have an ABN number and you pay tax through that company. We will pay individual contractors through their company, it would be Marc Ablong Proprietary Ltd, if I had a company, which I don't, and the Commonwealth would pay me through that company.

Senator KIM CARR: Mr Finlay gets $664,760. What's that for?

Mr Ablong : In terms of the contract with Mr Finlay, some of that would be his time on the Naval Shipbuilding Advisory Board and his services to that board. He is involved in a couple of independent insurance activities for the Capability Acquisition and Sustainment Group, and that would cover those activities as well.

Senator KIM CARR: He was on the evaluation—

Mr Ablong : Correct.

Senator KIM CARR: So this is a limited tender to secure this money.

Mr Ablong : Yes.

Senator KIM CARR: And he's paid through this mechanism.

Mr Ablong : Yes.

Senator KIM CARR: And you're saying that this is common?

Mr Ablong : Yes. We don't tend to pay individuals into their personal bank accounts. We pay it through company arrangements so we can apply GST and so they can manage their finances. It's a fairly standard arrangement.

Senator KIM CARR: How many other members of the board receive payments in that way?

Mr Ablong : All of them would, I believe.

Senator KIM CARR: All of them receive money through their private companies?

Mr Ablong : Through a company arrangement. Some of them are not private companies. Some of them are part of larger companies where they're involved in a consultancy activity in another environment. Some of them, individual companies.

Senator KIM CARR: I see. Can we get a breakdown of the payments made to each member of the board?

Mr Ablong : Sure, we can do that.

Senator KIM CARR: I see here one of them received a payment of $1½ million?

Mr Ablong : The total of that would not be for Naval Shipbuilding Advisory Board activities. It may be for other activities they're involved in with Defence.

Senator KIM CARR: I'd like a statement for the payments made to each member of the advisory board and the purposes for which those payments have been made. Since this board was only established last year, it seems to me an extraordinary amount of money they're being paid.

Mr Ablong : Some of the members of the board have been involved in other Department of Defence activities. As you'd know, Professor Winter was involved in the White-Winter review of the AWD program and has conducted a number of other activities from the over time.

Senator KIM CARR: These have been post-dated?

Mr Ablong : The reporting would have been for the value of the contract to that company, rather than their activities.

Senator KIM CARR: That will be all clear to me in the table that you'll produce.

Mr Ablong : We will.

Senator KIM CARR: The only other matter I will raise, because I have to go to something else, is that there's an industrial dispute of Broadspectrum. Is there anyone here who can assist me with that?

Senator Payne: We will check.

Vice Adm. Griggs : Do you have some context?

Senator KIM CARR: The context is that there is an EB dispute with the land material workforce which expired 30 of 2016. Have we got someone here that can assist me with that matter? No-one here?

Senator Payne: Why don't you ask your questions, and if Mr Gillis—

Senator KIM CARR: Is it true that Broadspectrum has asked for additional money having dismissed a whole lot of tradesmen that were working for them.

Mr Gillis : Do you have a contract?

Senator KIM CARR: Broadspectrum, formerly Transfield, who worked on the land materiel maintenance contract—and I understand they have done that since 2013—is a company that maintains equipment for the army, including armoured personnel vehicles, transport vehicles, night-vision goggles, electronic equipment, firefighting equipment and engineering equipment. Air Vice Marshal McDonald, are you able to help me with this?

Air Vice Marshal McDonald : Yes, I am aware of the issues associated with Broadspectrum.

Senator KIM CARR: Yes. Is it true that there is an industrial dispute involving an EBA with the land materiel workforce?

Air Vice Marshal McDonald : Our involvement is not in the industrial dispute. We're in contract with Broadspectrum.

Senator KIM CARR: Sorry; I don't mean that the defence department is involved in an industrial dispute. I'm asking, is there a dispute involving this contract?

Air Vice Marshal McDonald : I'm not aware of a direct dispute, but I'm aware there have been discussions due to the redundancies associated with Broadspectrum.

Senator KIM CARR: Yes, and that's the issue. There's been a series of redundancies, and it's put to me that there have been four EBAs presented and rejected by the workforce, and a number of redundancies where the company has dismissed highly skilled workers and then had to retrain people—but it has asked the defence department for additional money for the retraining of people that it had actually dismissed! Is there any truth to that proposition?

Air Vice Marshal McDonald : On that last aspect, I don't know but I can get back to you, Senator; I'll take that on notice.

Senator KIM CARR: Thank you. I'd like to know particularly whether it was the vehicle mechanics that they dismissed who had to be retrained as a result of the industrial dispute. And, if so, has the defence department paid additional money to Broadspectrum?

Air Vice Marshal McDonald : We will find that out for you, Senator, and get back to you.

Senator KIM CARR: Thank you very much. Do you know how many were made redundant?

Air Vice Marshal McDonald : I'm aware that between 19 and 26 July, 15 Broadspectrum tradespersons and trades assistants were made redundant.

Senator KIM CARR: And how many of those were vehicle mechanics?

Air Vice Marshal McDonald : I cannot answer that at the moment, Senator, but I will get back to you.

Senator KIM CARR: Thank you. Is it the case that one of them was actually the diesel mechanic—I won't name the individual, but is this at Bandiana in Victoria?

Air Vice Marshal McDonald : That is correct, and it is an issue for Broadspectrum, not Defence, Senator.

Senator KIM CARR: I see. Will you perhaps provide us with a briefing on that matter if necessary, by way of answer?

Air Vice Marshal McDonald : Certainly.

Senator KITCHING: I want to thank you firstly, Vice Admiral Griggs, for your opening statement and a hard copy of that. I want to go back to two parts of that while it's still somewhat fresh in our minds; particularly, to the commitments in the Middle East and in our regional area, and also in relation to South-East Asian nations. I'm not asking about operational matters, and I don't want to do that. What's the contingency planning Defence is undertaking for the possibility that this or a future government will decide that Australian forces will be required to remain in the Middle East area of operations for some time?

Vice Adm . Griggs : We work on the government mandate that we have, which is generally for a specified period of time before it is revisited by the National Security Committee of cabinet. We don't, particularly, make contingency plans for permanent ongoing presence.

Senator KITCHING: The reason I'm asking is that there is some thought being given to the idea that we may not want to leave vacuums in areas in the Middle East, and that, perhaps, the coalition forces that are there currently may need to commit for a longer period of time—I think Mr Moriarty's predecessor would say: 'We might wrap this up in 12 months, maybe two years.' But, after that, I'm really asking what would we consider committing in that area? Has thought been given to that?

Vice Adm. Griggs : Obviously it's a matter for government to decide what commitments government wants to make, but I would note that we have been effectively continuously present in the Middle East in one shape or form since 1990 and the invasion of Kuwait. I alluded in the opening statement to the necessity of bolstering local security forces, which is what we're doing in Afghanistan. Even after we left Uruzgan, we still had 300 people in Afghanistan helping to build the Afghan National Security and Defence Force at an institutional level. That's a possible thing, but, again, that depends on, in this case, what the government of Iraq seeks from international partners and how the government then considers that in the context of Australia's national interest.

Senator Payne: It's fair to say, Senator, that the sorts of issues which you're raising and which the Acting CDF is responding to are matters which are constantly under review and consideration by government, both from the perspective of the defence organisation but, more broadly, from the perspective of the national security agencies and committee of government and, indeed, the Prime Minister. We are also in regular dialogue and contact with our international counterparts. In the case of Afghanistan, it's in relation to the NATO mission; in the case of the coalition in Iraq and in Syria, the leading membership is particularly the United States. These are issues which are, as I said, under constant review. The environment is extraordinarily dynamic and that necessitates constant review. It necessitates global and domestic consideration of priorities and direction. We do that, as I said, regularly in consultation with the Chief of the Defence Force and the secretary of the department where appropriate and ensure that we're providing the best advice to government that we can.

Senator KITCHING: That raises two lines of inquiry. One is the infrastructure we currently have in the Middle East—the bases we have. Is that going to be adequate? If we are there for a longer period, is that going to be adequate? What kind of budget planning is being done about that? I think it also raises that strategic issue and that brings to mind the Foreign Affairs white paper. I understand that Defence is feeding into that process. I think that white paper was due a few months ago. I think it's coming.

Senator Payne: It's due in 2017.

Senator KITCHING: Firstly, perhaps we can go to the infrastructure that's currently there. If we are going to be there for a longer period, is that being thought through? Do we need to plan for that down the track? Is there an adequate budget to improve that infrastructure? The life of infrastructure doesn't go on forever, so what kind of planning do we need in those terms and then in the strategy around how we're feeding into that? I understand it is a dynamic process. Perhaps you could answer the first part and then I'll come back to a question around ASIO.

Vice Adm. Griggs : Do we have an ongoing thought process and plan around infrastructure in the area of operations?

Senator KITCHING: Yes.

Vice Adm. Griggs : Yes, we do. Obviously there are some sensitivities that I won't go into, remembering that we are guests. That's one factor that I think is very important. But we do have a process. We sustain the infrastructure that we have. The infrastructure, as you know, is varied and its level of permanency is varied also.

Senator KITCHING: That's really what I'm asking, because two years is a different time period to a longer time.

Vice Adm. Griggs : That's right. In Taji, for example, we are using old Iraqi army facilities on the base. There hasn't been significant work there in terms of upgrading those facilities, and they're quite austere—I think that would be a fairly reasonable way to describe them. Other places we've been, where the footprint has been there longer, they're more established and permanent. We're not going to invest unnecessarily, and we're not going to allow parts of the infrastructure, in places where we have a more permanent footing, to decay. That's the round—

Senator KITCHING: Yes.

Vice Adm. Griggs : I'm being deliberately vague—

Senator KITCHING: I understand.

Vice Adm. Griggs : You know why I'm being vague.

Senator KITCHING: I do. It occurs to me that if we're going to be there for longer, you know, you'll need the budget to do that. On the strategy part of that planning process, you've raised, you know, the South-East Asian nations working together. Minister, our ambassador to ASEAN, are we going to increase, perhaps, our engagement with ASEAN—with our neighbours and with ASEAN nations—through that process or will it be done through a variety of ways?

Senator Payne: The Defence white paper which we launched in 2016 indicated that Defence would have, as a significant priority, increased international engagement in the specific defence context itself. The joint task group, which the acting CDF spoke about in his opening statement, is particularly pertinent to that and to our focus in that regard. In addition to that, I have spent the last two days in the Philippines at Clark with the ASEAN defence ministers, attending the meeting of ASEAN defence ministers plus, which is the core ASEAN group and a number of other countries who have been part of that activity since 2010. That meeting yesterday enabled all of the key defence leaders in the region to engage and to participate in a series of formal exchanges as part of that forum, but also in innumerable bilaterals, to be honest, which are particularly useful for that engagement.

As well as that, just in last 2½ months, I and senior members of the ADF, including the Deputy Chief of Army, the Special Operations Commander and the CDF, have been in no less than Singapore, Laos, Vietnam, Thailand, South Korea, the Philippines, Papua New Guinea, Brunei and Cambodia as part of that engagement process. We are, for example, doing extensive work with Vietnam, under the Defence Cooperation Program, to use our experience and skills in engaging in peacekeeping operations to support them in their preparation to become a really serious international partner by joining in the UNMIS deployment in South Sudan as peacekeepers. Now, the bottom line for that, in terms of the UN's threshold requirements, includes English language skills. We have enhanced our existing English language training, on which we work with Vietnam, to turbocharge it, if you like, for that particular effort, which is extraordinarily well received. We have had diplomatic relations with Laos for many decades now, but never before now a visit from a Defence minister. My ability to engage with an important ASEAN member and neighbour and then to meet with the minister again in the Philippines yesterday is part of that outreach, that international engagement that we've talked about. Given the strategic challenges that we see in the region, a region which is focused and concerned about ensuring its security and stability in the current environment, these are really important connections and ones which the defence organisation, the ADF and I are working very hard to consolidate.

Senator KITCHING: Is there consideration of the interconnectedness? For example, Saudi Arabia is offering more scholarships to Malaysian students. There's potentially exposure to more extremism—Wahhabi kind of extremists. I feel that these are kind of interconnected questions, and our presence in the Middle East is not in isolation from what is happening in our region. And, obviously, Marawi as well.

Senator Payne: That is acutely recognised, Senator. In fact, in my bilateral discussions with the Malaysian minister for defence yesterday, we continued our conversation about the work that they are doing in terms of spreading a moderate message in relation to Islam and the work that they do within the region. It's fair to say that the recent experiences of the Philippines government and people in Marawi have very much focused the attention in the region of the transnational nature of the impact of events in the Middle East. The issue which I have raised since the first counter-ISIL meeting I attended in France at the beginning of 2016, just after I was appointed as defence minister, is the challenge of returning foreign fighters to this region, whether they returned because they chose to leave voluntarily or returned because events such as those which have occurred recently in Mosul and Raqqa have meant that Daesh has less of a force there. They are issues which we as a region have to deal with. There has been significant leadership taken by, for example, Malaysia in that regard. At yesterday's ASEAN Defence Ministers' Meeting-Plus, there was not a contributor who did not engage on that subject. It is very much to the forefront of discussions, and the regional implications are very front of mind for both governments and defence organisations.

Senator XENOPHON: I have some questions for Mr Gillis and Rear Admiral Sammut in relation to some ICCPM contracts that we've talked about at previous estimates. I take it Rear Admiral Sammut is on his way. If I could just pause for 30 seconds; I thought it would be fair to put those questions to—

Senator GALLACHER: You won't get this amount of time when you're premier!

Senator XENOPHON: That's not even funny.

Senator Payne: An interesting observation from a South Australian senator.

Senator GALLACHER: It's tongue in cheek!

Senator Payne: Hansard can't interpret that until you put it on the record!

Senator XENOPHON: I wouldn't want you upsetting Premier Weatherill, Senator Gallacher! I think Rear Admiral Sammut can hear, so I won't delay us any further. Mr Gillis and Rear Admiral Sammut, are you aware of the issues raised in the Auditor-General's OneSKY report No. 1 of 2016-17 with respect to consulting arrangements?

Mr Gillis : Yes, I am.

Senator XENOPHON: And you're aware of the issues raised by the Auditor-General in terms of the OneSKY arrangements?

Rear Adm. Sammut : Yes.

Senator XENOPHON: And you're both aware that the Auditor-General was critical of the amount of money that was paid to an ICCPM consultant, Mr Harry Bradford? He was paid approximately $1 million per annum, which could be $10,000 a day if he worked 100 days, or $5,000 a day for 200 days. I think the Auditor-General said Airservices' approach to contracting ICCPM to assist with the delivery of OneSKY Australia was ineffective in providing value for money for outcomes. Are you aware of the criticisms of the arrangements with Mr Bradford, Mr Gillis?

Mr Gillis : I'm actually aware of it, yes.

Senator XENOPHON: The Auditor-General was highly critical of the way in which ICCPM initially only had a small role, but that role increased substantially over time as more and more ICCPM consultants were engaged—ultimately to the tune of $9 million. That's on the record.

Mr Gillis : Yes, I have read the report.

Senator XENOPHON: Mr Gillis, you would be well aware of how this played out with the Auditor-General and the Senate RRAT committee. At the time, you were a director of ICCPM—is that right?

Mr Gillis : No, I'd actually resigned. As soon as I found out I was returning back to Defence, I resigned from the ICCPM, and I've had no further engagement at any level with the ICCPM since I rejoined Defence.

Senator XENOPHON: But you're well aware of the so-called 'husband and wife' controversy, where we had the wife working for ICCPM and the husband working for Airservices?

Mr Gillis : That's a matter of record.

Senator XENOPHON: Mr Gillis, in relation to Mr Bradford: in December last year, in a prequalified tender to ICCPM, Mr Harry Bradford was engaged by CASG—is that correct?

Mr Gillis : Because of my previous involvement, I have not had any engagement with ICCPM. I have let other officers in my organisation deal with it.

Senator XENOPHON: Can you confirm that CASG retained Mr Bradford?

Mr Gillis : I'm aware that Mr Bradford was working for CASG. I only subsequently became aware that it was through the ICCPM.

Senator XENOPHON: Mr Bradford was engaged for just under 12 months, according to contract documents I've obtained under FOI. How much was that contract for—are you aware of that?

Mr Gillis : I have recused myself from anything to do with those ICCPM contracts.

Senator XENOPHON: Does anyone know about that? Can anyone assist me?

Rear Adm. Sammut : Yes. Mr Bradford was engaged by the Future Submarine program under a contract in a purchase order raised on 15 December 2016.

Senator XENOPHON: 15 December 2016—is that correct?

Rear Adm. Sammut : That's correct.

Senator XENOPHON: The documents I've obtained through FOI indicated that that contract was for $891,000 plus travel—is that right?

Rear Adm. Sammut : That's the total contract value, yes.

Senator XENOPHON: Mr Bradford is again being paid from the public purse at approximately $1 million per annum—that's about right?

Rear Adm. Sammut : That's the total contract value, which would include a number of things. His rates are commensurate with the manner in which he was engaged previously by CASG for work that he was doing on independent assurance panels.

Senator XENOPHON: It's just that Auditor-General actually said that it wasn't value for money when he was retained for Airservices. You're saying he wasn't value for money for Airservices but is value for money for Defence?

Rear Adm. Sammut : I'm not aware of how value for money was judged in terms of his service in the conclusion reached by the Auditor-General in relation to Airservices. We've made the judgement about the work he's done for us on the basis of that work value and what he has provided in the course of his services to us, which we are judging as value for money.

Senator XENOPHON: I just make the observation that it's about the same amount of money as Airservices, and the Auditor-General actually said it was ineffective.

Rear Adm. Sammut : My understanding is that it's less than that amount, but, in any case—

Senator XENOPHON: It's a significant amount of money.

Rear Adm. Sammut : Yes. We are making the judgement for the daily rate that we engaged Mr Bradford.

Senator XENOPHON: What is the daily rate? If it's $891,000 plus travel, how many days are you expecting Mr Bradford to work for Defence?

Rear Adm. Sammut : We were looking at a rate of about 180 days of effort.

Senator XENOPHON: So it's about $5,000 per day?

Rear Adm. Sammut : It's about $4,500 per day.

Senator XENOPHON: Can we just go to the further appointment of ICCPM Solutions personnel? Three further contracts were issued to ICCPM in March this year by way of open tender—is that correct?

Rear Adm. Sammut : That's correct.

Senator XENOPHON: And you were the ultimate approving authority for those contracts, were you not?

Rear Adm. Sammut : For the additional contracts, yes.

Senator XENOPHON: Across those three contracts, five ICCPM Solutions consultants were brought on for approximately two years, with each consultant costing about $300,000 per annum?

Rear Adm. Sammut : There were five personnel brought on for that support. Sorry, what was your question in terms of costs?

Senator XENOPHON: Each consultant was costing approximately $300,000 per annum?

Rear Adm. Sammut : I'm just looking at the maths quickly. Approximately.

Senator XENOPHON: $300,000 per annum. For how many days—do you know?

Rear Adm. Sammut : It varies from 200 up to 250 days of effort.

Senator XENOPHON: Rear Admiral, I asked this of you at the last estimates, as to why this tender, a purportedly open tender—I will go back to the word 'purportedly' in a moment—which sought Defence project expertise, went through a Customs and Border Force service panel rather than the more obvious Defence services panel. Can you explain to me why the usual protocol was not used here and it went through Customs, not Defence?

Rear Adm. Sammut : I would point out that it is also usual for departments to use panels from other departments if it is judged that services are best sought by members of the panel from another department.

Senator XENOPHON: That doesn't answer the question. Why in this case, with ICCPM, did Defence go via the Customs services panel rather than the more obvious Defence services panel?

Rear Adm. Sammut : We made the assessment that what was on offer through the Border Protection services panel, in terms of the offering from ICCPM, best met our needs in terms of what we were seeking.

Senator XENOPHON: What was on offer that you could get through the Custom services panel that you couldn't get through the Defence services panel?

Rear Adm. Sammut : The particular skills and experience of the personnel that we engaged through Border Protection services panel.

Senator XENOPHON: Are you saying the Defence services panel was in some way deficient in providing the services that Defence needs?

Rear Adm. Sammut : We're saying we found a better match for the services we were seeking.

Senator XENOPHON: You may want to take this on notice: as a general principle, a rule of thumb, how often do you use the Defence services panel compared to, say, the Customs services panel?

Rear Adm. Sammut : I wouldn't know as a rough rule of thumb, but there have been many occasions over the past years where Defence as a whole has used other panels.

Senator XENOPHON: This was meant to be an open tender process. Did you go to the Customs services panel because you had a particular consultant in mind, and that could be achieved through the Customs services panel?

Rear Adm. Sammut : We had certain skill sets in mind, and we understood also that there were particular experiences that the personnel offered by ICCPM brought that were very pertinent to the program in terms of the work we are doing.

Senator XENOPHON: ICCPM solutions are not on the Defence services panel, is that right?

Rear Adm. Sammut : As I understand, we were able to obtain those services through the Border Protection services panel.

Senator XENOPHON: Sorry? You were able to obtain the services—

Rear Adm. Sammut : We were using what is a commonly accepted and standard practice to utilise existing panel arrangements from another government department where we could acquire the specific services that we were seeking from the individuals from ICCPM.

Senator XENOPHON: Through the FOI process I have an email here written by Mr Bradford of ICCPM dated Sunday 15 January of this year—it was about 10.00 pm on a Sunday night—directing Defence to engage ICCPM Solutions consultants and directing them to do that through the Customs panel. Chair, I have provided the secretariat a copy of that. It's a document obtained through the FOI process. It's annotated as such. I would be grateful if I could seek to table that and provide a copy to Rear Admiral Sammut and Mr Gillis. Obviously that needs to be looked at by the committee. It's annotated as an FOI document.

CHAIR: Yes, no worries.

Senator XENOPHON: I wonder if Rear Admiral Sammut and Mr Gillis could be provided with a copy of the emails. I want to give Rear Admiral Sammut an opportunity to look at that document. You've had a chance to look at it. Are you concerned by this email? It seems to me that the Customs services panel was used in order for a tailor made solution to bypass the Defence services panel in order that ICCPM Solutions could be retained.

Rear Adm. Sammut : The way I look at this is I was aware of the PMO leader that was being proposed. I had interviewed that person. I had an understanding of the skill sets and the particular understanding they had of submarine programs that were going to be particularly pertinent to the way we were running. Having understood what the capabilities of the team that was being proposed were, we were making sure that, in engaging them through ICCPM under the Customs panel, we continued to comply with the Commonwealth Procurement Rules. That is the advice we received: that it was legitimate and complied with the Commonwealth Procurement Rules. We proceeded.

Senator XENOPHON: Why did you call it an open tender? It clearly wasn't an open tender, because of this correspondence. This email indicates that there was nothing really open about it. It was a done deal.

Rear Adm. Sammut : Where have I specifically called it an open tender?

Senator XENOPHON: The tender itself. Not you, but it was meant to be part of an open tender process.

Rear Adm. Sammut : It was a process of obtaining personnel who were suitably qualified.

Senator XENOPHON: AusTender actually referred to it as an open tender. So that's the source.

Rear Adm. Sammut : In proceeding to a panel where there has been a competition to actually have members join that panel, there has already been a competitive process in the first place in terms of the credentials and so forth that people bring.

Senator XENOPHON: But, Rear Admiral, how can you say this was an open tender? This correspondence indicates that it couldn't possibly be a truly open tender as described by AusTender.

Ms Bergman n : It will have been reported in AusTender as an open tender because Customs would have used an open tender process to establish the panel. Any service orders that are put in place under that panel therefore get reported on AusTender as open tender.

Senator XENOPHON: Technically, it was an open tender in name?

Ms Bergman n : Yes.

Senator XENOPHON: Is it correct that the husband of the director of ICCPM Solutions, referred to in the Airservices and the Auditor-General's report, has now moved from Airservices to CASG? I don't want to name people; I just want to understand that—

Rear Adm. Sammut : I am not aware.

Senator XENOPHON: Could you take that on notice.

Mr Gillis : I'm aware that he was working for the CASG organisation for a period of time. He has not for the last couple of weeks.

Senator XENOPHON: But you understand the controversy with Airservices.

Mr Gillis : I understand that. But we also have to make sure that we don't undertake restrictions of trade, that people who have good qualifications and skills are useful. I don't necessarily agree with the whole context of the Auditor-General's report, but I won't get into that.

Senator XENOPHON: There is a question of an open process. According to information I've received, Mr Bradford's contract has expired. Can anyone tell me if Mr Bradford has been retained again, and what is his price?

Rear Adm. Sammut : Mr Bradford has not been retained. He has completed his work with us and he is no longer engaged with the Future Submarine Program.

Senator XENOPHON: Are you satisfied that this process—you won't be revisiting the circumstances of this process involving ICCPM? Are you completely comfortable about the process, even with the email that I have shown to you?

Rear Adm. Sammut : Yes, I am fully comfortable. It was fully legitimate. It complied with the Commonwealth Procurement. Rules. We assessed the quality of the people that were being provided. As a result of that and the work that they have been engaged in and the work that a number of them are currently engaged in, we believe that we are getting value for money.

Senator XENOPHON: Thank you, Chair. I might put some further questions on notice.

Senator RHIANNON: I want to ask some questions about contamination, mainly at Williamtown but a few general ones as well.

Senator Payne: Sorry, I missed the end to that? I heard you wanted to ask questions about contamination mainly, but I missed the rest.

Senator RHIANNON: Mainly about Williamtown but a few general ones as well.

Senator Payne: I will just ask the appropriate officials to come do the table.

CHAIR: Senator Rhiannon, there are several senators who have questions on this topic. Can you give us an indication how long you'll be?

Senator RHIANNON: It depends on how long the answers are. I don't think it will be that long. It depends on answers. There are three parts to this. When will the community reference group next meet; when will the elected representatives reference group next meet; and when will there be another community drop-in session for the people of Williamtown?

Mr Grzeskowiak : The community reference group is organised by the New South Wales government. They're going through a process at the moment of restructuring of the format of that group. It's a matter for them as to how that reformatting is concluded and when meetings will occur. It's also a matter for the New South Wales government as to who they ultimately decide to bring into that community reference group. From a Department of Defence perspective, we are planning on the next community information session sometime in the second half of November. I'm not sure if the dates are locked down yet.

Senator RHIANNON: Is the elected representative group yours or New South Wales?

Mr Grzeskowiak : That's organised by the New South Wales government, so I can't talk about when that might be.

Senator RHIANNON: What steps is the department taking to increase the capacity of the water treatment plants at the base to limit the further release of the potentially contaminated water?

Mr Grzeskowiak : We've recently introduced a third water treatment plant, which is a containerised plant we've brought in from an American organisation. That's now commissioned and treating water that's exiting out of Moor's Drain. We now have the water treatment plant associated with construction—that's been operating there for a long time; a water treatment plant cleaning water out of Lake Cochran, preventing discharge through Dawson's Drain; and a water treatment plant on Moor's Drain. So far, we've treated over 900 million litres of water, down to levels that are, in most cases, below the limit of detection. That water then is put back into the environment. We've ramped up our efforts in recent times. Those plants will continue to run for a considerable amount of time. We are still researching other methods for, particularly, cleaning soil. As well, on the base we are in the process now of starting to take away some of the surface soil from some of the drains on the base. We are digging 200 millimetres of soil out of around three kilometres of drains. We are doing that because that soil in the top of the drain has higher levels of PFOS contamination from over the years, so we are taking that out. As fresh rain comes down, it means it runs through soil that is clean and therefore doesn't take any PFOS off the base.

Those two strategies are in place at the moment. We're working through a process to start doing more remediation, particularly of what we refer to as a source area on the base. For example, the old firefighting training areas where, I think, our current plan is that we'd be seeking to excavate and store soil in a safe area until such time as we can find effective mechanisms for decontaminating soil.

Senator RHIANNON: All of the decontaminated soil that you are digging up from the drains has been stored on base?

Mr Grzeskowiak : It is being stored on base in a way that means it can't leach into the environment.

Senator RHIANNON: So the water can't leach through it?

Mr Grzeskowiak : Yes.

Senator RHIANNON: It's nearly two years since we had the inquiry. You knew about it before that, but there was no decision to actually stop the source at that stage. The water was continuing to run off the base. When was the decision made, if I understand correctly, to dig up the contaminated soil and to clean up the water that's coming off the base? Is it correct that there has been a change in policy with regard to remediation of the soil and water, so that you stop the source of this contamination?

Mr Grzeskowiak : I wouldn't characterise that as a change of policy. If we go back a couple of years, when we first held those community reference groups members of the community were obviously saying, 'Can you just stop this coming off the base?' At that time our response was, 'We're looking into mechanisms to do that, but there's no silver bullet or easy way of achieving that.' We're always going to try to stop the contamination leaving the base. We've stopped a significant amount of potential contamination coming off the base, through the water treatment activities that we're doing, but, as you may be aware, certainly from the information we've talked about in the community sessions, part of the problem in Williamtown in particular is the nature of the water table there. There are other mechanisms, particularly by PFAS moving from the soil into the underground water and then moving underground off the base. That is something we have not been able to stop at this point. Digging up the source areas is a mechanism of starting to stop that pathway. We've been quite open in saying that it will be a fair while before we'd be able to say, hand on heart, that we've stopped PFAS leaving the base.

Senator RHIANNON: Is part of the problem that you have in dealing with this enormous problem the upgrade that's going on at the base at the moment, that it has made it difficult for you to undertake the thorough remediation that's required?

Mr Grzeskowiak : No; in fact, quite the opposite. With the upgrade that's going on through the new air combat capability project, the first of the water treatment plants to be put in place, which has been there for at least 18 months, is treating the water that's associated with foundation work for those works. Because the water table is so near the surface, as you dig foundations, they naturally tend to fill with water. We've been excavating that water, sucking that water out through a water treatment plant, and reinjecting it into the ground as treated water. We've been testing the soil that's been excavated, and in the majority of it we're not finding any PFAS. In some parts of that excavation we found low levels of PFAS in that soil. Where that's been the case, the soil would have been either stored on base or disposed of through New South Wales EPA approved processes. It's fair to say that the works we've been doing, because of that water treatment plant that we've put in place, have effectively been contributing to the decontamination of the site.

Senator RHIANNON: I might have missed it when you said it, but, just to clarify: the soil that you're dealing with, and the water, is that all inside the base, or are you dealing with the contaminated soil outside the base as well?

Mr Grzeskowiak : At this point, the drain maintenance work and the soil that's being removed from the Joint Strike Fighter works—I should clarify that any soil we've had to store because of any contamination is stored on the base. At the moment that's work on the base. We have an ongoing study looking at the broader drainage network around the area outside the base—so Moors Drain, Dawsons Drain and the like—and we're working with Port Stephens Council on that. There will hopefully be some recommendations from that work that will give us an indication about options for further decontamination outside of the base. But the focus for starting the decontamination has been on the base, because that's the source area, and generally the advice is to try to decontaminate the source areas first to prevent further contamination, and then move further out to see what decontamination can be done in the broader area surrounding the base.

Senator RHIANNON: Can we move onto the issue of compensation? Has anyone been paid compensation yet—any family, any person?

Mr Grzeskowiak : We do have a range of what are termed 'non-litigated compensation claims' with the department.

Senator RHIANNON: The question was: have any been paid, not if they're in progress. First question: has anybody been paid?

Mr Grzeskowiak : To my knowledge, none of those claims have yet been settled.

Senator RHIANNON: So they are in progress. It's a matter of negotiation now about the price, is it?

Mr Grzeskowiak : They're being managed by our legal department through the normal process that they would use for that sort of claim management.

Senator RHIANNON: How many are you dealing with at the moment?

Mr Birrer : There are currently 25 non-litigated claims that have been received by Defence: 16 in relation to Williamtown, eight in relation to Oakey and one in relation to Katherine.

Senator RHIANNON: When did they commence and when do you think they'll be resolved?

Mr Grzeskowiak : The first of those claims probably would have been received in the order of 12 months ago. Some of them were received, or at least one was received, quite recently. I can't give a forecast for when settlement may occur.

Senator RHIANNON: But that's probably one of the most important questions for you to be clear on, because, with the stress this is putting people under, they just don't know what their future is. You would be aware that some people have now walked out of their homes and walked off their land. Surely you can give them some indication of when this will be finalised—I mean, you've got a whole department.

Mr Grzeskowiak : The claims are being dealt with by a legal team. I don't have personal visibility of most of those claims and I have no information about likely settlement times for those claims.

Senator RHIANNON: Can you take it on notice so that some clarity can be provided on this important question and people can have an understanding of what the future holds for them?

Mr Grzeskowiak : I'll take it on notice, but I'm not sure we can provide any further information than I'm giving. We generally wouldn't be able to talk about individual claims because of privacy reasons, of course. We will take it on notice, but I'd be surprised if we can give an answer that would say, 'These claims will be settled in this particular time frame.'

Senator RHIANNON: Can we move to the issue about—

CHAIR: Senator Rhiannon, there are other senators with questions on this issue.

Senator RHIANNON: Okay, I'll truncate these questions and do this quickly. You're now dealing with these problems in many areas. Is there a consistency between how you're working with the workers who have been impacted on the sites and the residents with regard to all the issues that you're dealing with, from compensation to health tests to remediation? Is there a consistency of standards you're working on? Let's start with blood tests. Is everyone being offered blood tests like they have been in Williamtown?

Mr Grzeskowiak : For those areas where the epidemiological study is in place, managed by the Department of Health, which includes blood tests, the eligibility criteria to be part of that process are the same for people whether they be members of the ADF or members of the public. For example, for Williamtown and Oakey, it's for people who've lived or worked within the investigation area, be they ADF people or members of the public.

Senator RHIANNON: Is that the same at all other bases where you have this problem?

Mr Grzeskowiak : We generally try and provide the same information and the same response mechanisms.

Senator RHIANNON: You just used the word 'generally', which always sets alarm bells off. Would you take it on notice to list the bases where the contamination has occurred? Are the blood tests provided? Are there drop-in centres? Are the measures you're offering in Williamtown offered in other areas for both workers and residents?

Mr Grzeskowiak : In terms of community engagement, it's absolutely the same wherever we go. In terms of providing information to members of the community and members of Defence on the base, it's absolutely the same wherever we go. However, we do not do necessarily exactly the same things at each place we're investigating because the circumstances are different. We're running investigations now at 23 separate sites.

Senator RHIANNON: Can you provide on notice what's different? Thank you very much. My final question, which I'm sure can be quick, is about Shoalwater Bay. I understand there are two bases there, and they don't appear to be on the government's current list of investigation sites. Is that the case? If so, why?

Mr Grzeskowiak : Shoalwater Bay is a Defence training area which has a range of facilities. Nobody's really based there full time; it's used for training. We currently are not planning an investigation there because our analysis of the range of Defence sites hasn't shown that that's an area where we think there'd be a significant risk of contamination.

Senator GALLACHER: The opposition is attempting to get a complete picture of this particular issue, so we're going to traverse some ground which people have already asked you questions about. Basically, there are 23 site investigations—is that correct?

Mr Grzeskowiak : That is correct.

Senator GALLACHER: So, literally, some of these have only just started and some are virtually complete?

Mr Grzeskowiak : That is correct.

Senator GALLACHER: Which sites are virtually complete?

Mr Grzeskowiak : The sites that are most advanced are obviously RAAF Williamtown and the Army Aviation Centre at Oakey. It is fairly well advanced at places like East Sale and Pearce, and then a range of investigations in other places that have been running for periods varying between six months and three months.

Senator GALLACHER: Can we get on notice the 'virtually complete' and the stage of the investigations?

Mr Grzeskowiak : We can provide that on notice.

Senator GALLACHER: You've added five sites? Is that correct? Lavarack Barracks—

Mr Grzeskowiak : Yes, we've added Lavarack Barracks, RAAF Base Learmonth, and Naval Communication Station Harold E Holt A and Harold E Holt B. Those five sites have been recently added and are commencing the process of investigation.

Senator GALLACHER: What about Gingin Satellite Airfield?

Mr Grzeskowiak : Yes, Gingin as well.

Senator GALLACHER: When you say you are virtually complete, does that include the development and implementation of an appropriate remediation strategy?

Mr Grzeskowiak : Mostly what I'm talking about here is the investigations we're running. They are comprehensive investigations. They generally take around a year, sometimes longer to run. Probably this is the largest suite of environmental investigations that's ever been run in Australia. When I talk about investigations starting or being nearly complete that is really about the investigation.

Senator GALLACHER: So there's no development or implementation of appropriate remediation strategies as yet?

Mr Grzeskowiak : There is at Williamtown and Oakey where we are now starting to treat water and excavate drainage systems to remove exposure pathways. At the other sites we're not yet at a situation where we're starting to look at solutions. With the exception of RAAF Base Tindal, in Katherine, where we're currently installing a water treatment plant on the town bore supply.

Senator GALLACHER: Is Defence able to provide a timeline that outlines when you expect the different investigation components, preliminary report, detailed environmental investigation, human health, risk assessment and so on? Can you do that for each of the 23 bases?

Mr Grzeskowiak : We can provide that on notice.

Senator GALLACHER: Some interesting information came out of some questioning of Airservices late the other night. They said there were two bases where there's foam that still contains PFAS being used by fire-fighting services other than Airservices. Is that correct?

Mr Grzeskowiak : That's a reference to RAAF Base Townsville and RAAF Base Darwin. The product we use in Defence at all of our sites is called Ansulite. We moved to that product following decisions in 2004, where Ansulite was selected to replace the previous product, 3M Light Water, which is the product used through the 70s, 80s and 90s, and where this contamination has come. At the time when Ansulite was selected, it was selected because it was environmentally friendly—it did not contain PFOS and PFOA as ingredients that were actively put into the product for use. Subsequently, we've actually done some testing of Ansulite and we have found what we refer to as trace elements of PFOS in Ansulite, orders of magnitude less than the amounts of PFOS in the previous products, the 3M Light Water.

I think there are two key points. Firstly, when we moved to Ansulite, from around 2004 onwards, we also started changing our procedures and the way we actually train with these products. Historically, the majority of these fire-fighting foams would have been put into the environment through training activities. Fortunately, we did not have that many actual fire or aircraft crash incidents. When we train now we really train just with water in the systems. We very rarely use the AFFF product in training. When we do, it's collected and taken away for disposal through processes that are endorsed by the various state and territory EPAs.

Senator GALLACHER: So there's no additional risk being exposed to those communities, because an observer can say, 'Well, we've got all these problems around the place and they're still using it'? You are saying that you are not.

Mr Grzeskowiak : We believe the product we are using is reasonably safe. We are, however, looking at alternative products that exist today. One of the reasons we use Ansulite is that it is compliant with the military specification. It is used by, I think, NATO and many countries around the world. That is a different specification to the civilian ICAO specification. The difference is driven by two things. Firstly the military fire-fighting foams need to be able to operate in a seawater environment, obviously for naval applications. Secondly, in the military environment there is an increased risk of a more energetic fire—for example, aircraft that contain not only fuel but also explosives. The mil spec requires that the fire-fighting product must extinguish a fire more quickly than the ICAO specification.

The product we use is used elsewhere, but we are looking now to see whether there are new products available that will meet the more stringent requirements of the mil spec and be the next generation of foams that are even more environmentally friendly.

Senator GALLACHER: We have some more detailed questions that you may be able to answer or take on notice. You have a huge estate, an immensely valuable estate in many areas. Is there a state contamination management plan?

Mr Grzeskowiak : We have—

Senator GALLACHER: Is there one?

Mr Grzeskowiak : Yes.

Senator GALLACHER: I didn't see any evidence of it when I was on the Cox Peninsula and asbestos was blowing around there, and we don't see any evidence of it at Oakey or Williamtown or any of the other hot spots that have come out. Do you have one and can you produce it on notice?

Mr Grzeskowiak : I do, and I can provide that on notice. Just a reminder that the issues we are dealing with from PFAS date back to the 1970s and 80s, and things may have been different in those times. But we certainly take our environmental responsibilities very seriously.

Senator GALLACHER: You have also stated that you're talk talking to in excess of 30 companies about remediation strategies to clean water and clean soil. Could you provide a list of all the companies you've been speaking to and the details of the proposed remediation strategies?

Mr Grzeskowiak : We can certainly provide a list of the companies we are speaking to. It may be difficult for us to provide the details, because some of the companies have come to us with commercially sensitive information. They have techniques that they think are patentable and world-leading and they wouldn't want us to put that into the public domain. But certainly we can come to you with the list of companies we've been in contact with over the last couple of years on this journey.

Senator GALLACHER: Would you be able to indicate which proposed strategies may show the most promise?

Mr Grzeskowiak : We're already using a range of filtration techniques for water. The most promising one at the moment is the ion exchange technique, which uses a series of pre-filtering through activated granular carbon and then an ion exchange column to remove PFAS. The best way of describing an ion exchange column is that if you assume PFAS was magnetic—

Senator GALLACHER: You can answer as long as you like, Mr Steve Grzeskowiak. We can stay here as long as we need to get through this brief.

Mr Grzeskowiak : Fine. Anyway, the—

Senator Payne: Senator, the officer was answering your question. I'm not sure what that gratuitous observation was for?

Senator GALLACHER: I was asking if any of the strategies are showing promise. He can indicate that on notice and we can get through the brief, or he can go at length. I don't really care.

Senator Payne: If you wanted the answer given on notice, please indicate. Other than that, the officer will provide you with the information—

Senator GALLACHER: I am sure there is more than one solution that is showing promise, and if he wants to go through them all that's fine by me.

Senator Payne: It is up to you, Senator. It's very complex and I thought the officer was trying to help you, frankly.

Mr Grzeskowiak : Ion exchange for water is being used and working. The more challenging problem is soil. There is a thermal desorption process, which requires frying the soil in excess of 1,100 degrees and then filtering the exhaust. We've used that once. We think it works, but there's still a bit more work on that needed. There are a range of other ideas that are at the development stage that show some promise. We can provide on notice as much as we can with the commercial sensitivities.

Senator GALLACHER: Mr Grzeskowiak, this is an extremely complex and widespread issue. I have specific questions on a number of sites and I know there are other people who want to question you in detail about various activities or issues at various sites, so if an answer to my question is going to involve a long response or a number of responses then perhaps the easiest way for us to deal with it would be on notice. One thing that is for sure is that this issue is not going away—it's not going away in this decade or probably the next. Let us run through some issues in the Northern Territory. How many homes or businesses are being supplied with bottled or boxed water by Defence?

Mr Grzeskowiak : There are 52 properties in Katherine and none other in the rest of the Northern Territory.

Senator GALLACHER: How many homes or businesses are located in the PFAS investigation area?

Mr Grzeskowiak : I don't know the answer to that question. We'd need to take that on notice and have a look.

Senator GALLACHER: Thank you. Has Defence made any requests to the Department of Health to expedite blood tests for Katherine residents?

Mr Grzeskowiak : We provide information from the various investigations we are doing. We will make that available to the Department of Health, who can consider that.

Senator GALLACHER: You haven't requested that the Department of Health expedite blood tests?

Mr Grzeskowiak : It's a matter for Health to make a decision on blood testing. We provide our analysis results and we provide human health risk assessment results.

Senator GALLACHER: If the question is, 'Have you made a request?' the answer is no?

Mr Grzeskowiak : Not in those terms, no.

Senator GALLACHER: Has any request been made by the minister or the Minister for Health with respect to expediting blood tests?

Mr Grzeskowiak : I can't talk for the minister.

Senator Payne: I responded to a question on that in the chamber last week, as you would be aware, Senator. Matters in relation to the decision making for Health are matters for them.

Senator GALLACHER: So you won't be making a request?

Senator Payne: What I said last week and would repeat is that Defence does not hold itself out to be a health authority or a health agency. We work on the advice that is provided to us by the authorities that are health agencies—in this case the Commonwealth Department of Health, the Chief Medical Officer and the Deputy Chief Medical Officer. The Deputy Chief Medical Officer in particular has been very helpful to Defence in supporting engagements in the community, meeting with members of the community and visiting a number of areas to assist with presentations and the provision of information. But that is a matter for the Department of Health.

Senator GALLACHER: And that's been advised to the Katherine community?

Senator Payne: Yes, I believe so.

Mr Grzeskowiak : We've had several meetings with the Katherine community and we have talked at length about the processes involved in government decision making.

Senator GALLACHER: Can you confirm, Mr Grzeskowiak, that the $700-plus million redevelopment at Tindal hasn't precipitated this PFAS contamination?

Mr Grzeskowiak : I can confirm that. We have an environmental management plan in place for the works at Tindal. Soil will be sampled and, if necessary, removed and stored on base or reused if the sampling demonstrates that it does not contain PFAS.

Senator GALLACHER: When did this contamination of the artesian water occur? Do we know?

Mr Grzeskowiak : As I have said consistently, these products were used from the 1970s.

Senator GALLACHER: We only found out about it when we tested it; is that what you are telling us?

Mr Grzeskowiak : Yes, we only discovered that as this testing process commenced.

Senator GALLACHER: So it could have been contaminated for years prior to the actual discovery. The artesian water, which I think is mixed with the Katherine River water to provide the town water, could have been contaminated for a decade before?

Mr Grzeskowiak : It could have been.

Senator Payne: It is the historical nature of what we're dealing with, Senator. It's a legacy issue.

Senator GALLACHER: I understand what we're dealing with, Minister. We did a couple of inquiries into it.

Senator Payne: I know.

Senator GALLACHER: I'm making the point that, if it's not the redevelopment for the F35 that precipitated this, what has happened is that it has only been discovered at some point in a chain, which could have been decades old.

Senator Payne: That's exactly the point.

Senator GALLACHER: So for 30 years they could have been drinking contaminated water until we tested it. That's the point.

Senator Payne: Senator, the nature of this—as you know from the inquiries in which you participated and as this committee knows from discussions that we've had here—is that its use as a firefighting foam historically, as Mr Grzeskowiak said, in the seventies and eighties in particular was widespread, not just on defence facilities but airports, rural firefighting facilities and a number of specific areas of industry activity where liquid foams are a concern and had been used there for safety. In an international context, let alone in a national context, it is a very long process, site by site, for us, through the 23 sites that you have raised with Mr Grzeskowiak today, of doing the investigations that need to be done to find the sort of information we're talking about. We don't, by any means, Senator—and let me be very clear about this—underestimate the size of this challenge and the nature of the challenge and what we, who are currently administering this organisation, have inherited.

Senator GALLACHER: I don't disagree, Minister. What particular evidence led Defence to discuss the need for an interim water treatment plant in Katherine?

Mr Grzeskowiak : I think it was 15 November last year that we were advised by Northern Territory Power and Water Corporation that some sampling they'd done of the town water indicated there were low levels of PFAS in the town water supply, below what are now the health based guidance values for drinking water. That was traced to the bore water, as you rightly said. The majority of the town supply comes from the river, but it is supplemented by bore water as required—usually, I'm told at around 10 per cent bore water. We learned around the same time as the community learned in a community information session and that media release in November last year. We've been working closely with Power and Water, and that is why we've put in place a treatment plant. It is similar to the treatment plant that we recently installed in Williamtown, using the same technology. It's a larger capacity.

Senator GALLACHER: Whose decision was it to get the treatment plant?

Mr Grzeskowiak : It was offered by Defence.

Senator GALLACHER: A tender process in respect of the supply of it?

Mr Grzeskowiak : It was a commercial process through contracting a company called ECT2.

Senator Payne: It's one of several that we've obtained.

Senator GALLACHER: So it was a tender and someone won the tender.

Mr Grzeskowiak : In this case, we would have probably gone direct to ECT2 because we've used—

Senator GALLACHER: Do we know the total cost of the treatment plant—applying it and installing it?

Mr Grzeskowiak : Yes. The total cost is around $4 million for acquisition, transport and the first year of use.

Senator GALLACHER: It's from the United States.

Mr Grzeskowiak : Yes. Then it costs around $400,000 to operate on an annual basis. That's the sort of order of cost. That plant is in commission at the moment. We were targeting end of October for it to commence, and my advice is that that is still on track. It will treat a million litres of water a day. You'd probably be aware that, in Katherine, the community have responded very well to the council's request for minimising use of water.

Senator GALLACHER: Yes.

Mr Grzeskowiak : In fact, since those water management measures were put in place in Katherine and on the base at Tindall, which also uses the town water, Power and Water in the Northern Territory have advised me that they haven't had to use any bore water, because bore water is really used to meet the demand. The river water treatment plant operates at capacity most of its time.

Senator GALLACHER: Would this fix the bore water issue—a million litres a day?

Mr Grzeskowiak : It will go a long way to fixing it, with the combination of water restrictions, particularly in the dry season; it's not such an issue in the wet season. With this plant, I anticipate that there shouldn't be any need to use untreated bore water, certainly not in the wet season. Power and Water are already saying that the levels of PFAS in the town water have come down dramatically because no bore water has needed to be added into the supply in the last five or six weeks.

Senator Payne: What the Northern Territory authorities have indicated is that the water, based on the information Mr Grzeskowiak has just given you, is safe to drink in Katherine. The levels that are recorded in the town water supply are very low in the order of parts per billion. But we have endeavoured to support NT Power and Water in the work they are doing with the provision of the water treatment plant. I have both met with the Chief Minister and discussed with the Chief Minister these sorts of aspects of defence support to ensure that we can provide that to the community.

CHAIR: Thank you very much, Minister. The committee will now suspend for lunch and return at 1.30.

Proceedings suspended from 12 : 30 to 13 : 30

CHAIR: Welcome back. We will now reconvene the Foreign Affairs, Defence and Trade Committee with the Defence portfolio.

Senator GALLACHER: We're still traversing PFAS and the Defence estate. While Mr Grzeskowiak is coming up, we want to talk about East Sale. Heart Morass: is that a—

CHAIR: Heart Morass. It's a field in—

Senator Payne: It's a wetland, it's very popular with hunters.

Senator GALLACHER: Okay. Is the detailed investigation at RAAF East Sale complete? Is that amongst one of the completed ones, Mr Grzeskowiak?

Mr Grzeskowiak : I'll ask Mr Birrer to answer that question.

Mr Birrer : The detailed site investigation for East Sale is still underway. We anticipate that it will be complete towards the end of this year. One thing that we're doing is working very closely with the state authorities in Victoria, particularly EPA Victoria, on the investigation.

Senator GALLACHER: So, we would expect the results to be released in December, or the inquiry to be completed?

Mr Birrer : Well, the investigation will be completed then. As for the release of it, we need to make sure that we consult appropriately with the state authorities and ensure that they agree with us that it's a basis for going forward with advice to the community. We don't lead on providing health and other advice to the community and so it's important that we engage with the state authorities as we proceed.

Senator GALLACHER: Whilst you wouldn't have a date for the report to be released, is it fair to say that it would be in the first quarter of next year?

Mr Birrer : Yes.

Senator GALLACHER: Will a community walk-in session be arranged before or after the report is made available to the public?

Mr Birrer : Senator, as we have throughout the country, as we reach important milestones in the investigations, including the completion of the major reports, we hold community information sessions. It's important that not only do we make the report available—

Senator GALLACHER: Sorry, is that before or after the release?

Mr Birrer : Usually at about the same time. Usually they are within a few days of each other, or we release a report on the day of the community engagement. It can vary. What's important about the community engagement sessions is that they're an opportunity for members of the public to speak to us and also to state and local authorities as appropriate. They can talk about what the report means and its recommendations for their own personal individual circumstances. It does vary, particularly with those reports that have had precautionary advice attached to them in the past, such as for Oakey and Williamtown. It's important that people come along and understand the results of the report in the context of their own lives.

Senator GALLACHER: So, it's important that you don't have Defence personnel saying that this is the next asbestos, as is alleged to have happened—

Mr Birrer : We are on the public record there, and Mr Grzeskowiak has explained in the past, that the official who said that at that point in time was not qualified to do so. PFAS is an emerging contaminant. We're working from the health advice that's available to us from the appropriate health authorities—and that is that there's no consistent evidence of adverse human health impacts from exposure to PFAS. But because of the persistence of the chemicals in the environment and in people, the health advice is to minimise exposure. What our environmental investigations do, if they proceed to the human health risk assessment stage, is to provide people with advice on how they can minimise their exposure to PFAS.

Importantly, one step that we're taking, even as we kick off the investigations, is that we make available as a precautionary measure alternative drinking water to those people who live near the sites under investigation and who use bore water for drinking.

Senator Payne: Chris, you might want to talk about the community engagements which we've done at East Sale.

Mr Birrer : Yes, Minister. We've held community engagements at East Sale. The most recent one was on 8 June, where we held a community information session to provide the community with the results of the investigations to date. Prior to that, there'd been four community engagement activities since April 2016 and also a letterbox drop on 20 April 2017.

Senator HANSON: Can I ask where the community meetings have been held? Because we've got problems up at Oakey and we've got problems down at Williamtown and—

Senator Payne: Senator Hanson, we're specifically discussing East Sale.

CHAIR: Sorry, Senator Hanson—you've come in late, and we're talking about the Heart Morass, which is down in Gippsland in Victoria.

Senator HANSON: Right, thank you.

Senator GALLACHER: So it's fair to say that there will be a report completed; there will be public consultation; and we're anticipating—or, at least, I'm putting words out there—that it will be in the first quarter of next year that this activity will take place?

Senator McKENZIE: Before duck hunting season? No, seriously; that's what Heart Morass is used for. It's owned by Field & Game Australia, and it is a conservation property that is accessed by duck hunters. Given that they've all been asked to throw out the ducks they got this season as a result of this particular issue, I'm asking if it's envisaged that they'll know before next season whether they'll be able to hunt on Heart Morass.

Mr Birrer : I can't answer about the advice that will be provided to members of the community. What I can say is that, as we're continuing with this investigation, we're working very closely with EPA Victoria and other Victorian government authorities, as appropriate. The advice around not consuming ducks that people have hunted in the Heart Morass was provided by EPA Victoria. The EPA Victoria press release did mention that it's precautionary advice, and it goes back to that health advice that there's no consistent evidence of adverse human health impacts. EPA Victoria has said that they will review the advice that they provide in light of the further findings of the investigation.

As we continue with the investigation, we're undertaking regular consultations with EPA Victoria about the methodology of the investigation and also sharing results as we go. It was the results that we shared, in relation to the animals that were captured in the Heart Morass, which formed the evidentiary basis of EPA Victoria's precautionary advice.

Senator GALLACHER: Aside from Heart Morass, are there other off-base areas included in this investigation?

Mr Birrer : With each investigation, we continue—

Senator GALLACHER: This one will do.

Mr Birrer : to follow where the PFAS is. Each site has its own unique geology and hydrology. We need to understand the hydrology and geology of each site and build a conceptual site model which looks at where waters flow from source areas in the base potentially into the community. It's those water flows that carry the PFAS, so we need to follow those flows. In this instance, the surface water flows, from our hydrology models, do move from source areas on the base down into the Heart Morass.

Senator GALLACHER: I'll repeat the question then; maybe you didn't hear it. Are there any other off-base areas included in the investigation, aside from Heart Morass?

Mr Birrer : Yes; because we follow the—

Senator GALLACHER: So can we name them? Or don't we have names for them?

Mr Birrer : It's the area around the base. On our website, from the report that we released in June, we have the information about the site and its conceptual model.

Senator GALLACHER: Were livestock living in paddocks tested?

Mr Birrer : I'd have to take that on notice.

Senator GALLACHER: Were livestock living in paddocks on the base tested?

Mr Birrer : I'll have to take that on notice.

Senator GALLACHER: If so, what were the results? Did Defence provide—well, you haven't got an answer for that; you don't know. You haven't tested—

CHAIR: That's actually not what the officer said. He took it on notice, which is very different to saying he doesn't have the answer.

Senator GALLACHER: I'll rephrase the question. Have you conducted testing of livestock in paddocks on the base?

Mr Birrer : We'll take that on notice and come back to you with details around that.

Senator GALLACHER: Given that we might come back in March or May or whenever it is, have you got anybody that could confirm that before the end of the day?

Mr Birrer : We'll take that on notice and have a look into it.

Senator GALLACHER: That's not the question. The question is: can you do it quicker than the on-notice—

Senator Payne: We'll see if we can.

Senator GALLACHER: Thank you. Does Defence have any reason to suspect that the EPA advice to hunters and fishers would be expanded to any other category of livestock?

Senator Payne: It's a matter for the EPA.

Mr Birrer : No; we're not the appropriate authority to be providing environmental health advice to the public. That's for EPA Victoria. We have no basis for saying yes to that.

Senator GALLACHER: Does Defence have any contact with commercial fishers in the local area?

Mr Birrer : We have had contact with commercial fishers in the area, and Defence had a further meeting with one of the major fishers in the Heart Morass yesterday.

Senator GALLACHER: Who in Defence contacted the commercial fishers?

Mr Birrer : One of our colleagues in the PFAS investigation branch.

Senator GALLACHER: Is there a title or a name?

Mr Birrer : It's one of the officials in our organisation.

Senator GALLACHER: What level?

Mr Birrer : He's a director.

Senator GALLACHER: A director in the division of?

Mr Birrer : The infrastructure division in the PFAS investigation team.

Senator GALLACHER: Is that a taskforce looking at this issue?

Mr Birrer : It's not a taskforce, but, within the infrastructure division, we have what we call a branch which is dedicated to PFAS investigation and management nationwide.

Senator GALLACHER: Did anyone from Defence follow up that initial contact with commercial fishers?

Mr Birrer : We've had a few contacts with him. As I said yesterday, we had a further discussion with him.

Senator GALLACHER: When was the further discussion?

Mr Birrer : Yesterday. But we'd had discussions last week as well.

Senator GALLACHER: Perhaps on notice you could give us the schedule of meetings, the contact with the commercial fishers and the follow-up of the meetings. Is PFAS contamination continuing to leach into Heart Morass?

Mr Birrer : This was discussed this morning as well—the PFAS moves from source areas on bases off the bases. While there continues to be PFAS on the bases, there's always some migration of the PFAS from the base, from the source areas.

Senator GALLACHER: Do we know the level of contaminant entering Heart Morass from the defence base?

Mr Birrer : We do have, through our environmental investigation, levels of PFAS based upon the sampling and modelling that we've done under the investigation.

Senator GALLACHER: What is the level?

Mr Birrer : There are various levels. Each time you take a sample, you get a different level. We can provide that information to you on notice. The investigation reports to date are available on our website.

Senator GALLACHER: That'll be fine. Is any action being taken to prevent further leaching?

Mr Birrer : Currently at East Sale, we're still in the stage of understanding the nature and extent of any contamination. As we discussed this morning, that investigation is not as far advanced as at Oakey and Williamtown, where we have a greater level of understanding and so can implement management initiatives based upon that knowledge and understanding.

Senator GALLACHER: Are you saying that each solution or resolution at each base is a bespoke solution? It is not a—

Mr Birrer : Yes, most certainly. The hydrology and geology of each site is different, and any sorts of management or remediation steps that are taken have to take into account the unique features of each site.

Senator GALLACHER: But the contaminant is persistent and relevant to each site. Whilst the hydrology, the geology and the lay of the land, so to speak, may be different, the contaminant's there and you know what fixes that, don't you? Or haven't you got there yet?

Mr Birrer : The chemical itself we understand, but its interaction with the environment around it is the key aspect. The remediation and the management options are really about managing the chemical in the particulars of the environment that it's in.

Senator GALLACHER: If we move to Williamtown—how much has Defence invested in support services for the Williamtown community? I do note that this committee produced a report in February 2016 with a number of recommendations. How much has Defence invested in support services and what support services are they?

Mr Grzeskowiak : In Williamtown, we've been providing water to those residents whose only source of drinking water was from contaminated bores for quite some time. We've also funded the connection of properties to town water. That's a process that's ongoing, with around 70 properties connected thus far. That town water funding adds up to around $7 million for the Hunter Water's infrastructure and then individual connections to properties. That's an ongoing piece of work. We also funded—you may recall that Fisheries NSW put in place a fishing ban in September 2015, which has now been lifted, but, during the process of that, those fishing businesses that couldn't transact were able to access a financial assistance program. The total of that was around $2.2 million.

We have also provided additional community liaison support and mental health facilities through the Department of Human Services. The cost of that is approximately $3 million, from memory. As well, the government has invested in the epidemiological study and associated blood testing. It's managed by Health, but Defence transferred $12½ million to Health to fund that process. And the government has set up a national research program, with an initial injection of around $15 million, which is broadly looking at research into these chemicals. So that's the order of costs for the support directly to the community, and all of that, of course, is over and above the costs of investigations and clean-up measures that we have in place at the moment.

Senator GALLACHER: Are psychological services included in any shape or form?

Mr Grzeskowiak : Yes, they are, and they're delivered through the Department of Human Services but funded by Defence.

Senator GALLACHER: Do we know what percentage of the community has taken that offer up?

Mr Grzeskowiak : No; we wouldn't have that sort of information in Defence. Human Services may be able to answer that.

Mr Birrer : The Department of Human Services has a dedicated community liaison officer who works with the community. While Defence funds the Department of Human Services for that, that officer works under the privacy and confidentiality arrangements put in place by the Department of Human Services, as is appropriate. Defence also provides funding to a less formal community wellness program.

Senator GALLACHER: Is Defence a member of the Elected Representatives Group?

Mr Birrer : We attend the Elected Representatives Group. I don't know if, in the terms of reference, we're a formal member, but we do attend.

Senator GALLACHER: In what role do you attend? Is it just a listening brief?

Mr Birrer : We attend to provide an update on Department of Defence activities at Williamtown—to answer questions from the elected representatives to help inform them of what activities Defence is undertaking in Williamtown.

Senator GALLACHER: Will Defence have a role in the newly formed Community Reference Group?

Mr Birrer : The New South Wales government is leading the Community Reference Group and the Elected Representatives Group meetings, but we've made clear that we'll attend any meetings and provide information to members of the community and elected members as they request.

Senator GALLACHER: Did Defence provide any feedback on the membership of this new group?

Mr Birrer : Of the steering group?

Senator GALLACHER: No—the newly formed Community Reference Group.

Mr Birrer : I'd have to take that on notice.

Senator GALLACHER: Perhaps you could take on notice whether you've provided feedback and whether you were asked to provide feedback on the membership of the group.

Mr Birrer : Yes.

Senator GALLACHER: Have you provided advice to the parliamentary secretary for the Hunter, Mr Scot MacDonald, regarding membership of the group?

Mr Birrer : No, we haven't provided that. The review of the Community Reference Group was managed by the New South Wales Department of Premier and Cabinet, who hired a consultant to do it for them. Parliamentary Secretary MacDonald didn't conduct the review.

Senator GALLACHER: So you haven't provided advice to him? That's the question.

Mr Birrer : No.

Senator GALLACHER: In the Four Corners interview, Mr Grzeskowiak, you stated the PFAS contaminant off RAAF Base Williamtown is constantly under review. In respect of that, has the plume changed?

Mr Grzeskowiak : We're just updating the reports for the supplementary investigations that we've done. When we have those reports the information we have in there will be made available to the public. I would anticipate that in the relatively short period since those initial reports were put out we wouldn't expect to see significant changes in the plume. These chemicals are known to move reasonably slowly through the environment, although they can move themselves a long way, because they persist for a long time. But that information will be made fully available. Our intent is always to follow the chemical for as far as it's gone in the investigations we're doing rather than stop at some arbitrary line on a map that may have been drawn at some point in time.

Senator GALLACHER: Are you able to table the most recent map of the Williamtown investigation area showing the contamination plume?

Mr Grzeskowiak : We'll be able to make that available once that report is finalised, which I think is a bit later this year. We're very close to that. As I said earlier, we're planning on going to the community probably towards the end of November, so we would be in a position to have the latest information at that time.

Mr Birrer : And that's information about the contamination plume and our understanding of it. You mentioned a map of the investigation area. That investigation area was set by the New South Wales EPA and is available on their website and also on ours.

Senator GALLACHER: Okay, but I think what we're trying to track here is—there's a map available. Mr Grzeskowiak stated that the spread of the contamination is constantly under review. We're asking you whether it has changed over time, the ways in which it has changed and whether you have a more definitive map of the contamination. That's all we're asking.

Mr Grzeskowiak : And we will have in November, and that will be made available; it will be on our website. But we can make it available to the committee via a question on notice.

Senator GALLACHER: Okay. Are you able to advise whether PFAS contamination has spread outside of the red zone in Williamtown?

Mr Grzeskowiak : My understanding is that there has been some sampling outside of the initially declared investigation area, and that would be no surprise to me. We of course know that some of the fish in Fullerton Cove contained PFAS. Fullerton Cove is outside of the area declared by the New South Wales EPA. So, it's no surprise to me that that's been found. And as I've always said, and certainly as we say in our community engagements, when we plan our investigations we run the initial investigation in an area that we think is the area where we should be looking. Based on the results we find, we then decide whether we need to adjust that area—either shrink it in some areas or expand it in others. Generally, we'd probably find that if we were expanding the area it would be following known watercourses or following movements in an aquifer once they've been understood by the scientific investigation of the hydrogeology of an area.

Senator GALLACHER: Just for clarity: who declared the red zone in Williamtown?

Mr Grzeskowiak : The New South Wales Environment Protection Authority.

Senator GALLACHER: And you are conducting evaluations to see where the contaminant is and where the plume is and you'll produce a map, which might show that the red zone has expanded—or contracted?

Mr Grzeskowiak : We've already produced maps from the initial investigations. In fact, we've also produced mathematical modelling showing the likely movement of the plume over time. Of course, that is a mathematical model; it looks into the future. That modelling information, in terms of maps, has been made available to the community and is on our website. But what we'll be able to produce next month is the latest map based on the latest round of sampling, which will probably show some change from the previous map, as you'd expect, over time.

Senator GALLACHER: Why do we have a red zone in Williamtown? Do we have one in Oakey or Katherine?

Senator Payne: That's a decision of the New South Wales government.

Senator GALLACHER: That's the purpose of asking the question.

Mr Grzeskowiak : But that is the answer. The New South Wales government declared that on I think 3 September 2015. Where we are doing investigations in other places, we have an investigation area which is based on our experts' initial view of where they think we should look, and we tend not to draw thick red lines on maps—

Senator GALLACHER: So we haven't got a red zone in Oakey or Katherine; we've got an investigation area.

Mr Grzeskowiak : We have investigation areas in every investigation we're running, including at Williamtown. We refer to the investigation area as the investigation area. Others refer to it as the red zone.

Senator GALLACHER: And you've given us a report on homes in Williamtown waiting to be connected to town water. Are there some that are not connected as yet?

Mr Grzeskowiak : There are. There are around 199 properties that are eligible for connection to town water in Williamtown in that Hunter Water have said that their system can reach. Not everybody who's eligible has expressed a wish to actually be connected. There are about 170-odd properties that have said they want to be connected; 70 of those properties are connected as of yesterday, and the rest are being connected over the next few months. So, it's a work in progress. Obviously the first part of this job was for Hunter Water to put in the basic infrastructure to reach these properties, and obviously that takes a little while, but now the infrastructure's essentially in place the connections to individual properties are accelerating.

Senator GALLACHER: Does that mean you've had to put water past these residential holdings?

Mr Grzeskowiak : For the 70 properties that are connected, they're now connected to town water, using the town water, and that process is going on. Hunter Water is doing the work; Defence is funding it.

Senator GALLACHER: So, you've moved as swiftly as you can. Any indication of delay is basically out of your hands. Is that what you're saying?

Mr Grzeskowiak : No, we're not saying there's a delay. The procurement process takes some time. Hunter Water have done a good job, in my view, in terms of their design of the reticulation system to reach out further than their system previously reached out, and that's going well at the moment.

Senator GALLACHER: So you'd reject any criticism that it's taken too long?

Mr Grzeskowiak : Yes. I am not aware of that criticism. I'm sure there are some people who might hold that view, but the project is progressing quite well and I think it's due to be finished if not at the end of this year then very early next year.

Senator Payne: And where it's not been implemented at this point and bore water is in use then drinking water is being supplied, of course.

Senator GALLACHER: AECOM's hydrological study shows that without remediation PFAS would still be present in Williamtown's aquifer in 2036. Is that a correct statement?

Mr Grzeskowiak : That is what their mathematical modelling shows. That's the modelling I made a reference to a little bit earlier. That model assumes no attempt at remediation at all. We've already started remediation in terms of treating the water with those three water treatment plants, removing contaminated soils from the top 200 millimetres of the drainage system, so—

Senator GALLACHER: You're quoted as saying that if Defence can do more clean-up activity then it can be assumed that the area would be free in advance of those studies. Is that a statement you'd stand by?

Mr Grzeskowiak : Yes, that makes sense. The AECOM report assumes no decontamination. If we do decontamination then obviously we would expect to see the clearance of PFAS occur more quickly. There is still debate amongst regulators and scientific experts about what level you could sensibly expect to reduce PFAS in the environment down to, simply because these chemicals are ubiquitous in the environment; they've been used for so many applications over the years—and I won't go into the detail of that. Cleaning the environment to not one molecule of PFAS is probably not credible. But we work with the EPA about what levels we should seek to try to achieve. It is particularly difficult when the chemicals are in underground aquifers.

Senator GALLACHER: So, in the absence of any silver bullet—and you've given evidence that there are about 30 companies you're dealing with, commercial-in-confidence or sensitive treatments—are there any that show more promise than others? Or are you going to have to use a suite of measures?

Mr Grzeskowiak : I think the answer is that we'll be using a suite of measures. As I said earlier, we found some ways that seem quite effective at treating water. Soil would seem to be the major problem area. And I think there'll be a range of measures that will be applied, depending on a range of things. So it can be the soil types; it can be the hydrogeology. So we are just constantly working with industry looking for the range of options that can be planned into decontamination processes in future.

Senator GALLACHER: Is there a water treatment plant at Lake Cochran?

Mr Grzeskowiak : There is. It's been treating water since around January or February this year. It's currently treating—

Senator GALLACHER: Is that showing promise?

Mr Grzeskowiak : Yes, that's treating water down to well below the drinking-water-level standards. In fact, even down to below the limits of detectability of PFAS in the water. That's been working now since January or February and will continue to work for at least another year or so as we look at other options for remediating Lake Cochran.

Senator GALLACHER: Port Stephens Council and yourselves have been in discussions about a drainage study of Moors Drain, that's the main outlet from Williamtown is it?

Mr Grzeskowiak : There's two main outlets—Moors Drain and Dawsons Drain. As I said earlier, we've got an engineering study ongoing at the moment, working with Port Stephens Council, looking at options for remediation of that drainage system. We'll see what the engineering study recommends and then work out how to proceed.

Senator GALLACHER: I understand that even prior to the revelations of contaminated run-off from Williamtown, there were discussions about the stormwater events and occasional flooding for downstream rural farms and residences, and that you had informally agreed to fund that project anyway—is that correct?

Mr Grzeskowiak : Over the years Defence has put some money into drain remediation and various parts of that drainage system, because some parts of the drains were clogged. I'd have to refer to notes, but I think we spent something of the order of $170,000 three or four years ago. As you've said, that was more about the drainage system clogging and overflowing into people's properties, and we just helped out Port Stephens Council with some funding so that they could do some remediation work.

Senator GALLACHER: Is it fair to say that you are undertaking a study in conjunction with Port Stephens to commission a drainage study for this?

Mr Grzeskowiak : There's an study ongoing, which we're funding. When we see the results, we'll work with Port Stephens Council on options that we can implement.

Mr Birrer : Senator, it's a very complex drainage network around Williamtown base. It's also complex in that there's the different agencies to engage with: the New South Wales EPA needs to be consulted, and also the Port Stephens Council and the New South Wales Office of Environment and Heritage. It is a very complex hydrology around there and we need to work and make sure that we study how the drains operate comprehensively before looking at any sort of management actions.

Senator GALLACHER: Are you paying for that study?

Mr Grzeskowiak : Yes, Defence is funding those studies.

Senator GALLACHER: So, accepting it's a complicated process, and that you're paying for the study: you're not in any tender process at the moment?

Mr Grzeskowiak : Not for remediation external to the base at this time. We need to study and we need to see what the recommendations are for the best way of starting to attack that problem.

Senator GALLACHER: Now, if we could go to Lavarack Barracks in Townsville: what evidence from the desk-based audit made Defence include Lavarack Barracks? Have you got fire-fighting training capability at Lavarack Barracks?

Mr Grzeskowiak : I think Lavarack Barracks was not one of our top-priority bases. There have been aviation operations out of Lavarack. The desktop study would also have identified that, so it's an area we need to look at. We don't see it as a high-risk area, which is why it's been one of the later investigations to kick off.

Senator GALLACHER: How old is the base?

Mr Birrer : It was built during the Vietnam era build-up—

Senator GALLACHER: Is that why you've got it on the books as being there that long?

Senator Payne: There was a picture of Malcolm Fraser at the opening—

Mr Grzeskowiak : Yes. From the desktop review that we did then, it came up as one of the lower-priority bases that we should have a look at. I don't imagine we'll discover anything like the extent of PFAS that we have at some other places.

Mr Birrer : The investigation at Lavarack Barracks is in the very early stages. We have a consultant on board who is undertaking the investigation. These legacy firefighting foams were used in the past as part of training activities by people such as petroleum handlers on the base, and now we're working through keeping the community informed. We held a community engagement session earlier this month for the people around Lavarack where we asked people to come forward should they be using bore water for drinking purposes. At the moment, we don't know of anyone there who is.

Senator GALLACHER: So it was commenced in October, but do you have any idea when the report would be expected to be released?

Mr Grzeskowiak : These investigations generally take around 12 months. This one commenced, literally, in the last few weeks, so I would expect the final report in about a year's time. But there are various stages of reports that are delivered along the way.

Senator GALLACHER: Is the same consultant investigating both Lavarack Barracks and RAAF Base Townsville?

Mr Grzeskowiak : We have RPS Australia at Lavarack Barracks, and at Townsville it is WSP/Parsons Brinckerhoff. They are different consultants.

Senator GALLACHER: If you could take it on notice. Is the work being done concurrently?

Mr Grzeskowiak : Yes, there's not a question that one has to happen before the other. They would start as soon as they are able to start.

Senator GALLACHER: Do you provide a map at the start of the exercise or is that produced as a result of the investigation?

Mr Grzeskowiak : It's produced as a result of the investigation. The first thing we do is a preliminary site investigation. The consultants form their view about where the detailed site investigation should be based on that preliminary investigation. We would brief the community on the outcome of that. Initially, they will look on the base in various areas, and they will go outside and look in waterways. If there are any bores that people have that we could sample, we would do that sort of thing to see, and, from there, a more detailed investigation is planned and implemented. It's very much a staged approach. It follows the National Environment Protection Measures standards framework from 1999 that is used across federal and state entities to apply a scientific approach to the way we do this.

Senator GALLACHER: I have two more boxes to do. I will throw this one in and maybe you can answer it at the end. What is the process for involvement of stakeholders and members of environmental groups and members of parliament in the community consultation? Do you seek them out, or do you advertise? How do they know what's happening? How would they follow this process?

Mr Grzeskowiak : We do advertise. For example, if we were starting an investigation then we would advertise in the local press or we would try to get on the local radio to make sure that people were aware that we were running community information sessions, and we would speak to local councils and local members. We would try to engage all of those sorts of people and the relevant environmental protection agency. We would then try to widely publicise through media the fact that we were holding community information sessions. We also have web pages for each site and we try to keep the information updated so that people can go to the web pages. There is usually a telephone number associated with all of that so that people can ring in.

Senator GALLACHER: I have two final broad questions. The committee's report recommendation 5 on 16 February 2016 recommended that the Commonwealth government commit to voluntarily acquiring property and land which is no longer fit for purpose due to PFOS or PFOA contamination from RAAF Base Williamtown. Has Defence considered a policy for property acquisition at both Williamtown and Oakey?

Mr Grzeskowiak : This matter is being treated on a whole-of-government level. There is a taskforce established within PM&C that is working on this. Defence works closely with the taskforce in providing information of the various activities that we're undertaking. PM&C would be better able to answer details about the status of that.

Senator GALLACHER: In its budget allocation, is Defence doing any work about the potential cost of property acquisition at contaminated sites?

Mr Grzeskowiak : We have some forward budget allocations for decontamination. Until such time as there is a decision by government on a way forward around property acquisitions or other recommendations—I don't think we can make a provision for that until we know there's an action to take.

Senator GALLACHER: You must appreciate the irony of your potential acquisitions in Townsville and Shoalhaven bay, where no-one wanted to sell there, and other places in Oakey and Williamtown where people are begging you to take up additional land.

Senator Payne: We'll take that as a comment, Senator.

Senator GALLACHER: I thought it was ironic, that's all.

Senator Payne: Yes, but it is not a question.

CHAIR: No, it's not.

Senator GALLACHER: There was a question there. You must appreciate the irony? That was the question.

Senator Payne: I don't think the standing orders and guidelines enable you to invite an officer to appreciate the irony.

Senator GALLACHER: I'm sure that those listening would appreciate the irony of Defence's position.

Senator Payne: They may understand the purposes for which training areas are used and the purposes for which the bases we're discussing are used; you never know!

Senator GALLACHER: You've partly answered this with Senator Rhiannon's questions. The Department of Defence advised in May that it had received 21 claims for economic loss from businesses around Williamtown and Oakey, and I think that had gone up to—23?

Mr Birrer : Twenty-five, Senator.

Senator GALLACHER: Twenty-nine.

Mr Birrer : Twenty-five.

Senator GALLACHER: Twenty-five. So, what is the status of these claims and when might they be settled?

Mr Grzeskowiak : As I said earlier, the claims are being worked through due process. I'm not in a position to make any statement about when they might be settled because I have no knowledge of that. I don't have personal visibility of those claims, and it would be inappropriate for us to talk about them in detail. We did take, I think, on notice earlier a question to see if we could provide more information on that. If we can, we will.

Senator GALLACHER: Just for the record, Mr Grzeskowiak, what is your title?

Mr Grzeskowiak : Deputy Secretary, Estate and Infrastructure.

Senator GALLACHER: So you're the most senior person in Defence in respect to the estate?

Mr Grzeskowiak : I'm the deputy secretary with the responsibility for management of the facilities and infrastructure in Defence.

Senator GALLACHER: And you can't give any clarity on these landholders or these claims?

Mr Grzeskowiak : I'm not in a position to because I don't know.

Mr Birrer : Chair, Senator Gallacher asked before about testing of livestock on and off base at East Sale. There's been no testing of livestock.

CHAIR: Thank you.

Senator LEYONHJELM: I don't have a lot of questions, so I will be brief. Some of them you may need to take on notice. I understand that Defence buys some equipment that has already been produced overseas and there is also some equipment designed specifically for Australia—you might call them bespoke. Am I right in that assumption?

Vice Adm. Griggs : Yes, we buy a range of equipment from a range of different origins.

Senator LEYONHJELM: Yes, okay. Can you give us roughly an idea of what percentage of Defence procurements fall into either category—that is, off-the-shelf platforms and bespoke platforms?

Vice Adm. Griggs : I will get Mr Gillis to come up.

Senator LEYONHJELM: Did you hear the question? Do you want me to repeat it?

Vice Adm. Griggs : Can you repeat the question, please?

Senator LEYONHJELM: My understanding is that we, for Defence, buy some equipment off the shelf, already in production, and we also have platforms that are designed specifically for us—'bespoke' is the term that I've used. My question is: can you roughly estimate what the percentage is of Defence procurements involving simply buying off-the-shelf platforms and what percentage is bespoke?

Mr Gillis : To give you an accurate answer I will take that on notice, because the clarity between something which is purely off the shelf and something which has a minor modification can vary. I will try to give you as much detail as I can.

Senator LEYONHJELM: While you're taking questions on notice, I am interested in what has been the relationship between off the shelf and bespoke—and I accept it's not always black and white—over the last 25 years. Can you give a rough estimate of the ratio or proportion of each category?

Mr Gillis : That's an even more complex answer. I'll have to take that on notice.

Senator LEYONHJELM: I anticipated that would be the case. This will almost inevitably be a more complex one again. Of the percentage of equipment that is bespoke, I'd like to know what proportion of it has been delivered on time and what percentage of it was significantly over budget? You can decide what 'significantly' means. Clearly, the air warfare destroyer is an example, but I'm looking at a 25-year pattern here. Is that doable?

Mr Gillis : We can take that on notice. In the shorter term, we do an annual major projects report, which does give you an essence of that data about schedule, budget and their performance et cetera. That's been done since about 2007, so you're looking at about a 10-year data span.

Senator LEYONHJELM: I see. Well, 10 years is better than none.

Mr Gillis : I think that 10 years would make more sense because I know that we've been working closely with the National Audit Office and the major projects report to get that sort of data together. To go back 25 years may be an administrative burden which might take a long time and cost a lot to gather that type of data.

Senator LEYONHJELM: I'll accept that.

Senator FAWCETT: Senator Leyonhjelm, you might wish to refer to both the 2015 joint standing committee report into defence procurement and the 2012 report by this committee. They provide exactly that detail over the time frame you're looking at.

Senator LEYONHJELM: Okay.

CHAIR: The importance of Senate committees.

Senator LEYONHJELM: There you go. I'm looking for the implications in cost and delay of not buying off-the-shelf platforms.

Mr Gillis : I'll make a comment there. There are significant advantages in some cases of being involved in developmental projects—for example, the Bushmaster—and the lives saved in theatre as a result of Australia investing in those types of capabilities. It's not a simple answer to say that one's good and one's bad as a result of scheduling cost because there are implications in respect to capability.

Senator LEYONHJELM: I wasn't intending to imply one's good and one's bad. I'm merely looking at the difference between them. There is a trade off, it would appear.

Mr Gillis : Absolutely.

Senator LEYONHJELM: I don't think anyone will disagree. There is a trade off between buying off the shelf—in terms of cost—and having it designed specifically for our requirements, both in availability and cost.

Mr Gillis : I'll take that on notice.

Vice Adm. Griggs : That's assuming that an off-the-shelf product exists that would meet our requirements, so there's another dimension to this.

Senator Payne: We can put all that together for you.

Senator LEYONHJELM: If you want to send me a copy of the relevant sections of the joint standing committee on defence procurement, then that might do it if it answers the question. I'm not sure about the time scale.

Senator Payne: We'll check on that.

Senator LEYONHJELM: Thank you.

Mr Gillis : The Mortimer review and a number of other reviews of defence procurement have done evaluations of the benefits and risks associated with off-the-shelf procurements verses modified and military off the shelf verses developmental programs, because there's a range that goes forward.

Senator LEYONHJELM: That's my first line of questioning. This is related, but one that is not intended to imply anything about the first series. When is the first French Barracuda class submarine expected to enter service and when is the last one expected to enter service?

Mr Gillis : I'll ask Rear Admiral Greg Sammut, who is the program manager, to answer your questions.

Rear Adm. Sammut : It wasn't clear to me whether you were asking about the French or Australian submarines.

Senator LEYONHJELM: It is the Australian submarines based on the French design.

Rear Adm. Sammut : When will the Future Submarines enter service?

Senator LEYONHJELM: When will the first one enter service and when will the last one enter service?

Rear Adm. Sammut : The early 2030s, in accordance with the white paper and the way our schedules are currently planned, will be the entry of the first submarine. We're aiming for around 2032. We'd expect the last one to enter service in the late 2040s, early 2050s.

Senator LEYONHJELM: What's the scheduled end of life of the Collins submarines?

Rear Adm. Sammut : The end of life of the Collins submarines will be subject to the work that we do on them. We've stated often that it'll be necessary to extend at least one of the Collins class submarines to avoid a capability gap. As we've previously stated at Senate estimates, we've done a number of studies and are confident that we have the ability to extend the life of the Collins submarine. In fact, that work, which has been independently peer reviewed, indicates that there is no single issue that'll prevent us extending the life of the Collins class by one operating cycle each boat.

Senator LEYONHJELM: As a consequence of that, will there be a capability gap? How significant will it be?

Rear Adm. Sammut : There won't be a capability gap.

Senator LEYONHJELM: There will be none at all or some?

CHAIR: I think that was the rear admiral's evidence to your previous question. The assessment had been done. There wouldn't be any capability gap.

Senator LEYONHJELM: Yes, I was just seeking clarification.

Rear Adm. Sammut : There will be no capability gap through the combination of the delivery of the Future Submarine and the extension of the Collins class.

Senator LEYONHJELM: I might leave it there because I'm interested in these questions on notice. I'll pursue them at a future estimates.

Senator McCARTHY: I want to revisit PFAS in the Northern Territory. Minister, I want to go to you before your departmental officers on questions around health. I know you've mentioned in both the Senate and here today that it is up to the health department to determine whether there will be blood testing for residents in Katherine. What conversations have there been between yourself and the federal health minister over the issue?

Senator Payne: I don't intend to go into private conversations between myself and my cabinet colleagues, but suffice to say that the health department is well apprised of the issues around PFAS contamination. As I said, the Deputy Chief Medical Officer, Dr Hobbs, has been of great assistance in being available to communities attending meetings and representing Health in that context. Health, under the then direction of Minister Ley, made the announcements and decisions on the epidemiological study and the commencement of blood testing in Williamtown and Oakey.

Senator McCARTHY: So you will wait for the outcome of the epidemiological study?

Senator Payne: No, the epidemiological study—if I understand it correctly—is a longer-term study, one that is focused on the two communities who currently have the completed human health risk assessments and other risks assessments. I have indicated, and would repeat now, that Defence takes advice on health initiatives related to this these issues from Health.

Senator McCARTHY: This may be for you or your departmental officers. In relation to Airservices Australia's evidence to one of our committees this week—and I know that it was canvassed with Senator Gallacher in terms of the Darwin firefighters and what they're using now—you did reference that the foam that was being used does have trace elements of PFAS.

Mr Grzeskowiak : That is correct.

Senator McCARTHY: Are you confident that those elements are safe?

Mr Grzeskowiak : I think the first point I would make there is that most of the training is now done just with pure water, without using the Ansulite product for training purposes. As I recall from the Airservices Australia evidence, they took a question on notice to provide some data about how often Ansulite is actually used. I'm confident the answer will be: very infrequently. When it is used for training—because we do need to occasionally run some actual product through the fire engines—it's collected and taken away for treatment appropriately. We talk about trace elements of PFOS in the Ansulite. If I was just talking in a casual conversation somewhere, I would say there isn't any, but we do try to stick to scientifically verified information and we know there are very, very tiny amounts—orders of magnitude less than the products that were replaced. PFOS is not put into Ansulite when it's made. We don't know why we're finding trace elements in there. It could be contamination or some form of cross-contamination in the manufacturing process; we don't know. But the amounts we're talking about are minuscule. In a barbecue conversation we'd say there isn't any, but, because we want to stick to the absolute facts and be open and transparent and honest, we say, 'There are trace elements of PFOS, but it's very, very low amounts.'

Senator McCARTHY: Airservices Australia spoke about the constant monitoring of the firefighters in relation to that, and that blood testing was not part of that monitoring. Can you expand on that situation?

Mr Grzeskowiak : It is worth appreciating that Airservices Australia provide firefighting services at two places, Darwin and Townsville, under contract to Defence. Our contract is about them providing the firefighting service. We provide it ourselves at all of the other Defence bases. We have no involvement with or visibility of Airservices Australia and how they deal with their own staff. That's a matter for Airservices Australia. So I'm not able to help with any of those questions that might go to their own interactions with their own people.

Senator McCARTHY: You have helped, thank you. You also spoke earlier about non-litigated claims. One was from Katherine. Are you able to expand on what that non-litigated claim is?

Senator Payne: That wouldn't be appropriate.

Senator McCARTHY: Could you let us know if you've had any other claims from Katherine?

Mr Grzeskowiak : Certainly. To date we just have that one claim from Katherine.

Senator McCARTHY: We're trying to understand the time lines. In terms of Williamtown and Oakey, what were the dates that you were made aware of the concerns there?

Mr Grzeskowiak : Can you clarify the question?

Senator McCARTHY: With PFAS.

Mr Grzeskowiak : In particular, how did you—

Senator McCARTHY: On what date did Defence become aware that PFAS was an issue?

Mr Grzeskowiak : That's a difficult question to answer. We can provide a time line of various interactions or studies that have been done. I guess the date that I would give you would be around December 2011, when we had some testing that indicated that PFAS was in some of the drains on the base.

Senator McCARTHY: What steps were taken to look at our Defence Force sites around the country?

Mr Grzeskowiak : Around that time, we were also looking at Oakey and Williamtown. We were focused on those areas initially. Then, as we began to learn more about this, we started doing a desktop analysis about the other places where these products may have been used. I think it's worth recounting that, even as recently as late 2011 and early 2012, the industry people we were dealing with and the EPAs didn't have the PFAS chemicals high on their agenda of things to worry about. Also, there wasn't an understanding of how these chemicals transport themselves in the environment. We have a much more detailed understanding today as a consequence of the analysis we've done. The environmental management world, be they consultants or regulators, is very much used to dealing with what you would call more traditional types of chemicals—hydrocarbons, solvents and the like—that you get from industrial properties. They don't tend to transport themselves very far.

Senator McCARTHY: When did you consider Katherine and Darwin as places you needed to look at?

Mr Grzeskowiak : That would have been as a result of our desktop analysis looking at the sites where these chemicals would've been used.

Senator McCARTHY: What year was that? Would you like to that on notice?

Mr Grzeskowiak : To be sure, I'd have to come back on that, yes.

Mr Birrer : What we did do in 2016 is, as a result of that desktop analysis, we undertook a preliminary sampling program—

Senator McCARTHY: So the desktop analysis was in 2016?

Mr Birrer : No, no. As a result of the desktop analysis in 2016, we undertook a preliminary sampling program at 12 properties around Australia. What that preliminary sampling program did was provide us with information about PFAS and whether or not there were viable pathways for PFAS to migrate from our bases into the environment. As a result of that preliminary sampling program—and we released that report that we received from the consultant in November 2016—we're now undertaking the detailed environmental investigations.

Senator McCARTHY: So between 2012 and 2016, there was no notification to Katherine or Darwin in terms of this issue?

Mr Grzeskowiak : No, because I think the desktop analysis would have been undertaken in around 2015. But we'll come back with the dates of when we did that work. The focus at that time was very much on Williamtown and Oakey.

Mr Birrer : It might be worthwhile making the point too that in the early 2000s—Mr Grzeskowiak mentioned the change of product, and that was due to information that we received about the persistence of these chemicals in the environment and in people. It was in that event in 2012 at Williamtown where, I think it's fair to say, Defence started to really become aware of the transportability of the chemicals in terms of their ability to migrate from our bases into the community. Like what Mr Grzeskowiak said just before, many of the contaminants we deal with are very static—they stay quite close or travel only a few hundred metres from the source areas. But due to the transportability of PFAS and its ability to be carried by water, it could travel further distances.

Senator McCARTHY: I guess what I'm trying to understand here, Mr Birrer, is what steps were taken to communicate that concern—or even a red flag or a red light—that you identified in 2012 to places like Katherine and Darwin, and that this could be something you would need to consider? Was there any attempt to inform—

Mr Grzeskowiak : At that time, we did not take steps to talk to communities other than places like Oakey.

Senator McCARTHY: Why was that?

Mr Grzeskowiak : We didn't understand the full nature of this problem. This has been a learning process for us. We are constantly contacted by people from Europe and America asking how we're going because we're ahead of them in trying to understand this problem. I think, as I've said before, if we knew back in 2012 what we know today, we would have responded differently. But hindsight is a marvellous thing. We didn't fully comprehend the potential for these chemicals to move as far as they have at that time. Remember also that—

Senator McCARTHY: So has there been an error here in that?

Mr Grzeskowiak : I think decisions were made with the knowledge of the day. Remember that at that time in 2012, there were no standards that regulated these chemicals. In fact, the health based guidance values that we now have for drinking water and recreational water were only announced on 3 April this year. No food regulatory body in the world has made any regulation for the amounts of these chemicals that could be allowable in food, because they do not see a need to do that. The Department of Health, as advised by the Environmental Health Standing Committee, which is the peak body in Australia for health matters—it includes the chief medical officers from federal and state, all the federal and state authorities—continue to advise that there is no consistent evidence that exposure to these chemicals causes any adverse human health effects in people. But, as a precaution—because we know they last a long time, we know they have the ability to bioaccumulate through a food chain—exposure should be limited. That's why we take a precautionary approach. That's why we provide drinking water to people whose only source of water is or could be contaminated—bore water—above health based guidance values.

Senator McCARTHY: Defence wrote to Oakey residents in 2014. When did you write to the Katherine residents?

Mr Grzeskowiak : The issue was publicly put out in connection with the preliminary site investigation. The first engagement would have been, I think, in late 2016—we'll just check that one.

Mr Birrer : The first community engagement in Katherine was on 23 November 2016.

Senator McCARTHY: So that was a public meeting, not letters to residents—is that correct?

Mr Grzeskowiak : That was a public meeting. I don't think we've done letters to all the residents of Katherine—I'd need to check that—but we've had several community engagement sessions. We've done, obviously, media up in Katherine, trying to make people as aware as possible of what we are doing. That's how we introduce ourselves to the people who are reliant on bores and why we're providing water to those 53 properties that I mentioned earlier. For those people, we are now funding rainwater tanks, which will be delivered before the end of the year so that they're there for the wet season. That gives those people a clean water supply that will be an enduring solution for them.

Senator McCARTHY: You may want to take this on notice—the differences, please, on your testing regime for the dry season, and your testing regime for the wet season?

Mr Grzeskowiak : Our consultants, who are doing the work, think, for completeness, we should do sampling of both ground and surface water at the different times of the year—in particular because of the nature of the wet and dry issue up there. So we've got a range of samples at the moment. We did take some samples during the latter half of the last wet season. We've done a lot of sampling through the dry season, and there'll be more sampling as the wet season comes around again. That was recommended by our environmental consultants, and it seems like the right thing to do just so that we really understand whether there is any difference, or what the differences are, in the level of PFAS in either bore, river or town water.

Senator McCARTHY: Finally, the Katherine residents would certainly like a one-stop shop. Minister, is there a chance where information—a place where they can go to actually find out everything they need to know in relation to what they should be doing, and what they need to know around this issue?

Senator Payne: I understand Senator Scullion from a PM&C perspective has indicated that it is possible to pursue that kind of approach, and that is being considered at the moment, yes.

Senator McCARTHY: Thank you.

Senator Payne: I have one thing I think it's useful to note for the record, if I may, Chair, briefly. When Defence extended so significantly the investigation program to the number of sites that we've been talking about today, at the beginning of the process, my recollection is—and I stand to be corrected by the deputy secretary—that there were only two laboratories in Australia at the time that were capable of actually doing the investigative and testing work and that were accredited at the appropriate environmental and professional levels. We are now investigating, and potentially testing, across 23 sites here, which is a very, very considerable amount of work. When we talk about testing, we mean multiples of thousands of items and tests being made at each of these sites. Defence has worked very hard to encourage the sector to develop the capacity to support this process. Mr Grzeskowiak is correct when he says that in international terms Australia has been much more proactive in the work that has been done here in the last couple of years than literally anywhere else in the world. We are consulting internationally—consulting in Europe, consulting in the United States—and working with those counterparts on the work that we are doing. As we roll this out, we are very cognisant of the importance of this to communities. We understand that it is a very difficult circumstance and environment in which to live. I do not underestimate that for a moment, Senator McCarthy—not for a moment. We are working closely with our counterparts in Health and in Environment and other agencies to provide the most information we can and to have this work completed as quickly as we can across all of these sites.

Senator GALLACHER: Will the minister confirm that Defence will comply with the model litigant protocol of the Commonwealth in respect to class actions and actions that might arise as a result of PFAS/PFOA contamination?

Senator Payne: Yes.

Senator KITCHING: I did have a quick look at the New South Wales EPA report and I wondered if either the EPA or Defence had compared other areas, not on bases—really, I'm asking about whether the EPA does any sort of testing of other sites. I'm thinking of sites in my home state of Victoria where there might have been bushfires.

Senator Payne: You'd be familiar with the Fiskville area?

Senator KITCHING: Yes.

Senator Payne: Are you aware of the very significant Victorian parliamentary inquiry into Fiskville?

Senator KITCHING: Yes, I am, but what I'm really asking is: where PFAS has been used on other sites, have the EPAs in the relevant states done any testing in comparison with that? I'm not aware of any suggestion that in an area where they have a tendency to have bushfires there be buyback of those areas—but I'm not sure.

Senator Payne: It is a matter for them, Senator. It's not a matter for Defence.

Senator KITCHING: No, but I'm wondering did the EPAs do that?

Senator Payne: That's a matter for the EPAs.

Senator KITCHING: But they didn't compare—

Senator Payne: We have enough of a task in front of us doing what we are doing.

Senator KITCHING: But I'm suggesting that the remedies that are being suggested here aren't really applied to other sites.

Senator Payne: That's a matter for them.

Senator ROBERTS: I would like to follow on with the Oakey contamination. What's the full nature of the problem now?

Mr Grzeskowiak : The Army Aviation Centre at Oakey was the first place where we first really started to grapple with this problem. There is PFAS contamination from historical use, and we have a good map of where it is. It has gone into an underground aquifer. It probably runs something in the order of four kilometres underground away from the base. It is also in some surface water drains that run through various routes. There's a detailed map showing that. All that information is publicly available and has been briefed into the community. We've been providing clean bottled water to a range of properties—43 properties at the moment—at Oakey.

Senator ROBERTS: Are they in the town?

Mr Grzeskowiak : No, and I should make it quite clear that the town water in Oakey has no PFAS in it. It comes from sources which are not contaminated. The people who are potentially most exposed are those people who've been drinking bore water. We're providing clean water to 43 of those people. We're also working with Toowoomba Regional Council to have as many of those properties as can be connected to town water connected to town water. That project is ongoing. I think we're paying around $3. 7 million to Toowoomba council. They are then managing the contract to put in place those water connections. That's ongoing.

Senator ROBERTS: The physical work has started on that?

Mr Grzeskowiak : I'm not sure that it's actually started. I know that there is a contract in place. It's either started or it's about to start. I'm just not sure exactly where that's up to.

Senator ROBERTS: Would it be possible to find out?

Mr Grzeskowiak : Yes, we can find that out, possibly in the next three minutes.

Mr Birrer : It is in the zone, Senator. In August, the Toowoomba Regional Council let a contract to one of their contractors to undertake both the design and the construction of the mains extension and the water connections.

Senator ROBERTS: Does that take care of everyone whose in the contaminated zone?

Mr Grzeskowiak : We'll know that when the design is concluded. There are some issues.

Senator ROBERTS: Fair enough.

Mr Grzeskowiak : One or two properties are quite a long way from the town and, therefore, getting a connection out there might be difficult. There are all sorts of rules about how much water must be drawn off a system for a long, extended pipeline. Obviously, the construction hasn't started yet, but a contract has been let for design. Again, Defence is funding that. That's ongoing. We've been providing community support in the Oakey area and there are some community groups that are also—

Senator ROBERTS: What does that look like—community support?

Mr Grzeskowiak : It's liaison officers from the Department of Human Services to make sure people know how to access any services that may be available: counselling services, mental health services. We've also been assisting a community based group which is trying to run community activities to give people things to do other than worrying about what the effects of PFAS might be. So that's all going on. We've also started to decontaminate the site at Oakey. We've started a process at Williamtown, scooping away the top 200 millimetres of soil from some of the drains on the base, because—

Senator ROBERTS: Is that based on any tests, empirical evidence, as to—

Mr Grzeskowiak : Yes, it's all based on the analysis that's been done in terms of the environmental investigation. There's the surface soil in the drains. For decades, water has been running through there that will have contained PFAS and some of will have attached itself to the soil and some will have gone on, so it becomes an elevated source, if you like, of material containing PFAS. Clearing that away and storing it on base in a way in which it can't leach into the ground is being done. Also, we're installing a water treatment plant, similar to the water treatment plants that we've got at Katherine and at Williamtown. It has started treating water. Again, it's an aquifer issue, but we're looking at, if you like, hotspots on the base around where the firefighting training areas may have been. We can treat water that's at higher concentrations in what otherwise would still be a source of—

Senator ROBERTS: That's water coming off firefighting—

Mr Grzeskowiak : That's water underground that we're treating.

Mr Birrer : Senator, it's worth looking at the website. We released an environmental site assessment for Oakey last year, and it's on the website with some maps. The hydrology of Oakey is that the surface drains that Mr Grzeskowiak mentioned that flow to the south of the base are quite a key route for the contaminant, and there is also an aquifer where the groundwater can be contaminated. It is from the legacy firefighting foam, not the current firefighting operations. But, if you look at that map, it will show the importance of those drains in terms of moving PFAS in surface water off the base and also our understanding of the plume in the groundwater, in the aquifer.

Senator ROBERTS: Do you know how far the water goes on the surface when it drains away?

Mr Birrer : We do. That's on those maps, Senator.

Senator ROBERTS: Is there any other contamination apart from the groundwater—any animal—

Mr Grzeskowiak : The pathways for potential contamination is one of the things that is looked at in detail as part of the human health risk assessment and the ecological site assessment. The pathway that is most prevalent is from drinking water that's contaminated. We know there are some properties—

Senator ROBERTS: Does the body act as a filter and trap that PFAS?

Mr Grzeskowiak : The human body bioaccumulates PFAS. The human body has the ability to process and excrete PFAS but, depending on the amount that might be taken in, there can be a bioaccumulation effect. If you stop adding PFAS to the human body, over time, it does get rid of it. What we've found from some of the studies we're doing, which are looking at, for example, vegetables and chickens—we're actually growing various vegetables in controlled environments, watering them with water that contains PFAS, using soil and water from Oakey and Williamtown to see what types of products uptake PFAS into the vegetable or fruit.

For example, although I haven't seen the final report, the work with chooks is interesting in that part of the precautionary advice we've been giving in a place like Oakey is, 'You can't eat the eggs from chooks, if they've been drinking water that had PFAS in it.' But what we found is, if you take a chook and fed it freshwater for a couple of weeks, there's no PFAS left in the chook. That animal, obviously, has the ability to excrete PFAS very quickly. A human takes longer.

Senator Payne: What about fish?

Mr Grzeskowiak : And some fish as well. It's different in every living thing. The science is still evolving. The work we're doing is contributing to the global knowledge about these things. As we get the results, we'll brief them back into the community. So, for example, if you're living on a piece of land where you're using bore water that might have PFAS in it and you're still using that to water the chooks, it may well be that you just have to put them on fresh water for a couple of weeks and then they're completely clear.

Senator ROBERTS: I heard that a cow has been contaminated. Is that correct?

Mr Grzeskowiak : We've taken a range of samples of serum from cattle and we have found PFAS in some of them. We've talked a lot to the agriculture people about what that means. We have advice, extant in Oakey and Williamtown, to people that says, 'If you've got produce that you're growing to eat and it's been fed contaminated water, then our advice is it shouldn't be eaten by the grower' But the advice from agriculture—and they'd be better qualified to answer the question than me—is that PFAS in produce that might be sold into the general food chain is not a problem. The reason it's not a problem is that it essentially gets dispersed widely into the food chain. The potential problem might be if somebody slaughters a cow that might have levels of PFAS in the meat and then just eats it every day of the week for the next year until there's none left. That individual might accumulate a level of PFAS higher than the tolerable daily intakes that have been published. But, when dispersed in the general food chain, that's not a problem. That's part of the reason why the Food Standards Australia New Zealand people have made the decision that there is no need to regulate PFAS in food for that very reason. And, as I said earlier, no regulatory body, globally, has felt the need to regulate PFAS levels in food.

Senator ROBERTS: Not at all?

Mr Grzeskowiak : No. No-one globally has done that.

Senator ROBERTS: What are the impacts so far on people? Have you measured any impacts on people?

Mr Grzeskowiak : No.

Senator ROBERTS: Anxiety—that'd be there?

Mr Grzeskowiak : The health advice is that there's no consistent evidence that it produces any adverse health effects at all. But we are, of course, very aware, as the minister alluded to earlier, that probably worrying about this and the uncertainty around it could, potentially, cause people to have stress-related problems. But, in terms of a physical health problem, the global evidence, as reviewed by FSANZ late last year in a very extensive review—which led to them setting health based guidance values for drinking water, recreational use waters and tolerable daily intakes—led them to reinforce the health advice that there's no consistent evidence that exposure to these chemicals causes any human effect at all.

Mr Birrer : Recognition of the anxiety and concern it causes communities is the basis of why we have engaged our colleagues in the Department of Human Services to work with local communities to help people to access mental health and other health and wellbeing programs. We are also funding community wellbeing programs in these communities, including in Oakey, where there is a very active community wellbeing program that's under way. That's driven by the community members themselves engaging in these activities and shaping these activities; they are not ones we come up with.

Senator ROBERTS: I understand there were a number of issues raised with the Department of Defence over the years that people perceive have not been addressed, so pardon me for being a little sceptical about your comments. I do accept them for now but I will raise later on meflicon. People in the defence forces have been told that there is not a problem there but that is not what they're saying to us.

Senator Payne: That's an issue for a different part of the department.

Senator ROBERTS: Exactly. I am saying, Minister, while I accept Mr Grzeskowiak's sincerity, I don't think the community yet accepts the Department of Defence's sincerity.

Senator Payne: I appreciate the point that you make. Mr Grzeskowiak and Mr Birrer have significant expertise and awareness of the matters concerning PFAS, but I am not going to ask them to respond to meflicon as well.

Senator ROBERTS: No, I'm not asking for a response, Minister.

CHAIR: That's exhausted the committee's questions on PFAS. We'll move to another topic.

Senator WHISH-WILSON: One of the outcomes for program 1.1 was operations contributing to the safety of the immediate neighbourhood and an outcome for 1.2 is operations supporting wider interests. My question is relating to the situation on the Korean Peninsula around North Korea, which I'm surprised hasn't been discussed here yet today. More broadly, Vice Admiral, I understand we have an alliance with the US at the moment.

Vice Adm. Griggs : We've had it for quite a while.

Senator WHISH-WILSON: Since the sixties, yes. What has been our involvement with planning for contingencies on the Korean Peninsula in light of our alliance with the US?

Vice Adm. Griggs : We plan for contingencies all the time. As you know, that's what we do.

Senator WHISH-WILSON: I presume you do.

Vice Adm. Griggs : And we don't discuss operational contingencies.

Senator WHISH-WILSON: What's the strategy in relation to the Korean Peninsula? Why is Australia potentially involved?

Vice Adm. Griggs : I think the Prime Minister, the defence minister and the foreign minister have all, at length and in some detail, over the last couple of months, been out on the public record about Australia's strategy in relation to North Korea.

Senator WHISH-WILSON: I'm asking you today, Vice Admiral: what is the strategy in relation to—

Vice Adm. Griggs : The government's position on the issue of North Korea is abundantly clear to everybody.

Senator Payne: I'm very happy to repeat it if you wish.

Senator WHISH-WILSON: For example, it has been speculated that, because of our role with the US alliance, we may provide submarines for surveillance or communications, or there may be Australian aircraft involved in any operations there. Can you confirm that these are active discussions?

Senator Payne: I don't engage in any speculation on Defence operational matters.

Senator WHISH-WILSON: So are you saying there have been no discussions with our US alliance partner on Australian involvement with the US alliance?

Senator Payne: I met Secretary Mattis as recently as yesterday. We discussed a wide range of security and strategic matters relevant to our region and more broadly; however, I don't intend to go into the detail of those discussions.

Senator WHISH-WILSON: Can you tell us what you think the US strategy for North Korea is?

Senator Payne: I have discussed this matter with both Secretary Tillerson and Secretary Mattis. Secretary Mattis and I were both in the Philippines at Clarke yesterday. They have made it very clear that their most preferred outcome is to deter North Korea from their current behaviour, which is both illegal and provocative, which is in breach of international law and UN Security Council resolutions, and which is in breach of a number of proliferation security initiatives as well. They hope to deter them from that path by the application of the greatest pressure possible through the strongest sanctions regime that the UN Security Council and its supporting members, and individual nations, are able to achieve. The Security Council has made a series of resolutions in relation to sanctions in recent months, all of which have been strongly supported by Australia. We have encouraged and advocated other members of the international community to pursue those as well. We have also, through the work of the foreign affairs minister, developed and applied a number of autonomous sanctions in relation to both individuals and entities—to, I think, 31 entities and 37 individuals—which are also designed to put pressure on the regime and show it the error of its ways in terms of regional security and in terms of international security. That continues to be our approach. We joined, or I joined—

Senator WHISH-WILSON: When you say 'we', do you mean just Australia or Australia within the alliance?

Senator Payne: When I said 'we', I was about to say that I joined with 17 other defence ministers at the ASEAN Defence Ministers Meeting-Plus yesterday at Clark in the Philippines in pursuing and discussing those issues and prosecuting that case. It is fair to say that there are other countries in the world and in the region who are not applying the sanctions regime in the same way that Australia is. We continue dialogue with those nations. We continue dialogue with our counterparts to encourage them to do that. The defence ministers of Korea, Minister Song, and of Japan, Minister Onodera, both spoke at the ASEAN Defence Ministers Meeting-Plus yesterday on exactly those issues and the importance of continuing to apply the strongest possible pressure on the regime.

Senator WHISH-WILSON: You used the word 'deter'. Does deter include the use of provocative and inflammatory language provoking North Korea, like we've seen from the US President?

Senator Payne: You can characterise it in that way if you wish.

Senator WHISH-WILSON: I'm not the only one; I'm sure you're aware of that.

Senator Payne: No, and I'm not going to speak to everybody's characterisation of someone else's language, frankly. I am more than happy to speak in relation to the positions that Australia has taken and I'm very happy to continue to articulate those.

Senator WHISH-WILSON: I'm asking you because we have an alliance partner in the US, and the head of that country has been escalating the rhetoric around North Korea. Have you not been concerned, and have you expressed concerns to the US about the escalation in rhetoric?

Senator Payne: I have had, as I said, quite extensive discussions with Secretary Mattis—not just yesterday but we met in Washington about a month ago. We met in Sydney in June at the Australia-US ministerial annual talks, where we discussed—with Secretary Tillerson also on that occasion—the behaviour of the regime. There was a very interesting editorial in The Wall Street Journal, if I remember correctly, co-authored by Secretary Tillerson and Secretary Mattis about the importance of strategic pressure and about the application of that pressure.

Senator WHISH-WILSON: Does that include the kind of language we've seen from the US President?

Senator Payne: Well, the President speaks in the terms that he chooses.

Senator WHISH-WILSON: I'm well aware of that, and so is the rest of the world. Do you find that useful or potentially counterproductive? The reason I'm asking is that we have an alliance partner and we may be expected—you won't comment on it, but we may be expected—to contribute to any contingency on the Korean Peninsula. Don't you think it's your duty on behalf of Australians to be putting these questions, privately if necessary, to our US alliance partners and suggesting that that kind of language is only going to make matters worse or potentially make matters worse?

Senator Payne: It occurs to me that what you and I think about my duty may differ somewhat, but, in terms of how messaging is calibrated and in terms of private discussions, I will continue to have those, as will the foreign affairs minister and the Prime Minister, and we will continue to maintain the strongest possible public support and advocacy for the application of the greatest pressure through the sanctions process.

Senator WHISH-WILSON: Could you confirm whether the possibility of a pre-emptive strike is something that you have had discussions with our US partners about?

Senator Payne: I think I've already indicated quite clearly that I'm not going to discuss those sorts of issues.

Senator WHISH-WILSON: Is it an option that's on the table?

Senator Payne: I've indicated quite clearly I'm not going to discuss those sorts of issues. What the United States have said is that, given the threat that is conveyed by the regime, all options remain on the table. They have said that on more than one occasion.

Senator WHISH-WILSON: I'll assume that it does remain on the table. I have a couple of questions on another matter. Minister Pyne said in July he 'wants Australia to become a major arms exporter on par with Britain, France and Germany'. I understand the prospect of maximising Australia's defence exports has been raised previously—for example, in the Defence industry policy statement released last year. Has your department been involved in the development of a plan or a strategy around Australia becoming a major arms exporter?

Senator Payne: When I released the Defence industry policy statement last year with the Prime Minister in conjunction with the defence white paper, we made a number of things very clear. Some of those concern the acquisition of key platforms for Australia, and we've discussed that in some detail this morning, particularly concerning Future Submarines. What we also indicated was that we would make defence industry a fundamental input to capability in Australia, to recognise its importance and to change the way Defence did business with defence industry to enable them to grow and to thrive, in both the Australian context and the international context. That, by its very definition, includes the development of active export engagement. I will ask Deputy Secretary Rebecca Skinner from Strategic Policy and Intelligence to elaborate on that.

Ms Skinner : We are working on an export strategy for release towards the end of the year. That will support, as the minister has said, developing an industrial base supporting fundamental inputs to capability for our own military capability and providing an opportunity for export.

Senator WHISH-WILSON: Will that include beefing up safeguards around military exports?

Ms Skinner : We already have a very, very strong regime around our export control. Our export policy area, in terms of promoting exports, resides in the same part of the department as our regulatory function. We work those together. We are part of four international regimes that support export controls, particularly about limiting things like the proliferation of weapons of mass destruction.

Senator WHISH-WILSON: I understand you do have a policy, and they're assessed against five criteria: international obligations, national security, human rights, regional security and foreign policy.

Ms Skinner : Yes.

Senator WHISH-WILSON: You're comfortable that those safeguards are adequate and transparent? I'm particularly interested in relation to Saudi Arabia and the United Arab Emirates. Are you concerned that we are potentially going to export military material to countries that have been accused of committing war crimes?

Ms Skinner : I answered a range of questions at the last estimates along those lines. My testimony has not changed. As you say, we have five criteria—

Senator WHISH-WILSON: Unfortunately my colleague is no longer with us.

Ms Skinner : We have five criteria that you have already mentioned. Each of our exports is managed on a case-by-case basis. As we've discussed previously, that also includes other government departments participating in the consultative process in order to give advice on some of those elements, and we make a judgement on the exports. In many cases exports are approved and occasionally exports aren't.

Senator WHISH-WILSON: On that basis, has there been an update since the last estimates? Have there been any more exports approved in recent months?

Ms Skinner : Yes, there have been a range of exports approved, of course. We deal with around 4½ thousand export applications every year. But if you are—

Senator WHISH-WILSON: To Saudi Arabia in particular.

Ms Skinner : There have been five exports of equipment—or export permits issued—to Saudi Arabia since the last estimates.

Senator WHISH-WILSON: Can you tell us what they are?

Ms Skinner : We don't disclose the particular types of equipment, mainly from a commercial-in-confidence perspective, to protect those businesses.

Senator WHISH-WILSON: Has the department assessed whether any previously supplied Australian equipment has been used by the Saudi-led coalition in unlawful attacks on Yemen?

Ms Skinner : We are unaware of any equipment or things they have received—export permits—being used in such a way.

Senator WHISH-WILSON: Unaware is different to having assessed that, Ms Skinner. Have you actually assessed it?

Ms Skinner : We would have issued the permit on the basis of the information available to us at the time. Those criteria remain in place. Our teams are continually assessing the environment into which our exports are made. If there was a change in our assessment in that way, or a concern around a particular export, that would be dealt with.

Senator WHISH-WILSON: I did have other questions on this but I notice Senator Gallacher has given me a transcript. What kind of process would you go through to get assurances that Australian equipment wouldn't be used, and at what point would you consider something like an arms embargo to Saudi Arabia unless they cease their unlawful—

Ms Skinner : Consideration of something like an arms embargo would be a matter for the Department of Foreign Affairs and it would usually be on the basis of something involving a UN type sanctions activity.

CHAIR: So maybe you could come back tomorrow and ask those questions.

Senator WHISH-WILSON: I certainly will if that's what you'd like, Chair. Have I got more time?

CHAIR: The officers said it would be the more appropriate place for those questions to be asked.

Senator WHISH-WILSON: Ms Skinner, presumably the Department of Foreign Affairs would work with you on making those kinds of assessments?

Ms Skinner : We would provide advice, as we do in a whole range of matters with our colleagues in the Department of Foreign Affairs. But they have the lead for things like sanctions and embargoes.

Senator WHISH-WILSON: Are they also involved with the criteria against which you assess your exports?

Ms Skinner : Yes. They in particular support us with their assessments on things like human rights abuses.

Senator WHISH-WILSON: Okay, I'll check with them on that.

CHAIR: We'll see you tomorrow.

Senator WHISH-WILSON: Do I have more time?

CHAIR: About three minutes.

Senator WHISH-WILSON: I have put most of my questions on notice. I understand you've already been asked some questions about the Philippines and Myanmar and also Iraq and the Kurds. I have one specific question regarding the recent Kurdish independence referendum in Iraq. Iraqi forces have now seized control of the city of Kirkuk. President Trump has said he is not taking sides in this issue. Is Australia also not taking sides, and how do these developments affect our coalition strategy in Iraq?

Senator Payne: We're certainly not taking sides, Senator. These are matters which are being worked out in the processes in Iraq. Our focus is on the work that we are doing through the special operations task group at Taji, which is supporting the CTS, and the work of the air task group more broadly. In all of our discussions with the Iraqi government we have urged a constructive and reasonable approach to their internal issues and we continue to work with the global coalition, the international counter-ISIL coalition, in our efforts.

Senator WHISH-WILSON: They are both our allies in the fight against ISIS. How does this complicate factors on the ground, Minister?

Senator Payne: In operational terms do you mean?

Senator WHISH-WILSON: Yes. Does it distract away from their focus on that objective and, therefore, make our—

Senator Payne: They are very focused on the objective of prosecuting the fight against Daesh. That is evidenced by the achievements in Mosul, Tal Afar and Hawija and in the work they are coming back to do, with our support in terms of training and the CTS, in the middle Euphrates Valley area as well. That continues to be an abiding focus. They know, we know and the members of the international coalition know that the prosecution of the effort against Daesh does not bear distraction—and we are very focused on that.

Senator WHISH-WILSON: Of course. Would the situation arise where potentially we are operating in an area with both of those groups, and how would we provide support?

Senator Payne: I am not sure it is necessarily helpful to engage in that speculation as such. But we obviously would work with our counterparts and other members of the coalition to make appropriate arrangements of deconfliction and appropriate engagement. If the acting CDF wishes to add anything, I invite him to do so.

Vice Adm. Griggs : I think the minister has covered it pretty well.

Senator PRATT: I can see from the budget papers the line items under the defence cooperation program where Australia provides military aid to Myanmar. Can you explain what this aid is made up of?

Mr Dewar : We've allocated around $398,000 to defence cooperation with Myanmar. Key areas are humanitarian assistance and disaster relief, peacekeeping training and English-language training.

Senator PRATT: So Australia does conduct training in peacekeeping duties. What is involved in that? Is this training ongoing and how does the Australian government make a judgement about whether the actions of the Myanmar military are currently consistent with the actions of a peacekeeping force?

Mr Dewar : The training we've provided has been here in Canberra. We've had a UN peace operations course that we've had Myanmar officers participate in, a peace operations seminar. We've also had law of peace operations, rules of engagement workshop, humanitarian operations seminar, and a gender and protection workshop. Most of these are not specifically for Myanmar; they're courses we run for a range of countries. They have sent usually it's been two officers to those courses.

Senator PRATT: So this training is ongoing. Would you expect Myanmar would be eligible on an ongoing basis to participate in such activities or is this currently being reviewed?

Mr Dewar : The current government policy is that we're maintaining our defence cooperation with Myanmar in those areas that I mentioned—humanitarian assistance, disaster relief, English-language training and peacekeeping.

Ms Skinner : I could add that part of the intention of the training, too, is to assist their forces to modernise, be professional and highlight the importance of adhering to international humanitarian law. So it's a training and capacity building in that sense.

Senator PRATT: Whether Myanmar conducts itself in accordance with that training, clearly that's the purpose of the training, but the UK government has suspended its military aid to Myanmar, and overnight there are reports that the US government is suspending its aid. Is the government still not reflecting on its position?

Mr Dewar : The government has called for an end to the security operations and has been watching what's going on in Rakhine state very closely. We've called for protection of civilians in accordance with international humanitarian law. We want to see a ceasefire and allow humanitarian assistance to get through. We've made those calls both publicly and—it's a matter perhaps more for DFAT tomorrow—through diplomatic channels as well. That's the way the government is calling on Myanmar to deal with that issue.

Senator PRATT: Would it be apparent to the Australian government that the activities of the Myanmar military are inconsistent with the values and procedures provided in the training that Australia has given to Myanmar?

Mr Dewar : The government's been deeply concerned by that violence. I understand—once again it's a question perhaps for DFAT colleagues tomorrow—there are a number of proposals for international investigations into what's gone on, and those investigations should be conducted so that the international community understands clearly what's gone on.

Senator PRATT: Would Australian Defence reflect on the deliberations taking place within DFAT as to whether its position on providing military aid would change?

Mr Dewar : Yes, of course. We engage with DFAT constantly on these issues and are in a constant dialogue with them, not just on Myanmar but on our engagement with countries all of the time.

Senator PRATT: If there's an increasing appetite for the kinds of measures that we've seen in terms of the suspension of military aid coming from other countries, that would clearly have more weight if there were more countries participating in it. What is the basis of the decision to maintain that program on an ongoing basis? I can understand that that engagement might be seen as a positive way of influencing, but there are other experts that are saying that it's legitimising their forces.

Mr Dewar : I think we recognise—as you said, the UK has taken a position. We are, as I said, talking to DFAT in terms of the overall relationship with Myanmar, but at this stage the government approach is that we continue to engage with Myanmar and use those channels to make Australian positions known.

Senator PRATT: Do we consider ourselves an outlier, relative to the actions of other states on this matter?

Mr Dewar : No.

Ms Skinner : I think, at this point, Senator, the point that you made about engagement and assisting a country that's on a journey from where it has been isolated, to help with capacity building is an approach that is reasonable, and we are continuing to monitor that, as Mr Dewar has said.

Senator PRATT: Yes, but this does seem to be a large backward step in the journey of that development, in terms of what's happening with the Rohingya.

Senator GALLACHER: I just want to finish off one very sensitive area, with some questions about the ADF Inspector General's investigation into the conduct of special forces in operations. I can certainly speak for the committee and most of the Australian public as to the high regard that our special services soldiers are held in. I just want to get some understanding of the scope of this investigation.

Lt Gen. Campbell : I would like to start by noting that this is a scoping inquiry being undertaken by the Inspector General of the Australian Defence Force. The Inspector General and his organisation are independent from the chain of command. Around March of 2016, I referred to him concerns that I had of rumours and hearsay, stories and conversations which reflected poorly upon some possible actions and service of our personnel in Afghanistan. There were enough of these commentaries circulating around to be of concern to me and to wish me to seek an independent and comprehensive view of what is substantive and what is just potentially bravado. So I referred it to the Inspector General, specifically so that it would be separate from the chain of command and would allow a period for the Inspector General to reflect, engage with our personnel, come to understand the issues at play and draw some conclusions. As to what the Inspector General does, in what way he chooses to report and any form of conclusions or recommendations or findings, they are all the Inspector General's to be considered. I also did not offer any specification of a time frame in which this was to be done. It is completely independent. With changes to the Defence Act late in 2016, the initiating authority transferred from myself to the Chief of the Defence Force. That's just a little bit of background administration. That has no effect on the continuing work of the Inspector General and his team.

Senator GALLACHER: Did I get it right—that this is Afghanistan only? Does it include other areas of operation—Iraq, Timor Leste, Solomons?

Lt Gen. Campbell : No, I understand it to be focused on Afghanistan. Again, I would say the Inspector General is the authority.

Senator GALLACHER: He's not constrained. If he determines that the scoping takes him elsewhere, then that's his decision.

Lt Gen. Campbell : Yes, I'd characterise it as he may choose or not to use constraints.

Senator GALLACHER: The ADF does not have any control over the scope of it; it's stand-alone?

Lt Gen. Campbell : The referral was with regard to Afghanistan.

Senator GALLACHER: I suppose these are difficult questions. Is there a time line in play here? Is there any agreed proposal?

Lt Gen. Campbell : Not from my perspective to the Inspector General. Once the request was handed over and accepted, it is the Inspector General's.

Senator GALLACHER: Does the ADF investigation service become involved?

Lt Gen. Campbell : Depending on what the Inspector General concludes from this work, there may be the potential for the engagement of other authorities, but I don't assume that.

Senator GALLACHER: But it's not limited to the ADF investigation services. Other authorities may be involved?

Lt Gen. Campbell : Potentially.

Senator GALLACHER: Would the Inspector General have a team of people?

Lt Gen. Campbell : He does. It's led by Major General Paul Brereton, a senior reserve officer, legal officer and also a Justice on the Supreme Court of New South Wales.

Senator GALLACHER: Would it be five people or 10 people?

Lt Gen. Campbell : I don't know, Senator. I would have to take it on notice for the Inspector General to reply, if you wish.

Senator GALLACHER: I suppose there wouldn't be any particular problem with identifying whether it was five or ten people.

Lt Gen. Campbell : I'll take that on notice for you, Senator.

Senator GALLACHER: Was a request for relevant information sent out a few months ago? In your opening statement you touched on the fact that there's rumours, there's innuendo and there's relevant information. How is that coming along or is it stand-alone?

Lt Gen. Campbell : I believe you're referring to the public advertisement inviting persons to speak to the inquiry, which was initiated around 1 September 2017. Yes, you are quite right—anything to do with the scoping inquiry being undertaken is a matter for the Inspector General. I do not know, and do not wish to know, the answers to any of those questions until he presents his report to the Chief of the Defence Force.

Senator GALLACHER: We have a justice of the Supreme Court of New South Wales controlling—

Lt Gen. Campbell : He is acting as a major general of the Australian Army Reserve.

Senator GALLACHER: Will they sift through whatever relevant information comes through? If there were findings of illegal behaviour, would that be up to this brigadier general?

Lt Gen. Campbell : To Major General Brereton. I can't speculate; I don't know. It is for him, and it must never be perceived as in any way being influenced by the chain of command.

Senator GALLACHER: Any other agencies or organisations would be the result of the Inspector General's decisions?

Lt Gen. Campbell : Presumably.

Senator KITCHING: I'm looking at the entitlements handbook, which says that:

Defence will be responsible to the Minister for Defence for compiling the Schedule of Special Purpose Flights for tabling in Parliament in June (for the six months ending the previous 31 December) and December (for the six months ending the previous 30 June) each year. This schedule will list all legs flown, passengers carried and hours and costings.

I understand the report for the period ending 31 December 2016 is therefore overdue. Where is it and when can we expect it?

Vice Adm. Griggs : We will get the Chief of the Air Force up. He loves talking about special purpose aircraft.

Air Marshal Davies : The schedule for 1 July to 31 December 2016 will be the next tabled, and that should be before the end of this sitting period.

Senator KITCHING: It should have been tabled in June—is that right?

Air Marshal Davies : No, that's the next reporting period.

Senator KITCHING: Okay. But it is late?

Air Marshal Davies : The last period was from 1 January through to July.

Senator KITCHING: Through to 30 June 2016?

Air Marshal Davies : That's correct.

Senator KITCHING: I've got that. So the next six months—

Air Marshal Davies : Should be tabled at the end of the next sitting period.

Senator KITCHING: Shouldn't it have been tabled midway through this year?

Air Marshal Davies : I think we're talking about two different schedules here.

Senator KITCHING: I have 1 January to 30 June 2016. Shouldn't the one for 1 July to 31 December 2016 have been tabled in June this year?

Air Marshal Davies : Yes, that's correct.

Senator KITCHING: So where is that?

Air Marshal Davies : I'll take that on notice and get an answer for you during this session, if we can, or next session.

Senator KITCHING: Thank you.

CHAIR: Excellent. Thank you.

Proceedings suspended from 15:32 to 15 : 46

CHAIR: We will now reconvene. Acting Chief, you had some things to clarify.

Lt Gen. Campbell : Chair, I would just like to correct the record. I inaccurately described Major General Brereton. He is of course a civil lawyer, Justice of the Supreme Court of New South Wales and a very distinguished infantry officer in the Army reserve.

CHAIR: Thank you.

Vice Adm. Griggs : Chair, going back to Senator Carr's questions this morning about the Broadspectrum issue, he asked a number of questions. Is there was a dispute between Broadspectrum and Defence regarding the Defence maintenance and support services contract at present? There is no dispute. Has Defence paid Broadspectrum additional money to fund the retraining of staff? No, Defence has not paid any additional money to fund the retraining of Broadspectrum staff. Has Defence paid any additional money to Broadspectrum to hire staff into positions where Broadspectrum personnel have previously been made redundant? No, Defence has not paid any additional money. Of those Broadspectrum staff who received redundancies, how many of those were vehicle mechanics? The number of vehicle mechanics made redundant in 2017 is six—four in October and two in June.

CHAIR: Thank you very much.

Senator KITCHING: I want to ask about a particular contractor. You may be aware that it's come to light that a security manual to Parliament House—

Vice Adm. Griggs : Senator, before we do that, the Chief of Air Force can clarify the earlier issue about special purpose aircraft.

Senator KITCHING: Thank you.

Air Marshal Davies : I was getting the last schedule, which was delivered on 25 July; that's why the cumbersome response. The next period that is due—the one you were asking about, from 1 July to 31 December—is still with Defence. It will be with the minister's office in about the next two weeks.

Senator KITCHING: Thank you very much, Air Marshal.

CHAIR: Are you going onto a new topic, Senator Kitching? Senator Xenophon has come back with 12 minutes of questions—

Senator XENOPHON: Eleven minutes.

CHAIR: Eleven minutes, he assures me. He has to leave at four o'clock. My apologies.

Senator KITCHING: I might miss Senator Xenophon when he's no longer here.

Senator XENOPHON: Can I ask some questions of Rear Admiral Sammut? Sorry, I'll get to that in a minute. Vice Admiral Griggs, do you consider Australia's naval shipbuilding a fundamental input into capability?

Vice Adm. Griggs : I consider it a fundamental part of our capability.

Senator XENOPHON: It's an important strategic asset.

Vice Adm. Griggs : Yes, Senator.

Senator XENOPHON: I'm trying to understand how the government formulated a plan for a sovereign shipbuilding capability when—and this is on the record—it hasn't yet been defined what 'sovereign' means. Is there a definition of what a sovereign capability means? At a recent Senate Economics References Committee hearing on the naval shipbuilding industry, the Defence Teaming Centre of South Australia said that sovereign capability is 'the ability to design, maintain, sustain, enhance and develop defence assets and capabilities in Australia' and that achieving this relies on the 'IP rights, the know-how and the know-why'. Is that a definition that Defence would be comfortable with?

Senator Payne: Who are you quoting? It's quite hard to hear you, Senator Xenophon.

Senator XENOPHON: The Defence Teaming Centre of South Australia.

Senator Payne: That's in fact similar to what I said this morning in answer to a question from Senator Gallagher. But I'm very happy for the officials to add to that.

Senator XENOPHON: If I may assist, Mr Lamar, from ASC, yesterday in estimates added the word 'control' to that definition. Does Defence and the government consider that it important for a sovereign capability to be controlled from Australia?

Mr Ablong : We are in the process of finalising the sovereign industrial capability framework that the Defence Industry Policy statement spoke about. The definition that you quoted from the Defence Teaming Centre is in line with but not entirely the same as the definition that we are currently looking at. We haven't finalised that at the moment.

Senator XENOPHON: When will that be finalised?

Mr Ablong : It will be finalised before the end of this year and it will likely be considered by government early next year. We are still working through some of those fine-grain details. As I think I mentioned to you at the Senate Economic References Committee hearing in Adelaide, there is still a considerable amount of work to be done to define things like what we actually mean by 'an Australian company' and what sovereignty means in that sense. We are still working our way through some of those policy judgements. The government will look at our recommendations later this year.

Senator XENOPHON: Can I ask this general question of the Navy: is there an example of any First World naval nation that has an existing sovereign shipbuilding but the government has explicitly denied that sovereign capability a lead role in a major shipbuilding program? I'm talking about the issue of ASC and Austal and the future frigate program.

Mr Ablong : As I think I mentioned at the last hearing of the Senate estimates committee, Australia is in a relatively unique position as a First World nation. For instance, the United States mandate under law that their naval vessels must be built in the United States—but they've done that for 150 years now. The United Kingdom does something very similar. Because of the nature of the procurement processes over the last five decades by the Australian government in choosing different shipyards, different shipbuilders and different designs—some local; some international—we've not been in that same position. The Naval Shipbuilding Plan is quite clear that what we are working to is the sovereign Australian industrial base that is able to deliver naval capabilities affordably and effectively.

Senator XENOPHON: I guess one thing that does concern me, though, is that there is this massive shipbuilding spend—which is obviously very welcome in terms of our capability and industrial capability as well—but how did Navy come up with tender plans without a definition of what a sovereign shipbuilding capability is?

Mr Ablong : The Naval Shipbuilding Plan is quite clear about what the end state of a sovereign naval shipbuilding plan needs to be. It is the ability in surface ships to be able to design, construct, sustain and eventually dispose of the major surface combatants and minor naval vessels and, in the case of submarines, to be able to construct, sustain and eventually dispose of submarines. That is the definition that's been used in our deliberations on the tender processes that we're going through. We can't talk about the tender processes that are currently underway, but that is the definition of what we are seeking to deliver from Sea 5000, Sea 1000 and Sea 1180 projects.

Senator XENOPHON: Surely Austal and ASC have the characteristics that you referred to?

Mr Ablong : The current Australian naval shipbuilding industry, as I think we've talked about before, has some of those aspects but not all of the aspects that we would be looking for—

Senator XENOPHON: Can you tell us which ones they don't have?

Mr Ablong : The Naval Shipbuilding Plan is quite clear that what we wanted in this first set of buyers was to bring in international experience to help bolster Australia's ability to deliver on all aspects rather than just some of those aspects.

Senator XENOPHON: Austal has international experience in exporting its IP to other countries, including the United States Navy, does it not?

Mr Ablong : Well, Austal USA produces ships for the United States Navy.

Senator XENOPHON: Yes, part of the Austal group.

Mr Ablong : Indeed, but they're not ships designed in Australia that were exported to the United States; they were ships designed in the United States by Austal USA.

Senator XENOPHON: But we're splitting hairs. Austal does have that design capability, does it not?

Mr Ablong : It has a design capability for a specific type of naval platform. What we are looking for in terms of the major surface combatants that are identified in Sea 5000 is a highly complex warship capable of conducting antisubmarine warfare and other frigate activities in support of Australia. Austal has never designed that kind of a ship before.

Senator XENOPHON: I will leave it there. I wanted to ask Rear Admiral Sammut a couple of questions in relation to submarine sustainment. Both Mr Carter, the chair of ASC, and Mr Whiley have indicated that they have been exploring the idea of shifting full-cycle dockings of submarines to Western Australia. Is Defence exploring, or has Defence explored, this possibility?

Rear Adm. Sammut : We are looking at all options necessary to help us make sure that we can efficiently deliver the Future Submarine whilst we continue the sustainment of the Collins class.

Senator XENOPHON: So it's being explored, and at whose direction?

Rear Adm. Sammut : Defence is looking at that and we're discussing that with ASC as an important stakeholder in that process.

Senator XENOPHON: How much work is being carried out in terms of looking at shifting the sustainment of the Collins class submarines?

Mr Johnson : Not much. The concept is clear. It's clearly one of the things that a responsible organisation will look at, but it's neither near-term nor is it a high priority in comparison to other work that we're doing right now.

Senator XENOPHON: Are there any results of that work, preliminary or otherwise?

Mr Johnson : No.

Senator XENOPHON: Is there any documentation you are able to table in relation to that?

Mr Johnson : No.

Senator XENOPHON: Finally, the Naval Shipbuilding Plan did not provide guidance on where Collins full cycles will take place in the future. Is that correct?

Rear Adm. Sammut : Correct.

Mr Johnson : I didn't hear that, but if you did—

Senator XENOPHON: Can either of you rule out the shifting of Collins full-cycle dockings from South Australia to Western Australia?

Mr Johnson : There is no plan to move full-cycle dockings.

Senator KITCHING: On Monday, it became obvious at another estimates hearing that a manual that relates to security measures for Parliament House had been lost and has still not been found. In that committee, we did not mention the contractor's name, but it has since become public. I am wondering if Defence was informed or whether the minister was informed about the loss of the manual, and I ask this given the context that the contractor is obviously a supplier to Defence. I think, from a quick AusTender search, there is about $2 billion in spend with that contractor. Were you informed, Minister, of the loss of the manual and—

Senator Payne: Prior to its discussion this week?

Senator KITCHING: Yes.

Senator Payne: No.

Senator KITCHING: Was Defence aware that the manual had been lost?

Mr West : No, we were not informed of the loss of the document, but that would not be expected, because it was not a Defence document.

Senator KITCHING: No. How many contracts does Defence have with this contractor?

Mr Gillis : I would have to take that on notice, but they are a very large supplier to the Australian Defence Force.

Senator KITCHING: I think it's about $2 billion, but that's just from a quick AusTender search.

Mr Gillis : They would be one of our largest suppliers.

Senator KITCHING: Are any of those contracts in security related areas?

Mr Gillis : Yes, they're doing a number of activities—upgrading our anti-ship missile defence, and a range of other things.

Senator KITCHING: Have you spoken with the contractor since this week or corresponded with them to ask them what's happened? Are there document-handling processes—

Mr Gillis : Yes. I spoke to the CEO of that company post understanding, and then I got some context. He gave me some context about what actually happened, what procedures they're doing, how they're changing their processes et cetera. And I've asked for a formal update from the company.

Senator KITCHING: But you're not reviewing contractual relationships, any arrangements, at the moment? You're just going to ask for an update and then—

Mr Gillis : Not based on what the CEO told me about the circumstances.

Senator GALLACHER: How many thousand-page manuals would they have with $2 billion worth of contracts?

Mr Gillis : My understanding is that the loss related to a CD—a single CD.

Senator KITCHING: When you get that update—we'll be in estimates next February-March—it would good to have an understanding, given they have a large number of contractual—

Mr Gillis : We take any loss or any security breach very seriously. We would investigate the circumstances around it and would act appropriately. But I can't give you any indications as to what our effect would be, as we've only found out about it recently.

Senator GALLACHER: Would you have a register of security manuals for each contract? Would there be a signature attached to that? I accept it might be in electronic format. But, if you've won a contract and you've got secure information which pertains to that contract, how do you maintain probity, integrity, in respect to those—

Mr Gillis : Senator, it's a requirement under the Commonwealth contracting, the ASDEFCON contracts that we structure, that they comply with Defence Force security requirements, and we conduct audits. We look at those companies. We make ongoing assessments of those companies. So it's a normal practice for us to ensure that those companies are maintained. This instance occurred in a non-Defence related activity in another part of that company. So we've got to look at the relevance of that particular breach and what they've actually done to secure that, and we have to make sure: does it have any relationship or effect on our relationship with that particular company?

Senator GALLACHER: It might be a non-Defence related activity, but it is still a substantial upgrade of the nation's parliament—

Mr Gillis : Yes, absolutely—

Senator GALLACHER: and a security document—

Mr Gillis : That is why, as soon as I found out, I contacted—

Senator GALLACHER: wasn't looked after in a proper way, as Senator Kitching—

Mr Gillis : I contacted the CEO of that company and asked—

Senator GALLACHER: They didn't contact you?

Mr Gillis : No.

Senator GALLACHER: You contacted them?

Mr Gillis : I contacted him.

Senator GALLACHER: Is there a register attached to each contract of who can access confidential CDs or manuals, where they're supposed to be kept and all that sort of thing?

Mr West : The company is part of the defence program known as the Defence Industry Security Program, the DISP, under which we manage our security relationships with all Defence contractors. We certify their systems and facilities to handle information up to certain classification levels, and their staff are separately vetted to hold security clearances. So the issue would be what type of document it is and whether it was appropriately handled by appropriately cleared people and within appropriate facilities and systems. We're waiting for that information—

Senator GALLACHER: Given they are CDs, are they encrypted or can anybody open them?

Mr West : It would vary, depending on the classification of the information.

Senator KITCHING: I might leave it there. I was interested to see whether there had been contact with the company, given they are significant—

Senator GALLACHER: You have nothing to report in terms of lost, misused or inadvertently misplaced manuals?

Mr West : Not Defence manuals, no.

Senator GALLACHER: So you can vouch for the integrity of all of your security manuals, classified manuals, in respect to the contracts with this particular company?

Mr West : The Defence security manual is available online. We don't have it as a classified document. BAE handle many other classified Defence documents, and we're not aware of any reporting of loss of documents recently.

Mr Gillis : Nothing has been brought to my attention that would raise my concerns over BAE's security practices. This is an issue that we've only been made aware of recently.

Senator GALLACHER: Did BAE report the loss of this document or did someone else find it out?

Mr Gillis : That's a matter for others. It wasn't related to a Defence related contractor. As I've said, we only became aware of it recently.

Senator RICE: I have three separate topics. I want to start with media reports over the last couple of days about the Facebook page SNAFU, which has links to over 100 members of the Defence Force, where users were sharing memes promoting domestic violence, rape and sexual abuse of children. I understand the page has now been taken down. I want to get Defence's response to the page.

Vice Adm. Griggs : When we became aware of the existence of the page, we contacted Facebook on three separate occasions in an attempt to get it taken down. Clearly, we are as unhappy about that page as everyone else is. It is an awful page. My understanding is that overnight Facebook has taken down that page. We have a separate investigation running within the department to see if we can identify any serving members who are clearly identifiable and who may have been involved in unacceptable behaviour in relation to this page. Those investigations will run their course and action will be taken as appropriate.

Senator RICE: Does the fact that the page has been taken down impact on your ability to identify the members?

Vice Adm. Griggs : I don't believe so.

Senator RICE: There was an article in The New York Times yesterday that quoted the organisation that said they brought the page to your attention, the Victims of Abuse in the Australian Defence Force Association. In that article, they claimed they shared their findings about the SNAFU page with military representatives twice this year before bringing it to the news media. I'd like your response to that.

Vice Adm. Griggs : My understanding is that that organisation raised the issue in July. We then started to look at it and on three separate occasions we contacted Facebook in an attempt to get it taken down.

Senator RICE: When did you first contact Facebook?

Vice Adm. Griggs : I think it was in August.

Senator RICE: And then two occasions since?

Vice Adm. Griggs : Twice in August and again in September.

Senator RICE: When did you begin investigations into Defence Force members?

Vice Adm. Griggs : I will get back to you with that.

Senator RICE: There are comments in an article from Ben Wadham, associate professor in sociology at Flinders University, who said the content of the page was distressing but he wasn't surprised that it was followed by Australian service members. He comments:

… despite such efforts at the top, he had seen little determination to change misogynist attitudes in the lower ranks. "If the A.D.F. wants to be serious about protecting and upholding the principles of a liberal democracy, then it has to go to the core of the source of its own violence" …

I'd like your response to that.

Vice Adm. Griggs : I'm not going to. Ben Wadham's views are very well known to us.

Senator RICE: And he further commented:

I feel like in the A.D.F., there’s been a massive backlash against the gains that were made between 2011 and 2015, during its short experiment with gender equity.

Vice Adm. Griggs : I reject (a) that it is an experiment and (b) that it's short. Gender equity is an important aspect of our cultural change journey and it will be an enduring future of our cultural change journey. It's one that we are driving internally in the organisation. It's not being imposed on us.

Senator RICE: But you feel that you have been continuing to do as much as you were doing between 2011 and 2015?

Vice Adm. Griggs : Across all the elements of our cultural change program, across all the elements of our diversity and inclusion program, yes.

Senator RICE: What more needs to happen so that we haven't got situations where Defence members are accessing pages like the SNAFU page? We've clearly still got an ongoing cultural problem within the defence forces.

Vice Adm. Griggs : We have a force of nearly 90,000 full-time and part-time members. We just have to continue with the programs we have. We have to continue to lead, as we have been, to get the message across to our people. We are going to have small elements, at times, that do this.

Senator RICE: Can you outline for me the main elements of the programs that you are undertaking.

Vice Adm. Griggs : There are a number. All three services have their own particular cultural change programs, and they operate underneath the umbrella of Defence's broader cultural change program, Pathway to Change, which is well articulated. We have zero tolerance of unacceptable behaviour but, as I've said to the committee in the past, regrettably zero tolerance does not equal zero incidence. The important thing for us is that our people know that when we say zero tolerance we mean it and we take action, as we are in this case.

Senator RICE: So you have a target of zero tolerance—

Vice Adm. Griggs : No, it's not a target of zero tolerance. We have zero tolerance. What I'm saying is that in—

Senator RICE: A target of zero incidence, but you clearly haven't got zero incidence now.

Vice Adm. Griggs : It's really important in this discussion to have credibility. If you say your target is zero incidence in an organisation of 90,000 people, I think you lack credibility. Would we want to have zero incidence? Absolutely. We want no incidence of this. But I think you have to be realistic, and that helps you target your programs to make sure you work on those areas of the organisation that need working on.

Senator RICE: How are you monitoring the effectiveness of the programs that you're doing?

Vice Adm. Griggs : We do a range of cultural climate surveys. We have our YourSay survey—and Ms Kelley can talk to that—which gives us feedback. A number of the individual service programs have different tools that they use to assess cultural change. They're our primary mechanisms from an empirical perspective. Then, of course, we get out and talk to our people and get feedback on how they perceive it, and there is no doubt that there are a range of views across an organisation as big as ours about these issues.

Senator RICE: Has Defence encouraged people to engage with the #MeToo social media campaign that's been running over the last few weeks?

Vice Adm. Griggs : I'm not aware.

Ms Kelley : No. It's not that we haven't encouraged people; it's that we're not sure what people do as individuals.

Senator RICE: So there's been no engagement? Certainly a big part of that campaign has been to encourage men in particular to come forward and not just to leave it to women to acknowledge that they have been the victims of sexual harassment or sexual violence. Okay, moving on—

CHAIR: Before you go to another topic, I know that Senator Moore has another couple of SNAFU questions.

Senator MOORE: I have just a couple of follow-ups. You told us that you contacted Facebook a number of times?

Vice Adm. Griggs : Yes, three times.

Senator MOORE: Is it possible, on notice, to find out what they told you? This is part of a much wider debate about these kinds of issues being on Facebook and the difficulty in having things taken down. So I'm putting that question to see whether you can take it on notice.

Vice Adm. Griggs : We'll certainly attempt to get that.

Senator MOORE: It's useful to see that when the Defence Force contacts Facebook and says there's something so objectionable they would like it taken down, and they did not respond in an immediate action and you had some difficulty—it will be interesting to know what they said. That'd would be lovely.

Vice Adm. Griggs : We'll talk to the person who made the contact for you.

Senator MOORE: That would be good, and the other thing is, in the internal process in the department, this has gone—as always, in these cases—into the media and a wide range of media commentary has already been identified, as Senator Rice has pointed out. Has Defence done anything internally to make some kind of public statement to call people, if they've been affected by it, to come back through the many programs you've got? What has been the internal handling by Defence of just letting people know that this has been identified—confirming or not confirming what the media comments have been made, but actually acknowledging that something has gone wrong?

Vice Adm. Griggs : I think our focus at the moment has been on trying to identify how many, if any, are serving members. There have been a number of claims made. We are not sure yet, and we're still looking to understand that. I do take your point.

Senator MOORE: Has anything happened such as putting something out to current personnel?

Vice Adm. Griggs : No, I don't believe so.

Senator MOORE: Should there be? Is that a discussion of whether you will or you won't, or you've made the discussion not to do it?

Vice Adm. Griggs : No, we'll take that on board.

Senator MOORE: Thank you. Can we—the committee—be advised; is that possible?

Vice Adm. Griggs : Yes.

Senator MOORE: That'd be lovely. Thank you, Chair.

Senator RICE: Relatedly, I want to move onto support for transgender and non-binary defence personnel. I want to acknowledge the statement that Minister Payne made in the Senate the other week in response to a question in the Senate about that. But, I want to ask about a quote from Andrew Hastie in The Weekend Australian. Is the Defence Force a vehicle for radical or aggressive social engineering, which is what Andrew Hastie claimed the Defence Force was?

Vice Adm. Griggs : No, Senator. It's not, and nor am I a post-modern deconstructionist.

Senator RICE: Could you talk about what the ADF is doing to promote inclusion for both transgender and non-binary ADF personnel?

Vice Adm. Griggs : Can I just make a couple of points about the transgender debate, because I think they need to be made. We are talking about our people. These are people who are wearing the uniform of this country and serving this country. They deserve to be treated with the respect that any other member of the Australian Defence Force is treated with. They deserve to have appropriate medical treatment that any other member of the Australian Defence Force has. They deserve to have appropriate medical treatment in line with other members of the community. All of those things are exactly what happens in the way that we manage gender dysphoria.

Gender dysphoria is a mental health condition. It's a resolvable mental health condition. It sometimes requires surgery and sometimes it doesn't. The aim here is not to lose talented individuals whom we have spent many, many millions of dollars in training—many millions—and many, many times more than $1 million worth of treatment. I have found the public debate to be almost bordering on hysterical and very, very unhelpful, and very unhelpful for our people who are managing their way through this.

Senator RICE: Thank you. Would you like to comment on whether promoting inclusion for transgender and non-binary people within the ADF helps improve ADF performance and cohesion.

Vice Adm. Griggs : That is the basis of our diversity and inclusion approach. Why do we do this? We believe—and you only have to look at any management literature—that a diverse team is a more capable team. That's the basis of our position, and it has been for a number of years. We, quite rightly, have been accused of being a bit slow on the uptake of that. But, I think in the last few years we have been very consistent about diversity and inclusion being a capability issue. We have tried to manage these issues as sensibly as we can. We know that they are issues that draw strong reactions across the community, and there's a wide range of views about it. But our aim is to be sensible and consistent along the lines that we fundamentally believe that a diverse workforce is a more capable one. We're a team-based organisation. Even a fighter pilot on their own in an aircraft has a team behind them that gets them into the air. We can only fight and win, which is what we are all about. And for those who say that we're not focused on that, I would absolutely reject that. We are focused on fighting and winning, but we can only fight and win as a team, and we can only do that, like any team, if we respect each other, we respect each other's capabilities and skills.

Senator RICE: Thank you. My final questions are related to something completely different, which is the sale of the Maribyrnong Defence site.

CHAIR: Hang on, I know Senator Lambie has got some questions on this as well.

Senator LAMBIE: That's fine.

CHAIR: Alright.

Senator RICE: Thanks, Chair. I want to find out what further work has been done towards the sale of the Maribyrnong Defence site since we last met in estimates in June.

Mr Grzeskowiak : We talked about this in the last estimates. Since then we've appointed our strategic property adviser, a company called Currie & Brown. They're working up a more detailed disposal strategy for us. We've got a range of community engagement meetings ongoing. On 3 July we provided briefings to relevant government members from the area. On 13 June we provided a closed briefing to the Maribyrnong city councillors, and I think there were some briefings on 10 May as well. On 20 August there were two community information sessions. Around 100 members of the community came along to those sessions—that was good—just so we can try and make sure that people in the local area are aware of how this is going. As well, we've been talking about weed management; we talked about that last time. In November we'll start a process of trying to get into those thistles. It's doable but difficult. The terrain there is a bit difficult, but that's going to start in November. We've been talking to the council as well about the possibilities of a sort of footpath cycle trail by the river. There's a little bit of a way to go on that conversation, but we're in discussions about how we might be able to facilitate access to that strip of land, maybe even in advance of a sale of the whole property. As well, we've placed the first contracts for the decontamination of the part of the site that Defence will decontaminate, which is around the old Defence Science and Technology Organisation research area, and we would expect that work to kick off early in the new year.

Senator RICE: Have you got any updated estimates of the cost of the parts of the decontamination that Defence are going to do?

Mr Grzeskowiak : The estimate cost of that is in the order of $54 million; that's what's been provisioned. Obviously, as with any decontamination work, you make your estimates based on the knowledge you have.

Senator RICE: That's right. So I thought, if you've got some more knowledge now, you might have had some updated estimates.

Mr Grzeskowiak : That's our current estimate, and the work will commence. We're having to bring in very specialist industry to do that work.

Senator RICE: What are the major timeline milestones that you're working towards for the sale of the site?

Mr Grzeskowiak : That's what we've asked our strategic property adviser, who came on board on 1 September, to look at, in terms of let's have a look at a whole range of issues to inform what the best time is. Probably—and I can't put a fixed date on it, because obviously we need to see that advice—we need to talk to the Victorian Government as well about planning schemas for the site; that's not a Defence issue. Obviously, the first thing we'd do is approach the market for expressions of interest, and then, following that, and following agreements with local authorities about what the zoning scheme might look like, we'd go to market for an actual price.

Senator RICE: So you are planning a bit of an iterative process. You are getting expressions of interest and then looking at what the potential zoning would be. Then the potential buyers may or may not be interested at a particular price.

Mr Grzeskowiak : That whole process will be informed by our strategic property adviser—the sort of people from industry who do this every day of the week for a living. They will give us good advice on the best strategy to go forward.

Senator RICE: Has Defence had any more engagement or interaction with the Enrichment Holdings Group?

Mr Grzeskowiak : I'm not aware of the Enrichment Holdings Group. We've engaged with a couple of community groups. One of them is the friends of-

Senator RICE: They were the Chinese investors. The media coverage was that they had apparently put in an unsolicited expression of interest in the site.

Mr Grzeskowiak : We've had a couple of unsolicited expressions of interest. When we receive them, we thank the company for their interest, apprise them of the process we're going through, and they can choose to join in with our expressions of interest when we go to market or with bids in due course when we go to market for a sale.

Senator RICE: How many other unsolicited expressions of interest have you had?

Mr Grzeskowiak : I would have to take that on notice. I'm aware of one. But we just knock them back. We don't do any work on them. We just write back to the company, saying: 'Thanks very much. This is the process we're going through. We'll be going to the open market. You may bid if you so choose at the appropriate time.'

Senator Payne: To be clear: we're not in the business of receiving unsolicited bids, Senator.

Senator RICE: Yes. What I understand you to be saying is that you want a pretty close to final indication of the zoning and potential development of the site before you sell, even though that zoning wouldn't come into place until after the sale.

Mr Grzeskowiak : That is a matter entirely in the control of the local council and the Victorian state government. We're working with them. I know that they're working on the process. It's not something that Defence controls, although clearly we are providing information into that process.

Senator RICE: I want to confirm that, although that process can't quite conclude because that zoning can't come into play until the site is sold, you're not going to sell until you have an expectation or indication of a final draft, I suppose, of what the planning would be?

Mr Grzeskowiak : We will take advice from our strategic property adviser on how we go forward, but usually any purchaser would be deeply interested in knowing what the development opportunity was on the site.

Senator Payne: There are also whole-of-government implications, Senator, as you will recall from the time of the announcement, around housing policy and matters like that. So, in conjunction with Treasury, the Treasurer and relevant ministers, that will be part of Defence's processes.

Senator RICE: When the announcement was made that Defence was going to sell the site, there was an approximation of 6,000 dwellings on the site, which was a doubling of the planning outlined some years prior, which was looking at 3,000. What's the basis of those 6,000 dwellings, if you haven't yet done the planning process?

Mr Grzeskowiak : At that time, Defence had been advised by some property consultants that the potential development of the site was up to 6,000 properties. Of course, that depends on the nature of the development that will ultimately be agreed. That's why the announcement made in May talked about potentially up to 6,000 properties. That advice came from a property adviser. Of course, the planning schema, which will be controlled by the Victorian government and the council, will be the ultimate arbiter, plus government's desire for certain amounts of affordable housing.

Senator GALLACHER: On the Maribyrnong process, Mr Grzeskowiak: this was referred to the Public Works Committee. It was closed in 2005. The first referral was in 2013 to Ms Kirsten Livermore. Then there was a further referral, I think, this year. It's $54.9 million, which you've set aside. There is $3 million to do some immediate works, with a small number of presumably site buildings. You bring in experts from the US to work out what the contaminants are, because you don't know. Is that the correct information?

Mr Grzeskowiak : The contract for the US organisation, ECBC, who are world leaders in this type of decontamination, is for some further investigation and the decontamination.

Senator GALLACHER: Because you don't know what is on that 6.5 hectares.

Mr Grzeskowiak : We've already done, over the years, a fair bit of analysis so we've got a good idea, but, as part of their process, they'll do some sampling before they commence the remediation. But the contract for ECBC will include the remediation of that area.

Senator GALLACHER: So American experts have been brought in because we don't have the wherewithal to identify the contaminants. Is that correct?

Mr Grzeskowiak : We've used this company before, particularly when we've found things that have been left over from various war stocks. They are experts in dealing with what we would term Defence contamination rather than more routine industry contamination. They have a very good record and this is just about ensuring we have the least-risk approach to doing this work.

Senator GALLACHER: Does this $54 million expenditure only relate to the examination of 6. 5 hectares of the approximate 127 hectares?

Mr Grzeskowiak : It's the examination and decontamination of those 6.5 hectares, which is mostly the old science and technology organisation's site.

Senator GALLACHER: What will we do with the 120.5 hectares—

Mr Grzeskowiak : With the remainder of the site, the contamination there is of a much more common or garden nature. That will be decontaminated by whichever organisation eventually owns that site as part of the development process. That decontamination will be overseen by the environmental protection agency in Victoria and it will have to meet all the standards of the Victorian regulators.

Senator GALLACHER: The site was used for a range of explosives manufacturing, laboratory research, equipment and material testing between its establishment in 1908 and closure in 2005. Does that include firefighting foams and PFAS and the like?

Mr Grzeskowiak : It's possible there might be some PFAS there. I wouldn't have thought there'd be a huge amount. As you have said, it was mainly used as an explosives factory. There is a lot of asbestos on this site, there are residues of explosive left over and there are residues of trials done for various Defence activities.

Senator GALLACHER: Given the fact that it was used for nearly 100 years and that we have identified one particular area where we need some specialist expertise, how soon would this land be available for people to build houses on?

Mr Grzeskowiak : The decontamination that Defence is funding and commencing early next year will be between 18 and 24 months. The decontamination of the remainder of the site will be done by industry. Industry's ability to decontaminate a sort of brownfield site like this is fairly strong these days, and whichever industry player ends up organising that decontamination will manage that in a phased method along with whatever developments are undertaken.

Senator GALLACHER: What progress has been made on the riverside walking and cycle path between the site and the river?

Mr Grzeskowiak : As I said to Senator Rice, we're talking to local council—

Senator GALLACHER: I can't help who gets the order of questions.

Senator Payne: But it's already been asked and answered, Senator.

Senator GALLACHER: I understand that. But normally we have a schedule and we go according to that. We haven't got that today, so we're going to jump around all over the place.

CHAIR: Standing orders have changed.

Mr Grzeskowiak : We're still negotiating with council but there is a possibility that we might be able to facilitate that in advance of the sale of the whole site. That's still being worked through.

Senator GALLACHER: Has the timetable for an open-market testing process been established?

Mr Grzeskowiak : As I said, we've recruited a strategic property adviser and will take their advice, working with local government and council, on that.

Senator GALLACHER: Is it able to be tabled, when it's available?

Mr Grzeskowiak : We don't have a detailed time line at this point. We're still working through that.

Senator GALLACHER: Thank you. That's all I had on the Maribyrnong site.

Senator MOORE: I want to follow up briefly on the issues the senator raised around sex discrimination. Vice Admiral, I really take your statement about caring for your people, and I acknowledge that. I just have a series of questions about some media comments being made in the September period. Minister, in terms of your statement in the Senate last week, it was my understanding that that related particularly to a question about surgeries. Is that right? Did you make any other statement in the Senate last week generally around issues of sex discrimination in the armed forces?

Senator Payne: To the best of my recollection—a week is a long time ago—I responded to a question from Senator Hanson on a particular media report on gender dysphoria, which included reference to medical treatment broadly, and not just to surgery.

Senator MOORE: It was a very strong statement, and I really appreciate it, but these questions go a little bit wider than that. Normally, in some other committees, we hand out copies of media, but I won't do that now. I'll just raise it and, if we do need them, I'll put them to you. There were a number of articles in the late September period that were talking about discussions within the department, or within government, about Defence moving away from getting exemptions. So looking at exemptions under the Sex Discrimination Act. Vice Admiral, were you aware of those discussions?

Vice Adm. Griggs : I'm aware of the reporting. I think that was, in particular, focused on the gender X non-binary issue.

Senator MOORE: Yes.

Vice Adm. Griggs : It was not broader than that; it was about that specific issue. I think one of the things that it's important to note is that that's the law. People forget that the Sex Discrimination Act was changed in 2013, which brought that into play—as it did, in fact, the treatment of transgender people. So that's another element to what I said earlier. It's a complex issue, it's a challenging issue, and, frankly, we are still working through how we are going to approach the management of that. I wouldn't like to go into any greater detail, other than to say that we have had an internal discussion around the matter. We have had some initial discussions with the Human Rights Commission and the Attorney-General's Department. We're probably at the forefront in government in grappling with this issue, and we have not resolved where we think we're going to land on this.

Senator MOORE: Minister, the tone and the focus of these media articles—and I take absolutely the fact that media articles are not always the best method for getting information, but this is in the public space—indicated that there were discussions within government about the potential for moving away from the Sex Discrimination Act in the ADF. The way it was put was that this was done under Minister Tehan, and that it was actually raised. I'm wanting to find out whether you and Minister Tehan were involved in these discussions. I'm trying to get to the bottom of this. The media made hay with these articles, and it would be useful to get a response as to whether that's a factual element or not.

Senator Payne: Acting CDF has represented the situation quite precisely.

Senator MOORE: Right. It is worrying that this degree of detail is out in the media sphere. As Vice Admiral has just said, these things are very sensitive, they have a wider impact, and it causes concern—not just within the ADF but also wider afield—that there seems to be quite a degree of information that's been put in a number of media areas. Is there anything that the Defence media group is doing to look at how that is happening?

Senator Payne: I don't have in front of me the benefit of the particular pieces of media you're referring to, but, fair to say, your observation about the willingness of reporting to do a combination of things—one would hope starting with inform, but that's not always where it ends—is part of the process. We have no control over that. In terms of the actions that are being taken within Defence though, as I've said, the acting CDF has represented those accurately.

Senator MOORE: Is there any indication of a time period for these discussions, Vice Admiral Griggs?

Vice Adm . Griggs : No. I don't think it would be fair to try and put a time frame on it, but we are working through the issues.

Senator MOORE: If there are any other questions, I think I had better put them on notice. Perhaps at a future time, Minister, we would be looking at having a briefing on the process, rather than using the time of this committee.

CHAIR: Senator Lambie.

Senator LAMBIE: Because everyone has to have psychological screening before they join the armed forces, I am just wondering about the way you're now doing your psychological screening—about picking this out very early on?

Vice Adm . Griggs : Picking what out, Senator?

Senator LAMBIE: Picking whether or not these people are gender dysphoric. Surely you will want to know that during your psychological screening—because, I can tell you what, it's quite invasive. You want to know everything else about people; you want to know who's been an alcoholic in their family—surely you would have this in your screening?

Vice Adm . Griggs : You're making an assumption that our screening doesn't detect that and it does—and it has. We have a very clear position around people who are applying to join the ADF who have gender dysphoria. If they have an active condition then they are not considered, at that time, fit to enter the Australian Defence Force. If they have had their condition resolved, then they are considered to be able to join the ADF. So I believe, and I'm sure Air Vice Marshal Smart would agree, that our screening does pick up these issues.

Senator LAMBIE: When did that change? When did your screening change, and what screening advice did you give out back in 2013? Surely you must have that.

Air Vice Marshal Smart : Our policy towards gender dysphoria management is the same as any policy to any medical condition—

Senator LAMBIE: I'm not asking you about the management. I'm simply asking, what did you change in the psychological screening so that you pick this up early on?

Air Vice Marshal Smart : Our screening is the same. We take a detailed history that includes all aspects of both medical and psychological issues, and so this is a condition that is looked at at recruiting, And if it is identified, further advice is sought from specialists as to the nature and where the person is on that transition process and, if they have completed transition—and resolved, therefore, their gender dysphoria—they are recruited into the ADF. If they haven't, then it's like a person with any other chronic illness or condition: they're told they can't be recruited at that stage but, once the condition has been resolved or stabilised and we're satisfied that they're fit to serve, then we can bring them back in at a later date.

Senator LAMBIE: Are they medically fit to serve—is it grade 1, or whatever you call it these days? And can they be put on the front line with a weapon in their hand like any other soldier out there?

Air Vice Marshal Smart : Absolutely.

Senator LAMBIE: How many of them do you have on the front line right now that are serving with a weapon in their hand? How many of them are combat soldiers?

Air Vice Marshal Smart : I wouldn't have that information, Senator; we can take that on notice. But it is not an area that I would be across. But certainly, once their condition is resolved, then they would be treated like anybody else and are able to be deployed or employed in any particular role.

Lt Gen. Campbell : I just want to note, Senator Lambie: all soldiers are trained and able to conduct operations, and to defend themselves and their teams, no matter what their job or employment status on operations.

Senator LAMBIE: Yes, and I'm very aware of that. But they can't if they're not a certain med class; you know that as well as I do.

Lt Gen. Campbell : So every person who is a deployable member of the army—

Senator LAMBIE: Are they deployable?

Lt Gen. Campbell : is a soldier able to conduct operations.

Senator LAMBIE: Are they deployable? That's what I'm asking you.

CHAIR: That question was taken on notice, Senator Lambie.

Senator LAMBIE: I haven't finished my questioning, actually. I've got other questions on this, so may I have my 15 minutes, please?

CHAIR: Sure. Sorry, I thought you had concluded.

Senator LAMBIE: Thank you; no, I haven't concluded. I want to know: what risk assessment did the military do when you introduced gender dysphoria into the Defence Force? And may I see that assessment?

Vice Adm. Griggs : We didn't introduce gender dysphoria. As a result of the changes to the law in 2013, we developed a policy, which was finalised in 2015, to manage a change to the law.

Senator LAMBIE: Did you do a risk assessment on it? A risk assessment is done on everything else in the Defence Force. Have you got a risk assessment to evaluate that? You've obviously agreed with it. You're not fighting against it, from where you are—the hierarchy.

CHAIR: It's the law.

Vice Adm. Griggs : Let's put this into the bigger context. You're a valuable advocate for veterans' health and particularly mental health issues. This is a mental health condition, and it's really important that we remember that. What is the main thing we've been trying to do in terms of veterans' mental health? It is to reduce stigma. When we have discussions like this, what we're doing, frankly, is reinforcing the stigma of one strand of the mental health spectrum, and I don't think it's particularly helpful.

Senator LAMBIE: No, that's not what I'm doing, so please don't patronise me.

Vice Adm. Griggs : I am not patronising you.

Senator LAMBIE: I'm more worried about the morale of the troops. When did you do a survey and ask the diggers what they thought about it? Did you go in and fight for those diggers? I'm telling you: there are thousands out there that are not happy about this. How does their morale stack up, and what do they think about the decision that's been made? Did you feed that decision back to the people that make the laws up here? What did you do? How much did your people—how much did the Defence chiefs—play in this? What part did they play in this? What information did they provide? That is all the stuff I'm looking for.

CHAIR: There are about eight questions, Senator Lambie. I think it will assist proceedings—

Senator LAMBIE: They can take them on notice.

CHAIR: They're taken on notice.

Senator GALLACHER: Could I get someone who can talk to the defence white paper in respect of fuel installations and the new investments program up to 2025. Is someone able to talk to that?

Senator Payne: Why don't you start, and someone will come to the table.

Senator GALLACHER: We obviously need fuel installations; they're critical enablers—that's straight out of your white paper. What is the government spending in regard to fuel supply, as outlined in that white paper?

Vice Adm. Griggs : Sorry—fuel supply or fuel installations?

Senator GALLACHER: The new investments program across the decade to 2025: upgrades to existing fuel infrastructure; improved access to commercial fuel supplies, particularly to support high-tempo operations in northern Australia; airfield fuel trucks to be replaced; deployable fuel supply equipment for amphibious operations—

Vice Adm. Griggs : It's a big program. They are a wide range of issues.

Senator GALLACHER: How much are we spending in respect to that—what's been outlined in the white paper—which I appreciate is over a decade.

Air Vice Marshal McDonald : You have covered a fair bit of ground there, which crosses across several departments. I can comment on what we're doing to remediate deficiencies in the fuel supply.

Senator GALLACHER: Didn't the white paper actually flag a figure of investment over those multiple areas?

Air Vice Marshal McDonald : It did—over those multiple areas and specifically.

Senator GALLACHER: So what is that figure?

Vice Adm. Griggs : We'll get that number. It's an aggregate of several elements, so we'll get that number on notice.

Senator GALLACHER: Am I correct in assuming that the Integrated Investment Program will be completed in the financial year 2025-26?

Air Vice Marshal McDonald : That is correct.

Vice Adm. Griggs : The program runs on from that, but the funding that was articulated in the white paper was over the decade. So, 2025-26 will be the end of the decade.

Senator GALLACHER: It's early days yet, I suppose, but how is it progressing against that timetable?

Air Vice Marshal McDonald : For the remediation aspects it is progressing well. We have reduced down to four all the high-risk aspects with current fuel installations, and that's on track to reduce those four to zero by August next year—so, on track.

Senator GALLACHER: All of this is predicated on you actually having fuel to use.

Air Vice Marshal McDonald : That is correct.

Senator GALLACHER: So how much fuel do you currently have in reserve in Defence's control?

Air Vice Marshal McDonald : I will take that on notice, but we spend $455 million a year on fuel.

Senator GALLACHER: I understand that, but my questions are in relation to having operational tempo and needing to do certain things, which you do in cyclones, national emergencies and floods—and I understand you were in the Queensland floods doing excellent work. What capacity do you actually have to maintain your operational tempo?

Air Vice Marshal McDonald : Sufficient capacity, as has been demonstrated over recent events. We haven't had any issues.

Vice Adm . Griggs : Senator, I will give two examples. When we did the review of the fuel system, one of our fuel installations in Darwin was considered to be well beyond its life. We negotiated a contract with the quite large civilian fuel infrastructure near the East Arm Port and we now have at least greater capacity of fuel reserves in the Darwin area. In Townsville we are in the process of finalising access to storage tanks so that we can store adequate supplies of F-44, which is what we use for our helicopters, given that Townsville is a key embarkation port for our amphibious fleet and the LHDs carry a number of helicopters. That's an example of the work that has already been done in the last couple of years as a result of the fuel system review. We have investment going on at Garden Island in Sydney around the ready-use fuel tanks there. So there is a lot going on in accordance with the program.

Senator GALLACHER: I accept all of that and I accept that you haven't had a problem up till now, but my real question is: how many days of fuel do you have on site? What's your storage capacity?

Air Vice Marshal McDonald : I'll get back to you on that, Senator—

Vice Adm . Griggs : Some of that is classified, so we'll give you what we can, Senator.

Senator GALLACHER: We know that there is ongoing discussion more broadly in respect of the IEA obligation of 90 days for Australia. We know that sometimes we have 41 days. We know that some recent legislation was passed through the parliament to try to meet our obligations by having sort of ticket selling against fuel that's not in Australia. What would happen in the event that there was a disruption to our shipping routes along the veins of what Senator Whish-Wilson was talking about on the Korean Peninsula and we weren't able to maintain our exactly-on-time logistics supply? How long would it take for Defence to need to enact legislation which basically took over all the fuel in Australia?

Vice Adm . Griggs : I think that's a relatively extreme scenario. In general terms—and I am sure that, if I get this wrong, I'll get the message that I've got this wrong and we'll correct it—from a Defence-only perspective I think we are well in excess of the IEA number. I know that doesn't translate nationally, but from a Defence perspective, we've got a longer buffer and more resilience.

Senator GALLACHER: Does that mean we have greater storage capacity than what I can see?

Vice Adm . Griggs : We've got considerable storage capacity from a Defence perspective.

Senator GALLACHER: And that's what's been upgraded in this decade-long—

Vice Adm . Griggs : I think there was about $1 billion—

Air Vice Marshal McDonald : $1.21 billion.

Vice Adm . Griggs : $1.2 billion allocated to upgrading the fuel facility system across the country.

Senator GALLACHER: This investment is to upgrade both our storage capacity and our operational capacity?

Air Vice Marshal McDonald : That is correct. It is also looking at diversifying with industry. It shows that we can have additional capacity through that outlet.

Senator GALLACHER: And there is no foreseeable circumstance where we're exposed in terms of operational tempo, as we speak?

Air Vice Marshal McDonald : None that we're aware of.

Senator GALLACHER: Thank you. I want to move to the subject of Chinese-made DJI Phantom. Does anybody have any information about that?

Senator Payne: What specifically about it do you want to ask?

Senator GALLACHER: When did the ADF or the department first become aware of the concerns around this drone?

Air Vice Marshal McDonald : I will call Major General Thompson to the table.

Senator GALLACHER: I have four or five questions. When did the ADF first become aware of concerns around this drone.

Major Gen. Thompson : The specific date I'd have to take on notice. We were aware of commentary from colleagues in the US regarding that particular drone.

Senator GALLACHER: When were you aware of the commentary in the US, how long was it before you acted? Was it immediately or—

Major Gen. Thompson : It was virtually immediately. I'd have to take on notice the exact timings.

Senator GALLACHER: Are you able to say exactly when the US Army banned the drone?

Major Gen. Thompson : I'd need to take on notice to find the exact date.

Senator GALLACHER: How did you convey that to the Minister or her office? Was it immediately? How did the Minister—

Senator Payne: Very promptly.

Senator GALLACHER: Can we get that on notice—when it happened?

Major Gen. Thompson : Yes.

Senator GALLACHER: What made this drone unsuitable for use?

Major Gen. Thompson : There were some concerns regarding the cybersecurity characteristics of the of the device.

Vice Adm. Griggs : We're being deliberately vague.

Senator GALLACHER: Yes, but if you go back far enough, someone commandeered the drone of another nation and landed it. Is that the sort of thing? It was weak in terms of control?

Vice Adm. Griggs : If you want to dig into this in greater detail, I suggest a private briefing might be appropriate.

Senator GALLACHER: So you had a concern. You're not able to go into that publicly. What was the drone used for before the suspension?

Vice Adm. Griggs : A variety of purposes, from public affairs through to local surveillance.

Major Gen. Thompson : It would have a camera on board.

Senator GALLACHER: So it was used in a variety of methods, which you'll go into in camera, so to speak. What about information captured? Was that all secured or how serious was the concern? Was this a security breach?

Vice Adm. Griggs : That's why I would like to do this offline if we could.

Senator Payne: As I recall we made a statement at the time. I don't have that available to me here but I'm happy to provide you with a copy of that. In terms of a more detailed briefing we can provide that to the committee in an appropriate environment.

Senator GALLACHER: Very good. We've got some questions on Defence credit cards. Is there anybody that's going to give us a short, sharp brief on the credit card spend and the security of the transactions and identification of the hopefully not inadvertent use of the credit cards? Do you have a standard report on credit cards that have been misused?

Mr Prior : I have a process where I have a standard report that comes to me each month on credit card usage. I also have a report that comes to me about a regular, ongoing, daily, weekly review of credit card transactions, in a sense, looking for unusual transactions, which are then followed up through the normal processes to ensure there are no aberrations that are outside the normal pattern of usage that is acceptable for the use of credit cards.

Senator GALLACHER: And we've had no loss of fuel cards as there has been in previous years?

Mr Prior : No, there's no recorded loss of fuel cards at this time.

Senator GALLACHER: Are there any notifiable breaches of credit card protocol or policy? Actions taken?

Mr Prior : Yes. During the course of last year there were a number of credit card breaches which were referred through to the Inspector-General for investigation. They were investigated and then dealt with in an appropriate manner. Some were referred to the authorities, the police authorities and so on, for action.

Senator GALLACHER: Were they publicised?

Mr Prior : I believe the broad details of that are published in our annual report, as I understand it. Also we report on actions we take more generally in Defence publications to advise people that are looking at these matters and taking them seriously.

Senator GALLACHER: How many instances were reported to the Inspector-General?

Mr Prior : I'm looking for the reported amounts for last year. I have lots of other data, but I don't have that information in front of me, I'm sorry.

Senator GALLACHER: So can you give us—

Mr Prior : In my recollection it was less 20 events—even less than ten.

Senator GALLACHER: What was the highest figure involved in those 20 instances?

Mr Prior : So the total fraud loss for 2016-17—this this is total fraud, including credit cards—was $608,000. That's including credit cards. Credit card fraud was, in my recollection, less than $100,000 in total.

Senator GALLACHER: Former Secretary Richards used to have right at his fingertips the percentage that that was of the expenditure. He would insert himself into the report and say, 'That is 0.002 per cent of our expenditure.'

Mr Prior : Yes, it is.

Senator GALLACHER: So is this consistent with previous years?

Mr Prior : Yes, it is. It is 0.0019 per cent of the total Defence expenditure.

Senator GALLACHER: It's still $100,000. Was it 20 instances of $20,000?

Mr Prior : I don't have that information in front of me.

Senator GALLACHER: Can we have that on notice, please?

Mr Prior : Yes, you certainly can. We will give you the data.

Senator GALLACHER: The other $500,000 of fraud, can we get some explanation of that? How do you commit a fraud that's not credit card related?

Mr Prior : When we say fraud, that includes losses. People may take things that are not their own. People may gain access to monies for allowances which they're not entitled to. And so on.

Senator GALLACHER: Do you have any idea of the number of claims or cases that underpin the $500,000?

Mr Prior : No, I don't have that information.

Senator GALLACHER: Can we get both the number and the amounts, on notice?

Mr Prior : Yes, we can provide that.

Senator GALLACHER: What is the highest level credit card we now have in the Defence Force?

Mr Prior : The highest level credit card—no, I don't have that either.

Senator GALLACHER: There were some recommendations out of the Australian National Audit Report. I think we've been advised previously that the level of authority has been reduced.

Mr Prior : It has been certainly reduced. Any credit cards over $100,000 have to come to me personally for my authorisation. I will provide the information, but my recollection is that we've reduced all them down to somewhere in the order of where the highest one is about $500,000. They are usually in relation to purchasing activities that require multiple purchases and multiple actions by individuals. Can I go back to one of your questions? The loss for credit card fraud in 2016-17 was $54,155. That represents 0.009 per cent of total credit card expenditure. It represents 8.89 per cent of the reported fraud loss for 2016-17. So the credit card fraud activity is $54,000 approximately out of the $600,000 I quoted.

Senator GALLACHER: And we've been through another Operation Talisman Saber, and credit cards weren't used to pay $1.2 million worth of supplies, shall we say?

Mr Prior : I'm not aware of that happening, although we do use credit cards to make purchases in different parts of the world where we interface with organisations we don't have purchasing arrangements with.

Senator GALLACHER: There was a specific mention in the audit report of an officer spending the amount.

Mr Prior : Previously, but that activity doesn't occur now.

Senator GALLACHER: Thank you. We appreciate those things on notice.

Mr Moriarty : Just to let you know, a new fraud and corruption control plan which deals with both the corruption control strategies was brought into effect on 7 July this year.

Senator GALLACHER: Excellent. Could I ask some questions in respect to the use of contractors in a general sense. Maybe we've got the right person, the financial controller.

Mr Prior : It depends on what you want to know, of course.

Senator GALLACHER: A very broad question: what percentage of Defence's budget goes to expenditure on contractors?

Mr Prior : The budget for contractors for Defence in the current year is $97 million.

Senator GALLACHER: How does that compare with this time last year?

Mr Prior : We have been declining in our expenditure on contractors as a result of ongoing efforts to contain costs in that area.

Senator GALLACHER: So it's less than last year?

Mr Prior : Yes, less than last year.

Senator GALLACHER: Can we get a comparison from 2013—the line item up and down?

Mr Prior : We can do that.

Senator GALLACHER: $97 million or thereabouts—is there a rule of thumb about how many full-time jobs that would support?

Mr Sargeant : It depends. You can employ a contractor for half a day, a day, two days, three days. Our estimate is over a year we employ full-time about 2,000 contractors.

Senator GALLACHER: So that $97 million is underpinning 2,000 contractors, but you turn them on and off as you like?

Mr Prior : That's the nature of contractors. They are brought on board as required, on and off.

Senator GALLACHER: But you do some sort of economic analysis of whether it's efficient to have a contractor or have someone employed internally?

Mr Sargeant : We do. We have looked at the decision-making around contractors and revised it. We've done a couple of things. We've asked people to do a business case, a cost benefit analysis; in other words, to ask the question, why can't we have a public servant or ADF person do this work?

The other thing that we've done is raised the level of decision-making to make it harder for people to just hire contractors because it's simple or easy. That's one of the ways in which we're reducing the expenditure on contractors and the number of contractors we employ. But there are cases where we need contractors: they have skills that the organisation doesn't have or they have skills which it would be too expensive for the organisation to develop and sustain.

Senator GALLACHER: So we know—well, I certainly know from my involvement in the public works committee over a number of years—that Defence is able to ascertain what the profit margin is for tier 1 suppliers and major contractors they use. Are you able to ascertain in this area here what the profit margin would be for a contractor?

Mr Sargeant : We're in the process of looking at what we think is a reasonable return and we're asking people to look at the cost of contractors—that includes the on-costs that might go to profits—and, where possible, negotiate it down, reduce it or hire people who don't cost as much.

Senator GALLACHER: Fair enough. But you have an economic analysis, including the profit.

Mr Sargeant : Yes.

Senator GALLACHER: We've seen media reports you've investigated staff, and the claim is that they basically quit the department and took up contracting positions to their advantage. How many people in a year go from Defence and come back as a consultant or contractor?

Mr Sargeant : I don't have specific figures on that. It's a complicated issue because people do leave public service employment. They do go and work for other organisations and sometimes they're re-employed. We don't try to stop people from operating in a job market and we don't discriminate against people, but, as part of the process of making a judgement about whether a contractor should be employed or that work should be done by a contractor, we look at whether it should be done by a public servant. We try not to have a situation where we bring in contractors just to replace public servants.

Senator GALLACHER: Obviously, half the airlines in the world have had their pilots trained by an air force. It's a normal thing for people to get trained, do their time and move on. This is clearly like moving on with skills and expertise that's needed and then resurfacing in the role in probably an enhanced payment position. Have you or the department investigated to see if that is happening or not?

Mr Sargeant : That does happen, and we try to avoid that. But it's difficult to say to someone, 'You can't work in this job,' or, 'You can't sell your services.'

Senator GALLACHER: Would you have investigated a number of people?

Mr Sargeant : We don't investigate. What we try to do is ensure that people who make decisions about whether or not to hire contractors make good decisions that are sensible against some form of economic analysis and business case.

Senator GALLACHER: In the parliament ministers clearly can't take up roles in areas that they've made decisions on. You would have similar rules in Defence?

Mr Sargeant : Yes, for certain categories of employee there is a period of time where they're not allowed to be re-employed by Defence or work in particular areas, because of the knowledge that they have.

Senator GALLACHER: Is that protocol publicly available?

Mr Sargeant : I think it is available, yes.

Ms Bergmann : Yes, we've got quite a robust framework that looks after and manages potential and real conflicts of interest. There are regimes to deal with postseparation employment. There's detailed guidance that outlines how staff members are to avoid and also to manage those conflicts of interest, including in some cases exclusion periods.

Senator GALLACHER: And there are no instances of those rules being breached in the last 12 months?

Mr Sargeant : I'm not aware of any.

Senator GALLACHER: Is that your evidence?

Ms Bergmann : There's detailed guidance as to what staff members have to comply with regarding their obligations to declare potential employment opportunities, and our contracting templates go into significant amounts of detail covering conflicts of interest, ethical conduct and postseparation employment. As an example, our tenderers have to provide a deed of undertaking that requires them to warrant that tenderers have no actual potential or perceived conflicts of interest in relation to the RFT process. They have to declare that the tender hasn't been compiled with with the improper assistance of current or former Commonwealth personnel or Defence contractors and that tenderers have not and will not without prior written approval from the Commonwealth permit any current or former Commonwealth personnel or Defence contractors to contribute to the tender if the person was involved at any time in the planning of the procurement, the preparation or management of the RFT process at any time during the preceding 12 months that they were involved in the procurement process or any activity in relation to the RFT. If there's a breach by tenderers of this deed of undertaking, Defence has the right to exclude that tenderer from further consideration during the RFT process.

Senator GALLACHER: So have you had any people that have been investigated about a breach of these rules?

Ms Bergmann : I can't comment on—

Mr Sargeant : I'm not aware of any, but that's not to say there may not be an investigation that we're not aware of. It may be confidential investigation or something that's come in under public interest disclosure, but I'm not aware of anything.

Senator GALLACHER: Are you aware of allegations raised by people inside Defence about a breach of this area?

Mr Sargeant : No, nothing has come to me.

Senator GALLACHER: Who would investigate it if it did come up?

Mr Sargeant : It would be the audit executive, the head of our audit area, who has a fraud investigations branch within his division. They will investigate it. If it was really serious, it would go to the police.

Senator GALLACHER: You're not aware of or there are no companies or people facing sanctions?

Mr Sargeant : No, not that I'm aware of.

Senator GALLACHER: Thank you. On a matter of Defence contractors, I understand some Defence contractors faced court this year over an accident towing a Bushmaster.

Senator Payne: I will see if we can find someone.

CHAIR: While we're waiting for someone: Acting Chief, did you have some updates?

Vice Adm. Griggs : There are a number of things to update you on.

CHAIR: Well, we weren't quite quick enough. We've now got the person to answer Senator Gallacher's question.

Senator GALLACHER: I understand some Defence contractors faced court this year over an accident towing a Bushmaster. Can we be updated on the outcome of that case?

Air Vice Marshal McDonald : That outcome is still up with the courts at the moment, so I am loath to make any comment apart from the fact that we've been well engaged, Comcare is right across it and the contractor has been keeping us updated.

Senator GALLACHER: So are you aware of any other Defence contractors in the courts over the last year? Are there any other instances like this? Is this a one-off or has it happened on a regular basis?

Air Vice Marshal McDonald : Not to my knowledge.

Senator GALLACHER: Is it true there are two companies involved in this accident?

Air Vice Marshal McDonald : That is correct.

Senator GALLACHER: How many contractors do we need to tow a truck?

Air Vice Marshal McDonald : They were working together to try to help each other. That's what we would hope would happen. They were trying to help each other out.

Senator Payne: If this matter is still before the court and the decision is pending, I am more than loath to canvass the details of the matter on the public record.

Senator GALLACHER: All right. I'm only asking a question.

Senator Payne: I appreciate that.

Senator GALLACHER: I have quite a lengthy series of questions now, Chair, if you want to give Defence time to provide that update.

Vice Adm. Griggs : On the drone issue, we became aware on 9 August this year. The ministerial advice was provided on 10 August. There was a suspension to flight operations at that time. Some flight operations recommenced on 21 August. I think there are still a couple of areas of the organisation that have not recommenced flight operations with this equipment.

Senator GALLACHER: So, 24 hours after you were notified it was acted on?

Vice Adm. Griggs : Yes.

Senator GALLACHER: Thanks.

Vice Adm. Griggs : Chair, there was a question earlier about the SNAFU Facebook page. It was referred to our Joint Service Police Group on 1 August, and their investigation began on 3 August. There was a question earlier, I think from Senator Gallacher, about how many people were supporting Major General Brereton in the conduct of his rescoping inquiry. It is a team of seven dedicated IGADF inquiry personnel. Other specialist personnel assist on it from time to time on a required basis.

Senator GALLACHER: That would be a combination of reserve, full-time and all sorts of expertise?

Vice Adm. Griggs : I would imagine so. There were questions from Senator Kakoschke-Moore about the military justice system. CDF directed a series of actions to improve the efficiency and the efficacy of all components in the military justice system, and since early 2016 the Military Justice Coordination Committee has been progressively assuming responsibility in Defence for proposing high-level reform measures and coordinating the ongoing reform of the military justice system. There have been a number of activities: a review of the summary discipline system, which commenced in November 2016 and is reporting next month; efforts to improving the timeliness of completion of matters within the superior tribunal system, which commenced in October last year; and a range of possible legislative reforms, which are ongoing.

Senator GALLACHER: I want to move on to the centralised processing services. We want to see how that project is tracking. Is it true that the CPS is Australia's largest ever IT project?

Mr Sargeant : It may not be the largest, but it's one of the largest.

Senator GALLACHER: In response to question on notice 84, you advised that an additional $37 million had been allocated to the project. Is that the extent of the funding authorised, or have you sought more?

Mr Mohan : The $37 million was contingency that was allocated to the project. As we advised at the last estimates, $30 million out of the $37 million has been used as contingency. Since the last estimates, we have not dipped into any more contingency funding. The project is on track. It will deliver its full operating capability by the end of this year. It's on schedule, it's on budget and it will be delivered on time.

Senator GALLACHER: In your response, you stated that the $37 million was for 'unforeseen costs related to changes in Defence landscape, delivery and commercial challenges, and the impact of delays on final operating capability'. You're saying that is contingency?

Mr Mohan : The $37 million was on top of the approved funding, which is contingency. That is always calculated as part of the estimate. Out of the $37 million, $30 million was used and $7 million has not been used.

Senator GALLACHER: You also advised in question on notice 85 that 18 changes to the project had been authorised since September last year, including eight in the weeks after estimates. Is this an ongoing thing? Does the project change? Why are there these changes?

Mr Mohan : All changes to the original contract are governed by a governance mechanism, which we provided as part of the response to the questions on notice. That is a formal governance mechanism. The project has a governance mechanism. Everybody goes through the integrated investment plan and the Investment Committee. I think there are two elements to this. There are statements of work that you mentioned last time. Leidos, as the prime contractor, will deliver the centralised processing transformation program. But, as an incumbent infrastructure provider, we will be raising statements of work on them to provide infrastructure services on a project-by-project basis. Each project will ask Leidos to spin up some infrastructure as it happens. So there are two different things.

Senator GALLACHER: There appeared to be some changes after we asked questions at estimates. It's noted that six of these changes involved price variations. What was the total value of the 18 changes you made? Is that quantified?

Mr Mohan : I will take that on notice. Since the last estimate, there has not been any price change, to the best of my knowledge.

Senator GALLACHER: So would you break down the value of those changes?

Mr Mohan : Yes, I will. And I will get back to you.

Senator GALLACHER: Are any of the changes as a result of delays in the project deliverables?

Mr Mohan : No. As I said, there has been no change or price increase since the last estimate. That's my understanding. If there is, I will take that question on notice and get back to you.

Senator GALLACHER: There were reports in July that the project had been delayed. What is the nature of those delays? How have they affected the project?

Mr Mohan : The original final operating capability was meant for quarter 1, 2017. Then the advice of that will be delayed until quarter 4 of 2017. So there's been a delay of nine months—that is three quarters. It is advised that is due to several reasons. And since that change was advised there's been no further delay in achieving the final operating capability.

Senator GALLACHER: Were any of the delays relating to the deployment of a private cloud and migrating application?

Mr Mohan : The overall project is, in fact, to have Leidos act as a private cloud provider and migrating application. So any change that is advised originally would have to do with the environment—and I'm not fully across all of this. I'm happy to get you some details. But, as I said, since the last there has been no other estimate, changes, scope increase or cost increase.

Senator GALLACHER: Obviously, this is—or certainly for me—quite a complex project. So how does Defence measure and track this project? Are there KPIs which the supply is held against?

Mr Mohan : Absolutely. There is a stringent governance mechanism. There is a weekly program meeting. There is a monthly steering committee meeting. Personally, myself and the senior executives talk with the suppliers' executives regularly. We keep track of the number of servers, number of environments, number of data centres, number of applications migrated on a regular basis.

Senator GALLACHER: So you have weekly and then monthly—

Mr Mohan : And quarterly reviews of all this.

Senator GALLACHER: where you hold Leidos Australia accountable to KPIs?

Mr Mohan : Yes.

Senator GALLACHER: Are they doing well? Are they meeting their KPIs?

Mr Mohan : Since the last delay, which was announced at the beginning of the year, the project has been going on track and the vendor has been delivering as per what we asked them to.

Senator GALLACHER: So prior to 'on track' was it not on track?

Mr Mohan : As I said, initially there were a lot of complexities associated with this program. Defence ICT is a complex environment. Any vendor who comes to take these things will find there have been things that they could not have discovered when they originally signed the contract.

Senator GALLACHER: Your evidence today is that it is now on track and they are meeting KPIs?

Mr Mohan : It is absolutely on track—yes.

Senator GALLACHER: Are there any penalties if they don't make KPIs?

Mr Mohan : There will be as part of standard contractual arrangements. I don't know all the details about the contracts that are signed, but, normally, there will be.

Senator GALLACHER: Are there, for argument's sake, financial penalties if they don't make their KPIs?

Mr Mohan : Absolutely. There will be.

Senator GALLACHER: Have any of those penalties been applied?

Mr Mohan : Not to my knowledge so far.

Senator GALLACHER: So if they miss KPIs or milestones there are penalties, but none have been applied?

Mr Mohan : Contractually, there will be. I don't know the details of these penalties. To my knowledge, we have not applied any penalties so far.

Senator GALLACHER: On notice, perhaps if we could just get a description of the nature of the penalties. Does Mr Jack Walker still work at Leidos?

Mr Mohan : I'm sorry, Senator, I'm not aware of the employees of Leidos and who works and who doesn't work at Leidos.

Senator GALLACHER: That's probably something to take on notice. This is probably to the minister: have any ministerial staff moved from the Defence minister's office or the assistant minister's office to Leidos, Minister?

Senator Payne: I can only answer for my own office, and the answer is no.

Senator GALLACHER: Can you take on notice if any of Minister Pyne's people have moved?

Senator Payne: If you wish.

Senator GALLACHER: Did Mr Walker work in Minister Pyne's office?

Senator Payne: I believe so.

Senator GALLACHER: I understand Leidos Australia won a database deal in the Falkland Islands this year. Has Defence awarded Leidos or any of its subsidiaries any new work since May of this year?

Vice Adm. Griggs : We'll take that on notice.

Senator GALLACHER: Is Leidos or any of its subsidiaries currently bidding for any new work with Defence?

Vice Adm. Griggs : We'll take that on notice.

Senator GALLACHER: Given scheduled budget experience in this centralised processing services project, are they a preferred supplier? Have they met their KPIs?

Mr Sargeant : The company that was originally awarded the contract was Lockheed Martin. Lockheed Martin IT was sold to Leidos. Leidos became the managing contractor. This is a project that has actually gone pretty well. As Mr Mohan said, we will delivery broadly on schedule and within budget. It's the major underpinning element of the ICT transformation strategy. We manage it closely, but it's not a project which we see as in trouble by any stretch of the imagination.

Senator GALLACHER: Could I ask some questions about projects of concern? We normally get an update on projects of concern prior to the estimates briefing. Is that—

Senator Payne: It has been sent. I'm not sure where it is, but I know I saw a brief on that and signed it, so it's somewhere.

CHAIR: It's in the emails.

Senator GALLACHER: We have some questions about the Tiger fleet.

Mr Gillis : If you want to go to the specifics, I can get the appropriate general to the table.

Senator GALLACHER: We're advised that there were reports in August that the fleet was grounded due to Airbus deeming the system unsafe after a German Tiger crashed while on operations in Mali. What did Airbus say about the Tigers that led to the fleet being grounded?

Mr Gillis : I'll ask the Chief of Army and Major General Mathewson to answer those questions.

Major Gen. Mathewson : Yes, that's quite correct. Very sadly there was an accident in Mali involving a German Tiger helicopter which resulted in the death of both pilots. As a result of that accident, whilst we are still engaging with our industry partners and the German government, we have an operational pause until we can get answers to our questions.

Senator GALLACHER: Do we know what Airbus is saying specifically? Is it a lack of safety or an unsafe system?

Major Gen. Mathewson : No, not exactly. At the moment, we're still working with—

Senator GALLACHER: So it is a precautionary thing?

Major Gen. Mathewson : It is indeed.

Senator GALLACHER: The fleet is still grounded?

Major Gen. Mathewson : It is at the moment. There's an operational pause.

Senator GALLACHER: Do we have any indication as to when it's likely to start operating again?

Major Gen. Mathewson : I can't give any indication today.

Senator GALLACHER: Are other countries all grounded or are they flying their fleets?

Lt Gen. Campbell : As regards to when, we believe it might be in a matter of weeks, but I am awaiting advice from the forces' commander, Major General McLachlan, on that issue. And I just ask that the technical term that we should all be using is that their operations have been 'paused'. There is a specific definitional meaning to the word 'grounded' which isn't relevant in this case. We have sent a qualified Tiger test pilot to Germany, greatly and positively achieved by the Germans, to assist in their work in the investigation of the accident, and we are liaising very closely with other Tiger user partners as well as manufacturers on the issue. There are a couple of issues still at play, and the investigation remains open but we think we're coming to the end of the pause.

Senator GALLACHER: So if we get to the end of the pause, would that mean that the Tigers can fly on LHDs?

Lt Gen. Campbell : That's a different issue. Let me just note that, while the pause is in play, our people have been very actively using our simulator capability and also working on some other helicopter types to maintain general aviation skills. The question of their deck landing qualification for LHDs is something that would be more appropriate to refer to Chief of Navy but, fundamentally, there is no issue why, once deck qualified, our helicopters cannot be operating with LHDs in appropriate conditions for helicopter operations.

Senator GALLACHER: At the end of the pause, will they be able to fly over built-up areas? Will they be able to fly at night and will they be able to fly in all-weather conditions?

Lt Gen. Campbell : We don't expect that will be any change to the open flight envelope in which they can currently operate.

Senator Payne: If you wish to ask further about the matter in relation to LHDs, Chief of Navy is there.

Senator GALLACHER: Can they fly off LHDs?

Vice Adm. Barrett : They have a clearance from the first of class flight trials but, as the Chief of Army has indicated, they will go through a progress of confirming their deck qualifications to be able to do that.

Senator GALLACHER: So these are due to be retired in 2025. Is that right?

Lt Gen. Campbell : The mid-'20s is the indicative period indicated in the white paper.

Senator GALLACHER: It would be fair to say that there's a long history of recorded problems with this particular aircraft and now the whole fleet is paused.

Lt Gen. Campbell : Look, I actually don't think that's fair to say. I think it would be more accurate to acknowledge it's a highly sophisticated aircraft, which has had introduction-into-service issues at play, but is extraordinarily manoeuvrable, very, very sophisticated and capable surveillance and weapons systems and it is a lethal helicopter in an operational setting—as in, lethal to our enemies.

Senator GALLACHER: I understand your support for this particular helicopter, but the facts remain. Have we ever used the helicopters operationally?

Lt Gen. Campbell : Like the Mirage, not yet.

Senator GALLACHER: So we've never deployed them overseas?

Lt Gen. Campbell : No, we haven't. But I think that that's not necessarily the right way to look at military capability. You ought be more interested in being able to meet the challenges of the future necessarily than acknowledge the successes of the past which haven't required their deployment.

Senator GALLACHER: How do our troops and other elements of the ADF train with the capability, if it has limitations and is currently paused? What do we in place of it?

Lt Gen. Campbell : When it is currently on an operational pause, in some circumstances our training can be progressed through simulation and, in other circumstances, it is a factor to consider but is not present in our training environments.

Senator GALLACHER: So, in your view, there is no capability gap?

Lt Gen. Campbell : Currently, there is, because we're not flying it. But, once it returns, while, yes, it has caveats in regard to the envelope of capabilities it can operate for us, it is an extremely advanced attack helicopter. And I do think it receives an unfair press—well, let's say, an imbalanced press.

Senator GALLACHER: You're the person who judges the capability of these things; I would have no idea what it can do—I'm just asking these questions. When we first selected these helicopters, have we been able to achieve the full range that was envisaged for their capability?

Lt Gen. Campbell : No, we haven't, and I think that that more accurately reflects on an aspiration, or an expectation, that was unrealistic.

Senator GALLACHER: Back in estimates in May, we asked a number of questions about the hours flown and cost of the Tiger helicopter—the question about the flying hours has come back; the cost breakdown has not. However, information from some years ago suggests that these helicopters cost somewhere in the order of $30,000 an hour to fly. Is that an incorrect or inaccurate figure?

Major Gen. Mathewson : No In fact, a number of years ago, the cost of ownership approached $43,000 per flying hour. Subsequent to that, there's been some good work done by Defence and industry to reduce the cost of ownership. So we're now sitting on an average of around $31,000 per flying hour. I should point out that, in articulating that value, that's a very crude calculation which is a reflection of the industry support that we seek divided by the hours that we fly. With the Tiger capability, we've outsourced a vast amount of work to our industry partners from maintenance, engineering, the management of the fleet, all of the training, the maintenance on the aircraft that are used for training in their facilities. So, in terms of the cost of ownership, it's appears—and it is—higher than we would prefer, but it is not as high as it might be perceived to be.

Lt Gen. Campbell : I would also add that an attack helicopter, of all the forms of helicopters that might be in an army's rotary wings aviation fleet, is the most expensive of our helicopters, and of anyone else's helicopters, to operate.

Senator GALLACHER: You would be aware that a taxpayer could compare that with the cost of operating an A380, with 500 passengers and 24 crew, and get away with about $20,000 an hour. It's a very expensive—

Senator Payne: I'm not sure we've got apples and apples there, Senator.

Lt Gen. Campbell : They have fundamentally different capabilities.

Senator GALLACHER: These comparisons have been made, Minister; that's what I'm saying.

Lt Gen. Campbell : But they are meaningless.

Senator Payne: They're not apples and apples.

Senator GALLACHER: In terms of what you get for value for money.

Senator Payne: In fact, they're not even helicopters and helicopters.

Senator GALLACHER: We've got the Tiger, and it's on the books till 2025. Is it likely to get more expensive or cheaper to fly?

Major Gen. Mathewson : Given the work that's been done, we would expect the cost of ownership, as discussed, to be stable. We'd work with industry to try and reduce those costs. Typically, as a product ages, it does become more expensive because components become obsolete and have to be replaced.

Senator GALLACHER: Once this pause is over, are we likely to see an increase or a decrease in flying hours?

Lt Gen. Campbell : Across the financial year, because of the pause that has occurred, it's reasonable to expect that there would be a reduction in the total number of hours flown versus the total number of hours expected to be flown. In return to flying, there will be a ramp-up of the hours for each of our pilots as they return to their full certifications and build back the fluency of their flight skills. Then we'll go into a plateau phase. But you can't end up at the end of the financial year with what you expected when you've basically taken a couple of months out of flying.

Senator GALLACHER: Fair enough. To move on to the OneSKY project: is anybody able to inform the committee as to why that's been elevated to a project of concern?

Vice Adm. Griggs : Senator, the short answer to the question as to why it was placed in the projects-of-concern list in August is that negotiations were taking longer than expected, and the costs were increasing significantly, and the schedule was not being achieved. That's the short answer. Admiral Dalton may have more to add to that, but, in a nutshell, that's why it's a project of concern.

Senator GALLACHER: I think we were informed through another committee that the result was that there was only one successful tenderer, but they were deemed to be not value for money to the Commonwealth. Is that a correct assertion of why we ended up in that process?

Rear Adm. Dalton : I've retained functional responsibility for the Defence element of the OneSKY program. There were a range of tenderers responding to the request for tender that was released by Airservices, and the current tenderer that we're negotiating with, which is Thales Australia, was the preferred tenderer out of that process.

Senator GALLACHER: Were they deemed not to be value for money? Was that an assessment made? I thought that came out of a National Audit Office report.

Rear Adm. Dalton : No, there was a process where their tender was the preferred tender that went through another negotiating phase. In June last year they submitted an offer based on their original tendered offer that had gone through a further negotiation phase, and the assessment of that offer in June last year was that it didn't represent value for money. There has been a degree of work done on that offer with Thales in the intervening period. That culminated with a revised price being offered by Thales last month, and that is currently under assessment.

Senator GALLACHER: It's obviously quite a groundbreaking project, as I understand it, combining military and civilian control. Are they the only people who can actually deliver this outcome you want, and is the only problem the price? Is that how it works?

Rear Adm. Dalton : They were selected through the result of a competitive process, so clearly there were other offerers in the world who felt that they could put in a reasonable tender, and four others did. The Thales offer was selected through that process as the preferred tenderer. There has been a degree of negotiation with Thales beyond that. None of the tenderers were fully compliant with what Airservices, as the lead agency, were requiring. There's been a negotiation to improve the degree of compliance in the Thales offer. As I said, in June last year, the result of some of those negotiations when they came back with a price to be more compliant didn't represent value for money, and Airservices, with Defence in support, have been working with Thales since then to improve the value for money. Airservices got a revised price from Thales last month. That's currently under assessment.

Senator GALLACHER: I think—because we've had a little bit of interaction with Airservices in another committee—that they're not under the same budgetary constraints as you are in some respects, because all of their costs can be passed back to the travelling public and/or the airlines, whereas you've got a finite budget, from which I think you'd allocated funds against this project. How have you gone there? Are you in the process of allocating more money to this project? I think it was $414 million that was in the original—

Rear Adm. Dalton : The project received second-pass approval from government some time ago now, and that has a budget that was approved as part of that process. Our contribution to the overall OneSKY program may need to increase, and we have made some allowances in the revised Integrated Investment Program to accommodate for that increase. Our negotiations with Airservices have said that that's a finite amount of money that we're prepared to increase, and part of the discussions that we've had with Thales through the project-of-concern process has made that abundantly clear to Thales.

Vice Adm. Griggs : That's subject to government approval.

Senator GALLACHER: Is it true it is a world first, so to speak, to combine military and civilian air traffic control under OneSKY?

Rear Adm. Dalton : It is certainly a world first on the scale that's being done in Australia. It will cover 10 to 11 per cent of the world's surface under one integrated, harmonised, air traffic management system, and that is a world first.

Senator GALLACHER: Is there any intellectual property that might derive value back to the Commonwealth in the successful creation of this?

Rear Adm. Dalton : There are certainly elements of the program that we've discussed with Thales about: if and when they are successful and Airservices move into contract with them, if they then onsell that to other customers, would there be a return to Australia? That's part of the negotiations that we're having with them.

Senator GALLACHER: Given these sorts of difficulties you're having at the moment, is the time frame slipping by months or years? Can we still achieve some project deadlines there?

Rear Adm. Dalton : Certainly the time frame has slipped. That's been part of the issue, and that's why it's been elevated to a project of concern, but inside our budget we have some allowances to cater for the obsolescence that's emerging in the current defence system. That clearly is a concern for us, and there is a finite amount of time that the process can go on before we have to look at alternatives.

Senator GALLACHER: Is there an alternative though? Can we maintain the status quo, or do we need to go down this path?

Rear Adm. Dalton : There clearly is a risk with obsolescence to the current defence air traffic management system that needs to be managed.

Senator GALLACHER: I understand that, when it's elevated to a project of concern, other ministers become involved. Does that include the industry minister as well? I think I heard that in one project of concern, where the industry minister was involved.

Senator Payne: Sorry, Senator?

Senator GALLACHER: Which ministers are involved in projects of concern? Is that a defined role, or do you add other people in?

Senator Payne: It depends on the project.

Senator GALLACHER: In this project, who would be the additional ministers?

Senator Payne: The Minister for Infrastructure and Transport and the Minister for Defence Industry and myself.

Senator GALLACHER: I have heard of a project of concern where Senator Sinodinos's portfolio was involved as well.

Senator Payne: A Defence project of concern?

Senator GALLACHER: It may not have been, actually.

Senator Payne: Yes, I'm not familiar with that one, but it does depend on the circumstances of the particular matter that is being dealt with.

Senator GALLACHER: Okay, thank you.

Senator ROBERTS: Thank you to those attending today. Minister, do you know of mefloquine?

Senator Payne: Mefloquine? I do, Senator.

Senator ROBERTS: What do you know about mefloquine?

Senator Payne: I know that it is part of a very broad range of treatments which have been used in relation to malaria prevention. I know that there are a number of serving and former serving members who have raised concerns about mefloquine. I cede to Vice Admiral Griggs, as a person with much greater knowledge than I have on this matter.

Senator ROBERTS: I'll address my questions to the Vice Admiral. Is it not true that during the Australian involvement in East Timor, a substantial number of ADF members were signed up for a drug trial program for antimalarial drugs from the family of drugs, including mefloquine, tafenoquine and quenalin?

Vice Adm. Griggs : Tafenoquine and mefloquine are not in the same family of drugs.

Air Vice Marshal Smart : They are both antimalarial drugs, but they are a different classification.

Vice Adm. Griggs : It is important to make that point, Senator.

Senator ROBERTS: Can you explain how?

Air Vice Marshal Smart : I don't have time for a biochemistry lesson, but they are different types of drugs that work in different ways as antimalarials and for the treatment of malaria. There was a series of studies done using mefloquine and tafenoquine in various iterations over that period of time.

Senator ROBERTS: Is the drug mefloquine designed for people already afflicted with malaria or as a preventative?

Air Vice Marshal Smart : It is used in both situations. It is used as both an antimalarial and also in treatment of malaria.

Senator ROBERTS: Are other side effects articulated on the drug packaging related to children only?

Air Vice Marshal Smart : Not to my knowledge. There are side effects that are listed for adults as well. These are well documented in the scientific literature, as well as in the product packaging for this particular medication.

Senator ROBERTS: I have been informed that the side effects articulated on the packaging are related to children only. Can it be said that the ADF members who signed consent forms were giving informed consent in the true sense of the word?

Air Vice Marshal Smart : Yes, I believe they were giving informed consent. There was a very detailed and meticulous consent form; it was about four or five pages long. There was a series of briefings that were done as well. Of course, there has also been an Inspector General ADF inquiry looking into the conduct of these particular trials that found there was no evidence of any ethical breaches in the conduct of the trials.

Vice Adm. Griggs : In fact, he found that the trials were conducted ethically in accordance with both the Australian Defence Human Research Ethics Committee approved protocols and the National Health and Medical Research Council national guidelines.

Senator ROBERTS: Is one of the outcomes of this trial that more ADF members and veterans from East Timor have presented with more PTSD symptoms per capita than those who served in Vietnam?

Air Vice Marshal Smart : No, there is no evidence of that.

Senator ROBERTS: None at all?

Air Vice Marshal Smart : No.

Senator ROBERTS: Hasn't there been a high suicide rate amongst East Timor veterans? Is it now believed the drugs cause physical damage to the brain?

Air Vice Marshal Smart : There isn't, to my knowledge, high evidence of suicide specifically for Timor veterans. I think the issue of suicide in Defence has been well discussed. The incidence in serving members of the ADF is 53 per cent lower than that of the general population, age matched.

Senator ROBERTS: Say that again, please?

Air Vice Marshal Smart : The suicide rate in current serving members—so those still in Defence—is 53 per cent lower than that of the general population, on an age-matched basis.

Senator ROBERTS: And in the veteran community?

Air Vice Marshal Smart : It is 14 per cent higher in the veteran community. But when it's broken down, it depends on age and different parameters, but over all it is 14 per cent.

Vice Adm. Griggs : One of the things we did in response to concerns raised about mefloquine was to examine—because we don't have the ability to examine the data of former serving members who have tragically committed suicide—or to analyse, up until recently, 129 ADF members who had committed suicide between 2000 and August this year, so about 16½ or 17½ years. Out of that 129, only two of those are recorded to have taken mefloquine, and in both of those circumstances that was at least 15 years prior to their death. What we were looking for, as we were responding to these concerns that were being raised, was: was there any evidence in the data set that we had that could point to a connection between mefloquine and suicide? We don't believe on the data that we've been able to analyse that anyone can make that claim.

Senator ROBERTS: Would we be able to look at the data?

Air Vice Marshal Smart : The suicide database is confidential because it lists the people's names.

Senator ROBERTS: I didn't mean the raw data; I mean the aggregated numbers that Vice Admiral Griggs was discussing.

CHAIR: Senator Roberts, are you nearly finished?

Senator ROBERTS: Yes, nearly. I've got another two series of questions here. We might come back once we've seen that aggregated data. Minister, given that Senator Burston provided a wealth of new information to you and others on 4 August 2017 on the topic of recognition of service for the members of the ADF who served at Rifle Company Butterworth between 1970 and 1989, have you evaluated that information?

Senator Payne: I understand that that particular matter is being dealt with by Minister Tehan. I'm very happy to check with him on that.

Senator ROBERTS: You handed it to Mr Tehan?

Senator Payne: I think I actually answered the question representing Mr Tehan on that particular day, if I recall correctly—I stand to be corrected, of course. I will follow that up with Minister Tehan.

CHAIR: Is this an issue better pursued later on this evening with the Department of Veterans' Affairs?

Senator ROBERTS: Perhaps.

Senator Payne: It's a service recognition question.

Vice Adm. Griggs : It's the nature of service recognition.

Senator Payne: I think Minister Tehan, having been provided with that evidence, is reviewing that. That was the undertaking I made to Senator Burston at the time. I've also been approached by constituents myself, and I included them in that representation to Minister Tehan.

Senator ROBERTS: Is this not the longest deployment to a hostile environment in Australian history?

Senator Payne: The nature of the service is, in part, as I outlined to the chamber that day. In terms of the further detail—that will be considered by Minister Tehan.

Senator ROBERTS: Did not over 9,000 members of the ADF serve in Rifle Company Butterworth during the Second Malayan Emergency from 1970 to 1989?

Senator Payne: I don't have those numbers with me, but I'll act on the presumption that your material is an accurate representation.

Vice Adm. Griggs : We have worked this issue very hard for a very long period of time. As the minister said, we're analysing the latest information. But, consistently in the past—on the information that we've had—the appropriate periods of service at Butterworth have been recognised, depending on the situation. But the situation for most of the seventies, eighties, nineties and now is: it was peace-time service.

Senator ROBERTS: I'm told that they satisfied all the conditions of war-like service. In fact, several members of the deployment lost their lives, and some troops were activated to evacuate the Saigon Embassy at the end of the Vietnam War.

Vice Adm. Griggs : We're looking at the latest information. The point I'm trying to make is that we have put a lot of effort into this over the years and we have a reasonable body of knowledge. We'll look at the new information and advise ministers.

Senator ROBERTS: Vice Admiral, with respect, I and other people have had complaints from former servicemen and also active servicemen and servicewomen who are serving today, and they don't have the faith in the Department of Defence and the Department of Veterans' Affairs. That's what they keep telling us.

Senator Payne: As I said, Minister Tehan is reviewing this and has taken the substantive material provided to him by Senator Burston. If I can assist by taking your further questions on notice, I'm very happy to do that and provide those to Minister Tehan as well.

Senator ROBERTS: Thank you. Just on a related matter—

CHAIR: Is this the final—

Senator ROBERTS: This is my final question: I'm advised that Defence's most recent internal survey, which apparently was detailed in answer to questions at the last round of Senate estimates, found that less than half of males in the Australian Army had confidence in the strategic leadership decisions of the senior commanders of the Australian Defence Force. Is that true and, if so, can you explain why?

Vice Adm. Griggs : I haven't got the exact breakdown of the data. But historically in the YourSay survey, that particular question—

Senator ROBERTS: Which survey, sorry?

Vice Adm. Griggs : It's called the YourSay survey. Historically in that survey, that particular question from an ADF perspective lands at around the 45 to 50 per cent mark regardless of service and the longitudinal piece there.

Senator ROBERTS: So we're happy with less than half?

CHAIR: I'm surprised by that answer.

Senator ROBERTS: I would have thought it would be very important to fighting capabilities to have much confidence right throughout the military in the senior leadership.

Vice Adm. Griggs : Of course it is. As I said, it reflects a long history in those survey results. It's something that we look at each time and that we try and work on. But I don't think it's actually that surprising a result, to be honest.

CHAIR: Thank you.

Senator GALLACHER: We're heading up to procurement and the operation of assets after we've procured them. Can someone come to the table and update us on HMAS Canberra and HMAS Adelaide?

Senator Payne: The Chief of Navy will do that. HMAS Adelaide was particularly well received in the Philippines, where I was yesterday, on its recent visit as part of the joint task group Indo-Pacific Endeavour, including a visit from my counterpart, the Secretary of National Defense, and indeed the President himself.

Senator GALLACHER: I think everybody's well received in the Philippines, having been there last month.

Senator Payne: They do smile a lot and they do have as their policy, 'It's more fun in the Philippines'. I guess that's a good start!

Senator GALLACHER: We know from media reports that both Adelaide and Canberra had a reasonable amount of time docked at Garden Island. Can we get an update about that? They were in there for a while. It was public.

Vice Adm. Barrett : I reported at the last estimates in May that we made a decision to return both LHDs to Sydney because we had an issue with the propulsion pods—one evident in Canberra and one that we thought might be occurring in the other of the ships. That was in March. We then set out a plan to discover what the issue was and a remediation plan to make sure both ships would return to service. We said at that time, and at estimates I said, that we would review Adelaide in the dry dock and we would check the pods and determine what the issue was. We did that. We also said that concurrently we would prepare Canberra to participate in Exercise Talisman Sabre to prove the amphibious capability of which she is part and that which we've been building up to for quite some time. We did that. She participated in that exercise.

We then said we would bring Adelaide out of the dock and we would prepare her to be part of Exercise Indo-Pacific Endeavour 17. We did that and she sailed in September. She remains deployed on that exercise and will return in November, successfully operating with five other ships from the Navy—we heard about that this morning as part of the opening statement. While she was doing that, we said we would put Canberra into the dry dock to conduct the same repairs on her that we had learned from Adelaide when she was in dry dock. We did that. Canberra is now out of the dry dock and is currently preparing to requalify herself and her crew to be able to continue her operations.

In part, we set out a plan in May and we've conducted everything we said we would do. As a result, we know a lot more about the ships themselves. We've conducted the things that we said we would do in terms of exercises and operations. In the process of doing that, I would also acknowledge that much work to restore them, through the remediation plan, was done to the efforts of the three companies involved, BAE, Navantia and Siemens. I mentioned that because I mentioned those three companies at the start of the process when I said we needed to work together to be able to fix it. So I thought—at the time mentioning that they were part of the issue that needed to be resolved—it's appropriate that I mention that they all worked together exceedingly well for us to be able to get through the remediation plan, and I would argue that is a very good demonstration of Defence and industry working as one to resolve the way we will have to work well into the future.

Senator GALLACHER: So it's very clear the Adelaide, as the minister said, was in the Philippines and Singapore recently. What's particularly happening with the Canberra?

Vice Adm. Barrett : Canberra is alongside, as I said. She's out of the dry dock. She went in for scheduled maintenance, as I said. She came out on the date we said she would. She has been conducting her preparations alongside for what we call the maritime skills evaluation. She will go to sea and will resume her duties.

Senator GALLACHER: So all issues are resolved or are we still testing?

Vice Adm. Barrett : She will be conducting some tests when she goes to sea. We know a lot more of the problem that brought both of them to need to go into dry dock. We will, as you would expect, continue to monitor both of those ships to confirm that what we said was needed to be done has actually resolved all the issues. But I am very comfortable and confident that we took a deliberate and disciplined approach to this, and that we demonstrated what we would call seaworthiness and we have been able to produce the exercise and operational plans as we said we would throughout this year.

Senator GALLACHER: Were there any restrictions placed on the vessels after they left, in terms of speed, what they carry or capability?

Vice Adm. Barrett : Whilst Canberra was conducting Talisman Sabre, before she went into the dry dock for us to look at the pods, there were some restrictions we placed on her. None of those restrictions prevented her from conducting the amphibious operation Talisman Sabre. Both ships we are looking at to see whether there are—I won't say speed, but range restrictions we need to continue to monitor. As I said, we will do that for both ships when they come out of this period of remediation.

Senator GALLACHER: So were they speed restrictions?

Vice Adm. Barrett : It's speed within a narrow range. I won't go into where and how much, but neither of those—

Senator GALLACHER: They still carry a normal complement of cargo?

Vice Adm. Barrett : Yes. And, more importantly, I think they've demonstrated it very clearly in the operational sense around IPE, around South-East Asia at the moment, but also very clearly in what they were asked to do in Talisman Sabre, where they carried a substantial load and with the watercraft and their aircraft, they've conducted what has been the most significant amphibious landing practice that we've done in decades.

Senator GALLACHER: What has been the impact on your proposed operational plan? You would have had a schedule of hours of operation, and presumably that was disrupted?

Vice Adm. Barrett : It was, and I mentioned that at the last estimates. We are rejigging our plan to show exactly what we now have to prove, which wasn't proven during Talisman Sabre. What we are finding is that, with the astute use of HMAS Choules at the time, we did accomplish much of what we thought we would do with two LHDs, but there still are a few matters that we will seek to demonstrate so that we are able to show government we have the full capability we said we would produce.

Senator GALLACHER: I think the government came out and said there was no loss of operational capacity with the other ship that was used—Choules, was it?

Vice Adm. Barrett : HMAS Choules, yes.

Senator GALLACHER: We would be able to quantify how much time out of commission, how many hours or days?

Vice Adm. Barrett : If we measure it in terms of sea days, we anticipated that we would sail a certain number of sea days in this calendar year. Clearly, we will not achieve that. I did respond to a question on notice on those and I indicated how many days we sailed last and this year. It was a bit like the question earlier answered by the Chief of Army, it's very much like that operational pause he mentioned with the Tiger; there are some sea days we just will not be able to catch up, because the ships were in dry dock.

Senator GALLACHER: Fair enough.

Vice Adm. Barrett : But we have still been able to meet all the requirements that we said we would in terms of operational and exercise effect.

Senator GALLACHER: Well, it's amazing in the Defence arena how many experts—either self-appointed or legitimate experts—there are, and they all have ways of getting their views somewhere or another. Is this embarrassing to Defence, that you had two really good pieces of kit and you couldn't get it into Talisman Sabre.

Vice Adm. Barrett : I've been asked that before, and my answer is no. I was not embarrassed but I was certainly frustrated. Both of these ships are two years into a 30-year life. They're in their test-and-evaluation period. I expected that we would find issues along the way. We did. We fixed it. And they're now back doing what they were expected to do. Will we find other issues? I have no doubt. That's the nature of how you operate a Navy. The trick is to demonstrate that you can remediate and produce what's required. I think in this case that's exactly what we've done.

CHAIR: Senator Gallacher, I might just announce our agreements. I just wanted to let the room know that Defence Housing Australia and the Australian War Memorial will not be required. Opposition senators will be putting their questions to you on notice, so we look forward to a 100 per cent response rate. We will come back with Defence after we break for the hour, until 7.30, with the aim of heading to veterans' affairs at around 9 pm, noting that there will be lots of questions on notice. Thank you, Senator Gallacher.

Senator GALLACHER: Last estimates, you advised that each of the LHDs had spent 118 days at sea in 2016.

Vice Adm. Barrett : I think that was the question on notice, Senator.

Senator GALLACHER: I think in response to a question on notice, Defence further noted that the LHDs had spent just 42 days for HMAS Adelaide and 19 days for HMAS Canberra by 30 May this year. Since that date, what's the operational tempo then? So 30 May, we were 19 and 42.

Vice Adm. Barrett : Without the exact days, Canberra has, as I have indicated, participated in Exercise Talisman Sabre. That was an evolution of more than six weeks, I believe, in total. And Adelaide is now on what we would say is, I think, about an eight-week deployment. She's still there doing that. But Canberra will sail before the end of the year as well. To provide a more accurate figure, calendar based, I would have to wait until another two months.

Senator GALLACHER: Was one of the ships escorted to Talisman Sabre by a tug?

Vice Adm. Barrett : Not to my knowledge, no.

Rear Adm. Grunsell : No, that's not the case. Canberra participated in Talisman Sabre and was not escorted by a tug there.

Senator GALLACHER: Has any of them been escorted by a tug in the last 12 months?

Vice Adm. Barrett : We've had a—I'm trying to think—

Rear Adm. Grunsell : In March, when the initial problem occurred in Canberra, off the coast of Queensland, as a precautionary measure a commercial tug was engaged to shepherd the vessel down the east coast back into home port.

Vice Adm. Barrett : That was at the time where we still did not know what the issue was. So, as Admiral Grunsell has said, that was a prudent measure that we employed to make sure there were no issues. It was the issue in Canberra that prompted us to look at both ships to confirm we had an issue. At the time, it was significant enough for us to say we needed to be assured that we could bring back the ship safely. And, in the event, she came back safely under her own steam or under her own pod.

Senator GALLACHER: So there's no issue with the maintenance regime in respect to these ships? Has that been ruled out as a cause of the dry docking?

Vice Adm. Barrett : The specific issues that we found—and I think I mentioned this in some detail during estimates—we found two particular issues. One was around the migration of oils and fluids, between seals within each pod. We also had a view that there was a worn bearing and that that was producing various material that was migrating throughout the pod as well. When we put Adelaide in, we discovered that indeed was the case, and, as a result of that, we replaced a bearing and seals. Then, in the case of Canberra, we confirmed whether they had a similar issue. The migration of fluid was similar, which was a seal issue, but there was a lesser issue around the bearings.

Rear Adm. Grunsell : Zero.

Senator GALLACHER: So we've got to the problem of what caused the docking of these vessels?

Vice Adm. Barrett : In gross terms, we've got to the cause of it. That said, we have taken a cautious approach since, and we will monitor both vessels over a period of time. As I said, there are other issues that we would seek to look through with the ship during this test and evaluation period to confirm that we have resolved all the issues we need to—noting that this is two years into a 30-year life.

Senator GALLACHER: Have you been able to quantify the cost of the resolution of this problem?

Vice Adm. Barrett : I might ask Rear Admiral Grunsell to answer.

Rear Adm. Grunsell : I can take that on notice. I don't have the figure of the total cost, and in fact it's still under negotiation with industry as to what the split of those costs will be.

Senator GALLACHER: So that's the next question: are you able to recover any or all of the costs through the warranty?

Rear Adm. Grunsell : We're in negotiation with industry, and our intent is to recover some of the costs from industry.

Senator GALLACHER: If you would, take on notice the costs and what proportion would be covered by warranty.

Rear Adm. Grunsell : Yes.

Senator GALLACHER: When you purchase these sorts of 30-year-life vessels, are there any supply recommendations about the maximum time at sea for LHDs, the deployment rates and the intensity, or is that left to you to judge that capability?

Vice Adm. Barrett : In buying any ship, there is due consideration to how you intend to operate the ship. It's an issue called design intent that you examine. You then make sure that the ship is built with appropriate equipment on board to last the life and the number of sea-days you expect, and then you also consider the stores you might need to be able to continue to sustain the ship over that life. It's then up to the user to make sure that you operate it in the manner which the design intent suggested and that you conduct maintenance and replace items at the times you said you would do, and we're going through that process right now. Of this particular class of ship, we own two. The Spanish Armada owns one. So it's a class of three in the world, currently, and so we are sharing more information now with the Spanish Armada as to how they operate and how we operate—there are differences—and we're making sure that we use more knowledge of their fleet use, as well as our own, to be able to sustain it and manage it in the way which the design intent originally intended.

Senator GALLACHER: I'm not familiar with the Spanish vessel. Is that older than ours or built at the same time?

Vice Adm. Barrett : It is older than ours. Even in the two years that we've commissioned both ships, we've spent more time at sea than the Spanish ship does. So again, what I'm saying is: we're looking at how that ship is operated and how we operate, to make sure that our initial judgements on design intent and sustainment practice are contemporary and appropriate to the way that we operate.

Senator GALLACHER: So you only have one peer and that's the Spanish vessel. We are operating them more than they do. Is that because of our requirements or because we are pushing them harder?

Vice Adm. Barrett : No, we bought it to operate a certain number of sea-days. They don't operate the same number of sea-days. They operate largely in the Mediterranean and occasionally the Atlantic. We've sent Canberra to Hawaii. We've sent Adelaide into the South China Sea. The ship is capable, and our system of sustainment is capable of doing that. But these are relatively new ships and, as you would expect, like driving a new car, we are ensuring that we know everything about it and that we are sustaining it in the way which we originally intended and that the equipment that's fitted is actually operating in the way it should. That does not always happen.

Senator GALLACHER: Does Navantia have a view, though, about the operational intensity, or do they say, 'Look, we've designed the ship; it's up to you to use it how you see fit'?

Vice Adm. Barrett : There's been no indication from the ship designer, Navantia, as to how we're operating the ship. We do drive the ship differently from the Spanish navy, from the Armada, and, again, we are looking at that, but we are not—and it has not been indicated by the original equipment manufacturers that we are—operating outside the limits of what the equipment was designed to do.

Senator GALLACHER: There is commentary that the LHDs are being used too frequently in heavy seas and they are experiencing heavy wear and tear earlier than you would anticipate.

Vice Adm. Barrett : They are a 28,000-tonne ship. I am sailing Armidale class, at 500 tonnes, in the same waters. I don't believe that is an issue. As their utility is proven more and more, my biggest issue will be making sure we only use them at sea equivalent to the number of sea days that I'm funded to be able to provide them—and that is part of the sustainment issue. That is, if I've only got spares and maintenance to run them for a certain number of days a year and I'm asked to operate them beyond that, then I start ageing the platform far more quickly than we had intended and it wouldn't last 30 years.

Senator GALLACHER: Are they fully functional at the moment? Are there any limitations as we speak?

Vice Adm. Barrett : I spoke a little about that speed range issue and that is not anything that is stopping. We are still testing some parts of the capability, and that includes the watercraft. But we have conducted all of the first-class flight trials on the aircraft we expect to operate. The ships have proven themselves where they need to, but we still need to conduct a couple of other exercises before we declare final operating capability for the entire amphibious capability.

Senator GALLACHER: And this capability is critical in the event of disaster relief, and we can't predict that.

Vice Adm. Barrett : It can do disaster relief.

Senator GALLACHER: We can never predict when that is likely to happen. So they are available and operational and if, heaven forbid, we had a tropical cyclone or a disaster effort they would be deployable?

Vice Adm. Barrett : We have a large hulled vessel, either an LHD—that is, Canberra or Adelaide—or Choules permanently available to conduct humanitarian assistance and disaster relief, HADR.

Vice Adm. Griggs : But note that that is not the war-fighting utility of the vessel. It is not designed for HADR. That is a very useful skill set that it has.

Senator GALLACHER: There was a report that landing craft would be able to carry 63 tonnes, just above the weight of our M1A1 tanks, when seas are below 10 centimetres. The same report noted that the weight limit would be 45 tonnes when the seas are above 85 centimetres. The report also noted that decks may not be strong enough to hold Land 400 vehicles. Are you familiar with that article?

Vice Adm. Barrett : I'm familiar with the article, yes. I don't necessarily agree with it, but I'm familiar with the article.

Senator GALLACHER: Having landing craft that can move quickly from ship to shore is one of the key capabilities we are looking for?

Vice Adm. Barrett : That's correct.

Senator GALLACHER: Have you tested the landing craft over the last couple of months?