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ESTIMATES COMMITTEE D
13/04/1989
DEPARTMENT OF THE ARTS, SPORT, THE ENVIRONMENT, TOURISM AND TERRITORIES
Program 3-ANTARCTIC

CHAIRMAN -This program appears at page 13 of the explanatory notes.

SENATOR PUPLICK -I have a matter I want to clarify with the departmental officers with regard to the Antarctic Division. In relation to an appropriation regarding corporate services which relates to unanticipated separation payments for departmental officers, is one of those also an officer related to the Antarctic Division?

MR BLUNN -That is dealt with separately under the Antarctic Division.

SENATOR PUPLICK -I come then to the question of the tender for the replacement of the Antarctic vessel and, in particular, to the comments made by Mr Ralfs about errors in the presentation or representation of his original tender documents. For the benefit of the Committee, can you summarise what the eventual findings were of that investigation undertaken by the panel appointed to conduct the review?

MR MONCUR -I guess I am not sure what specifically is written in there, but--

SENATOR PUPLICK -You will recall that Mr Ralfs made an allegation that at some stage there had been a misstatement of matters which were in his original tender document and which had caused some difficulty in the assessment of the final--

MR MONCUR -Essentially the answer is that there was an error in the information that went to the Minister, but it was not material to any decisions and did not influence any decisions.

SENATOR PUPLICK -That is information which was supplied to the Minister in a brief, or a minute or something, of 7 September 1987?

MR MONCUR -I think that is correct.

SENATOR PUPLICK -Who prepared that brief for the Minister?

MR MONCUR -I prepared that brief, or most of it. Other officers assisted by giving me parts of it, but the bulk of the brief I prepared.

SENATOR PUPLICK -How did Mr Ralfs become aware that incorrect information, or misrepresentation of information, had been passed on to the Minister, or had been through the process?

MR BLUNN -We do not know the answer to that question. I was satisfied that there was no evidence to suggest that it had come from departmental sources and, therefore, I instigated no investigation into it.

SENATOR PUPLICK -What is the Department's conclusion in relation to the final conclusions which the review panel came to? Does the Department accept the conclusions of the review committee investigation?

MR BLUNN -Those conclusions being in essence that the committee did not find anything which would have vitiated the decisions. We accept those, certainly.

SENATOR PUPLICK -What about the specifics on the way through? Do you agree with all of the findings?

MR BLUNN -I cannot think of any at the moment that we disagreed with. I think we had questions about some, which we pursued, but in the end they are the findings of that committee. It was created to look into those things, we believe it did a thorough job, and we accept them as such.

SENATOR PUPLICK -Are you aware of the details of comments made in a minute from Mr Bleasel dated 2 December 1988, addressed to Mr Kennedy, which deal with the report and its conclusions?

MR BLUNN -I have seen that minute, yes.

SENATOR PUPLICK -One of the points that is raised, which I would like to pursue with you, is the question of the announcement by the Minister, I take it, of the selection of P and O Polar as the successful tenderer before the contract had actually been negotiated. Was that announcement made before the contract had been negotiated?

MR BLUNN -Before the final contract had been negotiated? Yes.

SENATOR PUPLICK -Is it correct to say that that early announcement prejudiced the Commonwealth's position in being able subsequently to get the best available price?

MR BLUNN -Certainly Mr Bleasel believes that we would have been in a better position to negotiate-we will never know. The issues that really became the most contentious or the most significant in the contractual processes that followed related tothings which I personally doubt would have been influenced whether we had announced it or not. They were large ticket items that the discussions naturally centred around. I would have been surprised if we had been able to do any differently.

SENATOR PUPLICK -Is it the normal process for the selection of the tenderer to be indicated before contracts have actually been further negotiated?

MR BLUNN -It is not a normal process but it happens. From memory, in the submarine contracts, for example, I doubt that the contract was negotiated before the announcement of the--

SENATOR RICHARDSON -I guess the situation is that it happens quite often. Certainly in this case, given the interest and given the number of people who had expressed interest in getting the contract, I do not really think that we had any choice but to announce who was going to get it and then seek to negotiate the best deal with those involved. If you fail to get the best deal with them and you go back to Cabinet and get another decision, the decision to announce was part of the Cabinet decision. I think that should also be put on the record.

SENATOR PUPLICK -Is the company which is currently building the replacement vessel entirely the same company as the one to which the original contract was given?

MR BLUNN -The company that is building--

SENATOR RICHARDSON -We never actually had a contractor to build her.

SENATOR PUPLICK -The contract statement of the Minister, dated 16 December 1987, stated that the government would enter into detailed contract negotiations with P and O Polar, the joint venture of P and O Australia and Polar Schiffahrts Consulting of the Federal Republic of Germany, with P and O Australia Ltd as the major partner. Are they still the people who are involved in the production of the vessel at Carringtons?

MR KENNEDY -I forget the precise name of the company with whom the charter was entered into, but from memory it is P and O Polar Australia Pty Ltd which is a wholly owned subsidiary of P and O Australia Ltd. Guarantees have been given by P and O Australia Ltd in relation to the performance of the charter by the subsidiary and in relation to any claims that Schiffahrts may have because it is not now included in the charter party. All of those arrangements were settled and agreed to with the Australian Government Solicitor.

SENATOR PUPLICK -When did Schiffahrts withdraw from the arrangement which it previously had?

MR KENNEDY -I do not know that we were ever aware of what its precise arrangements were with P and O. The negotiations were always conducted with P and O and when the legal documentation was presented it was not a party to it, although I understand that it still has some relationship with P and O.

SENATOR PUPLICK -Did you enter into detailed contract negotiations with a company which at that stage was a joint venture between P and O and Polar Schiffahrts?

MR KENNEDY -We entered into the detailed negotiations with the officers of P and O Australia Ltd, on the understanding that they would be creating an appropriate corporate vehicle when the negotiations had gone further.

SENATOR PUPLICK -The Minister's press statement of 16 December says:

The Government will enter into detailed contract negotiations with P and O Polar. . .

That is described as a joint venture of P and O Australia Ltd and Polar Schiffahrts Consulting. When the actual detailed contract negotiations were entered into, was it with a company which was a joint venture of P and O and Polar Schiffahrts?

MR KENNEDY -We understood that we were negotiating with a joint venture but P and O, as had been the case all the time, took the lead in the negotiations.

SENATOR RICHARDSON -I think what Mr Kennedy is saying is that we were not actually negotiating with anyone who could be from the Polar side of the arrangement. It was always P and O officers but the entity presumably was P and O Polar.

MR KENNEDY -That was the intention, that there would be an entity.

SENATOR PUPLICK -Is P and O Polar, the company with which negotiations have proceeded, a joint venture between P and O Australia and a German company?

MR KENNEDY -We understand it is a wholly-owned subsidiary of P and O Australia Ltd.

SENATOR PUPLICK -So there were never any negotiations that you were aware of that involved P and O and a German company associated with it in a joint venture?

MR KENNEDY -We understood they were in joint venture arrangements, the nature of which was never spelt out to us, but P and O were the people that we dealt with.

SENATOR PUPLICK -Why did you not find out what these joint venture arrangements were if Commonwealth money was concerned? Did you simply accept that they had some joint venture which was none of your business?

MR KENNEDY -Because we had a guarantee from P and O Australia Ltd of the performance of the contract and we were advised by the Australian Government Solicitor that that was the appropriate way to go.

SENATOR CALVERT -What was the contract price at the time?

MR KENNEDY -I could not tell you off the top of my head.

MR MONCUR -There are a number of variables.

SENATOR PUPLICK -Variables to a contract price?

MR MONCUR -Are you talking about the time of the tender or the time the contract was signed?

SENATOR CALVERT -It was announced by the Government in 1987. What was the actual contract price?

MR MONCUR -I think it was $124m all up. In fact, I think it is in the press release.

SENATOR PUPLICK -We are asking you whether you can tell the Committee what it is.

MR MONCUR -My understanding is that it was $124m.

SENATOR CALVERT -Have you got any idea of what the actual price is now?

MR KENNEDY -We will not know until the charter starts because there are a number of variables-inflation rate variables, crew rates and a whole lot of other things-which will determine the actual amount paid. The ways in which these are all calculated are set out in the charter party, and that is quite a normal procedure.

SENATOR PUPLICK -What do you think the Commonwealth is going to end up paying?

MR KENNEDY -It will be like any contract. It will be determined each year in accordance with the contract.

MR BLUNN -And a formula set out which has been agreed.

MR KENNEDY -That is the case with most contracts of that nature.

SENATOR PUPLICK -So is it more than a $124m project?

MR BLUNN -Because of the operation of the cost inflation factors.

SENATOR PUPLICK -The vessel is going to be ready some time in the 1989-90 season, is it not?

MR BLUNN -We hope so.

SENATOR PUPLICK -What do you anticipate having to pay in the 1989-90 season?

MR BLUNN -I do not think we can give you that answer. There are some details that still have to be calculated in accordance with those formulas, but they will relate to factors which are varying from time to time.

SENATOR CALVERT -I think you are going to charter it for something like 10 years, is that right?

MR BLUNN -Yes.

SENATOR CALVERT -If that is the case, what involvement have you had? Do you regularly inspect the vessel to see that it is being built up to what you wanted? Do you report back on that? Are reports available on the progress of the vessel?

MR BLUNN -We are certainly getting reports on the progress of the vessel. In fact, if the vessel does not meet the contract requirements, then we have remedies against P and O, the ultimate of which, if it absolutely failed I suppose, would be the possibility of rejecting it. But it is P and O's job to provide a vessel to be leased to us for 10 years. We are not buying the boat, as you would well understand.

SENATOR CALVERT -Surely, if they are going to charge us for the next 10 years you would have some officers going and inspecting the progress of it and reporting back?

MR BLUNN -We do have officers inspecting. We certainly keep in touch with the progress of the boat, but we really are relying at the end of the contractual process on the performance criteria that have been identified and on the contractual relationships. We have to. We really cannot intervene in the process of the shipbuilding, because if we do we would presumably accept the liability that would flow from such interventions. Whilst we do go and inspect and whilst we are kept in touch with it, at the end of the day we have to rely on our contractual position.

SENATOR CALVERT -How many detailed inspections will you have had then?

MR BLUNN -I am afraid I cannot answer that.

MR KENNEDY -There is an officer inspecting today. I do not know whether Mr Moncur can give you any more details.

MR MONCUR -In terms of the number of inspections, it is approximately once a month that we get a detailed report and photographs. The officer has been up there, I think, three times.

SENATOR MAGUIRE -I want to ask Mr Moncur one or two questions about Antarctica , specifically about the disposal of rubbish down there. I have been reading some horrifying reports about the American base at McMurdo and the vast amount of rubbish that has been accumulated there, including all of the worst elements of our throw-away society such as plastic, which is very destructive in the Antarctic environment, and those sorts of things. Can you tell us about rubbish accumulation on our own bases, if any, and what steps we take to make sure that we do not pollute the Antarctic by leaving rubbish behind?

MR MONCUR -Historically, we have had a similar problem, but, not of the same magnitude as the Americans have had at McMurdo. Over the last three or four years we have been going through a process of cleaning up this accumulation of rubbish. Essentially, over the period from the late 1950s rubbish was just thrown in a tip next to the station. In the case of Davis we have now essentially cleaned that up completely and brought all the rubbish back to Australia. In the case of Casey, we have done as much as we think we can do. It does need some rocks and things to cover up that area again so that it looks reasonably natural. Near to Casey is an old Australian-American station called Wilkes, which is a major problem. It has a lot of unexploded old explosives-and we do not really know exactly where these are-as well as fuel in drums. We have been negotiating with the Army to send a specialist team down. The Army people have in fact sent a team down to inspect what the magnitude of the task would be. We had hoped that they would have gone down originally this summer, but because of other demands on their resources they have had to defer that and that will not commence now until the summer after next, at best. It is a major program. I cannot tell you how long it is going to take, but it will take a while. It really does need the skills of those sorts of people to handle the situation because of the explosives.

In the case of Mawson, we had intended to start the first year of a major program this summer, and we have done reasonably well there. One of the things we wanted to do was take an excavator down which was going to pick up rubbish which has actually been pushed sidewards into the sea. Because of problems with the sea ice at Mawson, our ship did not get into Mawson until quite late. There was a risk that if we put the machine ashore, the harbour would refreeze and we would not be able to get it out, and we would be up for the cost of hiring it for a whole season, so we did not leave it. Nevertheless, the people at Mawson station have done a pretty good job of cleaning up. I would say that it is probably at the level of 10 to 20 per cent, but they have been very committed to the task. A number of people have in fact taken it on as a personal responsibility to clean up at a lake or a rock area. I think if you looked at it overall, you could say that we are about halfway down the track, although the Wilkes one is a big problem. It is a bit hard to know how long that is going to run us on.

SENATOR MAGUIRE -Is there any prospect of support coming from the United States to help clean up Wilkes?

MR MONCUR -I do not see that as something that we could reasonably ask of the Americans. After all, they allowed us to use that station. We used it for a number of years and then we essentially discarded it and moved to a new station. I really think the responsibility is ours.

SENATOR MAGUIRE -From today onwards, have we got policies in place to ensure that no future rubbish accumulates in Antarctica?

MR MONCUR -Yes.

SENATOR MAGUIRE -You talked about the retrospective clean-up but are there now ongoing policies to make sure it is all shipshape?

MR MONCUR -Yes. We certainly have a policy that the currently produced rubbish all comes back.

SENATOR CALVERT -Senator Puplick and I were privileged enough, thanks to Mr Moncur, to actually see the last shipment arrive. The Lady Franklin was loaded with rubbish, all of it crated.

SENATOR PUPLICK -What became of it when the crates arrived in Hobart?

SENATOR CALVERT -Yes, what did happen to the crates?

MR MONCUR -They would have gone for quarantine process. Depending on the nature of that, they may have been fumigated, et cetera, and ultimately they would have been dumped in the municipal dump.

SENATOR PUPLICK -Transfer the world's rubbish to Hobart! We might go back to the ship and the tendering process. The shipyard, which was to construct the vessel, was to be chosen on what the Minister describes in his press release as `a competitive commercial basis'. In seeking to establish what was a competitive commercial basis, what investigations were undertaken about the extent to which State governments, which were bidding for this project, subsidised the shipyards within their States?

MR BLUNN -We did nothing about that, because the performance of the contract was a matter for P and O. It was its business who built the ship and departmentally we just did not get involved in it.

SENATOR RICHARDSON -When the contract was awarded and Cabinet made its decision and said it was going to P and O, the yard in which the ship was to be built was not specified. That was a matter for negotiation by P and O.

SENATOR PUPLICK -Did the Department, or anybody on behalf of the Government, have specific meetings with Carringtons prior to Carringtons being awarded the contract?

MR MONCUR -The Department did not. If you go well back, even before tenders were called, the Carringtons people talked to us about the ship and the proposal and I had meetings with them, as did many of the other people.

SENATOR RICHARDSON -I have known Laverack for years. I think I saw him during that period-I see him several times every year-and I think at some stage I saw a representative of the Western Australian shipyard and I referred them both to P and O and told them to keep doing whatever they were doing with them.

SENATOR PUPLICK -So there were no direct negotiations between the Department or between the Minister's office with Carringtons, specifically, on the question of the contract?

MR BLUNN -Certainly not with the Department, and the Minister is also saying no regarding his office.

SENATOR PUPLICK -Were those discussions with Carringtons and with the Western Australian shipyard, which the Minister may have had informally at any time, regarded by anybody as actually being part of the process?

SENATOR RICHARDSON -No, I did not report them to the Department, I do not think. I doubt very much if Mr Blunn knew until now that I had seen them. I just told them that it was not an exercise into which I would enter and it was not appropriate for the Department to do so, either. I do not know if they battled on, talking with anyone in the Department, but I doubt it.

SENATOR PUPLICK -So it was entirely the responsibility, entirely the responsibility, of P and O to select the successful shipyard?

MR BLUNN -From our point of view--

MR KENNEDY -In fact we gave them a letter which said that both were acceptable , I think, did we not?

MR MONCUR -That is right.

SENATOR PUPLICK -Fine. Could we have a copy of that letter at some stage?

MR KENNEDY -Yes.

SENATOR PUPLICK -When P and O was then selected as the successful tenderer, how were its people informed? Were they sent a letter by somebody in the Department, or were they sent a letter by some tender board, by the Minister, or the Secretary to the Department? Who and how?

MR KENNEDY -I do not know how they first got the first news of it, but in a formal sense they were given a letter of intent in December before Christmas. I cannot put my hand on the date just now. It was a letter signed, from recollection, by Mr Moncur having been cleared with the Australian Government Solicitor. It was dated 18 December.

SENATOR RICHARDSON -In terms of the actual form of the announcement I cannot remember the exact details, obviously, but I rang them just before I made the official announcement.

SENATOR PUPLICK -That was on 16 December.

SENATOR RICHARDSON -As I said, I cannot recall the exact date but, yes, if that is what the record shows, that is it.

SENATOR PUPLICK -During this process what negotiations took place with representatives of the Seamen's Union?

SENATOR RICHARDSON -The only negotiation that I am aware of with the Seamen's Union, if you can call it a negotiation, was a meeting that I had once with an official of the Seamen's Union and then a follow-up meeting with that same person and some officials, I think, of two other unions. I could get for you details of whoever attended those meetings. That was for the purpose of trying to establish, for the tenderer, that we were going to have some reasonably sensible parameters for an Australian crewed vessel. Obviously that had some significant cost bearing on the contract itself.

MR BLUNN -I believe, Senator, that the Department also has had some discussions with Seamen's Union representatives.

MR MONCUR -This is post the--

SENATOR PUPLICK -When Mr Ralfs claimed that information had come into his hands about the misrepresentation which occurred in the minute of 7 September, he has claimed, I understand, that that information came into his hands via the Seamen's Union. Would the Seamen's Union have been in a position as a result of any of these discussions to know anything about this particular process?

SENATOR RICHARDSON -Certainly not in the discussions that I had with them. That was not raised. At no stage with the Seamen's Union did the question of who might get the contract ever arise. The question was: Whoever did, what sort of crewing arrangements were going to be possible?

MR KENNEDY -I did not know until now that it was suggested that the Seamen's Union told him that. That is a surprise to us. That is the first time I have heard that.

SENATOR PUPLICK -Mr Kennedy would be aware of that claim.

SENATOR RICHARDSON -I am not.

MR BLUNN -I believe that Mr Bleasel has alleged that at some stage. That is my recollection.

SENATOR PUPLICK -It is actually in Mr Bleasel's minute which was sent to Mr Kennedy and sent to the Secretary to the Department.

MR BLUNN -Yes.

SENATOR PUPLICK -When Mr Bleasel's minute which made that allegation, amongst others, was received what steps did the Department take to check the veracity or otherwise of those claims?

MR BLUNN -Of the claims about Mr Ralfs' vessel?

SENATOR PUPLICK -No; of the claims that Mr Ralfs had received the information from `the Seamen's Union which in turn had obtained it from P and O or the Minister's office'.

MR BLUNN -The question of Mr Ralfs' allegations, as I recall it, was referred to the AFP for investigation. I discussed the issue with officers of the Antarctic Division and with my Deputy Secretary, Mr Kennedy, who as the top of the pyramid that was looking after the Antarctic had had the major involvement in this, and we were satisfied that there was nothing to suggest that that had come from the Department, so I was happy to leave it as an external matter.

SENATOR PUPLICK -After the tender had been announced, Mr Moncur made a visit to Finland, I believe, in January 1988.

MR MONCUR -Yes.

SENATOR PUPLICK -What was the purpose of that?

MR MONCUR -That was to define the detailed specification in terms of a number of variables.

SENATOR PUPLICK -So they were not known in precise detail at the time the announcement was made that P and O was going to get the contract?

MR MONCUR -As a result of negotiations which happened while I was away in Antarctica, there were a number of areas where the Division felt the specification for the vessel could be substantially improved and I was to go over and be involved in the decision making process about those improvements.

SENATOR PUPLICK -Substantially improved? Is it not a bit unusual for a contract to be granted or a successful tenderer to be announced if some weeks or months later the Department believes that that contact can be substantially improved, as distinct from fine-tuned or whatever?

MR BLUNN -Substantially improved or fine-tuned. I think the thing we were talking about was whether we could increase the icebreaking capability of the ship by a matter of feet, by strengthening a bow section, shifting a motor or adding to a propeller. It did not go to the substance of the ship or its basic requirements. If it could not have been improved, I think we would have still said, `That is fine, we stay with the ship we have got', but if without cost, or at very, very minimal cost, we could achieve those sorts of improvements then I think we thought that that was worth exploring. Mr Moncur was really the man on the spot, so perhaps he could comment.

SENATOR PUPLICK -But why were they not explored prior to the announcement of the successful tenderer, the price and all the rest of it?

MR MONCUR -Certainly these things were explored by the officers who were involved at that time as options.

SENATOR PUPLICK -If officers had explored all of this, what was the purpose of having to go to Finland?

MR MONCUR -They were things that had been explored as possibilities but it was a question of making decisions on what was actually practical.

SENATOR PUPLICK -But you must have made all of the decisions on what was actually practicable before you awarded the contract?

MR MONCUR -These were in terms of practical improvements, such as to icebreaking and numbers of passengers.

SENATOR PUPLICK -So you were not entirely satisfied then that all of the i's had been dotted and all of the t's had been crossed at the time P and O was awarded the contract?

MR MONCUR -I think there is no doubt that the Division was satisfied that it had the best basic ship. It was a question of whether you could improve it.

MR BLUNN -I think that was the point of the contract for a basic ship and, as I say, if we had ended up with that ship, that would have been well and good, but the opportunity existed. In fact, in one case the icebreaking capacity arose out of some almost casual discussions and we decided that it was worth pursuing it to see whether we could make an increase in its capacity. Is that not right, Mr Moncur?

MR MONCUR -Yes.

MR BLUNN -So it was a question of whether we could improve on that basic ship to the advantage of the Commonwealth and we thought that was worth exploring.

SENATOR PUPLICK -Who then subsequently carried out the rest of the detailed contract negotiations?

MR KENNEDY -After some preliminary discussions had been held with P and O following the return from Helsinki, I took over the lead role, I suppose you would say, in the detailed negotiations with P and O, supported by Mr Moncur and other officers for the Division and the Australian Government Solicitor's office.

SENATOR ARCHER -And then the Acting Director?

MR KENNEDY -Early in 1988, the Director was seconded to work on the submission to the Parliamentary Accounts Committee and he was not any further involved in the negotiations after that.

SENATOR PUPLICK -What about Mr Lyons? Was he involved?

MR KENNEDY -Not in the negotiations at that stage; sort of from early 1988 onwards.

SENATOR PUPLICK -So what was the involvement in the negotiations of Mr Bleasel and Mr Lyons? Were they peripheral to the actual negotiation of the contract, or were they central to it?

MR KENNEDY -They were peripheral.

SENATOR PUPLICK -Were they, in fact, the most experienced officers at that stage who were available to the Department, in terms of actual understanding of the requirements for a vessel and the sort of work it would have to undertake, and the sorts of conditions that it would encounter in the Antarctic?

MR KENNEDY -I would have thought that Mr Moncur's engineering background and experience in the Antarctic Division would have given him at least equal competence, but I am not fitted to judge between engineers. However, the detailed contract negotiations, at that stage, were concerned largely with legal and financial matters, and technical details only came up from time to time.

SENATOR PUPLICK -One of the details, in terms of legal and financial requirements, which the Commonwealth has, is that unsuccessful bidders in a Commonwealth contract should be debriefed. Have the unsuccessful bidders been debriefed?

MR MONCUR -In the sense of a debriefing, I think the answer is no. In the sense that they have been advised by the brokers, I think the answer is yes.

SENATOR PUPLICK -They have been advised that they were unsuccessful?

MR MONCUR -Yes.

SENATOR PUPLICK -They have not been debriefed in accordance with the requirements which are normal in Commonwealth purchasing procedures?

MR BLUNN -Nor have they asked to be debriefed.

SENATOR PUPLICK -That was not the question.

MR BLUNN -I know that. I am just adding another piece of information. I think had any of them come to us and said, `Why' or `Tell us', then certainly we would have responded to that.

SENATOR PUPLICK -That is, of course, if they knew that they were entitled to do that. Did you advise them that they were entitled to do that?

MR KENNEDY -It is not clear that they were entitled to do that because it is not clear that in a situation such as this, those provisions of the Commonwealth purchasing manual necessarily apply.

SENATOR PUPLICK -Why not?

MR KENNEDY -Because it was a charter party, and that is examined in great detail in the DAS review of the whole question of the extent to which the Commonwealth procedure should apply and the extent to which commercial procedures should apply.

SENATOR PUPLICK -But the report says, on page 118, that not all appropriate practices and procedures were observed. Is this one of the appropriate practices and procedures that was not observed?

MR BLUNN -If it was, it was not drawn to our attention as one of those, Senator. There are a number which are specified. From memory, I do not think this was one of them.

SENATOR PUPLICK -In terms of the final decision, was there an offer or a bid made to provide a vessel from a non-Australian company at a substantially lesser cost than that which eventually went to P and O and Carringtons?

MR BLUNN -Yes. Overseas manufacture would have produced a cheaper price.

SENATOR PUPLICK -How much cheaper?

MR BLUNN -It depends on which one you are talking about. If you are talking about the cheapest of the tenders, I am afraid I do not have that here.

MR MONCUR -In the order of $4m cheaper.

MR BLUNN -Per annum.

SENATOR PUPLICK -That is over a 10-year period?

MR BLUNN -Yes.

SENATOR PUPLICK -So it is $40m over a 10-year period?

MR BLUNN -Yes.

MR MONCUR -I have got a figure here, but I think, as a broad number, that is as close as I can get.

SENATOR PUPLICK -As a broad number? Reiber was one of the unsuccessful tenderers. What was the price of its tender?

MR BLUNN -Mr Moncur would be the only person who may have that with him.

MR MONCUR -To go back to that figure of $4m, there were a number of offers that had different interest rates. If you actually put this into discount cash terms, this difference could well be substantially less than that sort of number. We could come back to you with what it is.

SENATOR PUPLICK -I would be grateful if you would. Was the selection of an Australian company to construct the vessel a result of specified Government policy that the thing had to be built in Australia? Did people who put in an option to build overseas have a realistic chance of obtaining the tender?

SENATOR RICHARDSON -I certainly had a preference for an Australian built, Australian crewed vessel. It was then a matter of going to Cabinet. When we went to Cabinet, there was a range of choices with a range of prices. Obviously, whether or not it was built here or crewed by an Australian crew had a pretty fair bearing on what the prices might be. It was then up to the Cabinet to make a decision on the merits. I want to make one thing clear: I made it clear to the Cabinet what I thought ought to happen.

SENATOR CALVERT -When you were looking at the Lady Franklin as an option, was there not another ship called the Polar Queen which was regarded as a good ship around at the same time? In fact, it was regarded as a lot better ship and it was actually offered to the Antarctic Division for the 1988-89 season. Could you tell the Committee why you did not take that option up?

MR MONCUR -This was mentioned this morning at a Public Accounts Committee hearing. I do not recall the Polar Queen being offered, but I agreed with it that I would go back and check the files.

SENATOR PUPLICK -For the sake of the record, you might just tell people what you mean by `it'.

MR MONCUR -I refer to the JPCA, the Joint Parliamentary Committee of Public Accounts.

SENATOR CALVERT -Mr Chairman, I have very parochial questions that I have been carrying around with me for some time and I would like to ask them of the Minister, or Mr Moncur-and I think he is aware of my views on this: What are the views of the Antarctic Division with regard to the port of Hobart being a principal supply area for perhaps the USSR? Have you made any inquiries, or have you pushed in that direction at all?

MR MONCUR -I guess the question of the USSR going to Hobart has a lot of wider ramifications than the Antarctic Division can answer.

SENATOR RICHARDSON -It is not in our ministerial power to determine that question. Ministers far more senior than I with great and powerful departments , will make that decision. As far as the Antarctic Division is concerned, it would be quite happy to see it occur, but beyond saying that, Senator Calvert, I do not think there is much that Mr Moncur or I could add.

SENATOR CALVERT -Perhaps I will put it another way. If the powers that be decided that Hobart would be suitable, all things being equal, would the Antarctic Division be in a position to ensure that what it is after would be available in Hobart-in other words, as a supply base?

MR BLUNN -That would require a dramatic change to the structure, functions and role of the Antarctic Division.

SENATOR CALVERT -And yet other particular countries have been using Hobart as a hopping off point.

MR BLUNN -Hobart could be used, but I thought your question related to the role of the Antarctic Division in that use.

SENATOR CALVERT -I believe there is a bit of cooperation in the Antarctic. That leads me to the next question, and Mr Moncur would be aware of that: In the event of serious injury or illness in the Antarctic area, what emergency evacuation procedures are in force? What brings to mind that question is the cooperation which you receive from the USSR. I suppose it is drawing a very long bow, but as far as the Antarctic Division is concerned, you must have some dealings with the Russians and I just wonder how far they went and how far they could go?

MR BLUNN -We have had enormously fruitful dealings with Russia quite recently, as you intimate, in the Medivac of two badly injured Australian expeditioners .

MR MONCUR -Perhaps I could just go through that sort of situation. First of all there is, on the ground, excellent cooperation between the people who are working, from all countries. It is the situation where you are working remotely, and if people come to visit, everybody is welcome. The Russians have always been prepared to respond to our requests for assistance, such as breaking out the Nella Dan a couple of years ago, and on other occasions. On this particular occasion this year they responded to our request and really arranged a pretty dramatic and tremendous effort in terms of getting two of our people out of Antarctica and ultimately back to South America, and we then shipped them back to Australia. The Russians, at that time, used a very large amount of the sort of fuel that they use for helicopters, which was also used by this aircraft that flew these people out. They asked if we could replace it, which was quite minor compared to everything they did for us. We were obviously very happy obviously to do that.

Originally, we were going to try to do that in Antarctica. They asked if it was possible for us to arrange for them to pick it up in Hobart. We made some inquiries with Foreign Affairs, because it meant speeding up the normal clearance processes, and ultimately that was done. There was a question about whether they came to Hobart because they ultimately decided they would have to go to Melbourne. The reason for that was that the arrangements that they have for their fuel because they have problems with foreign currency is that there are certain ports where they can essentially exchange fuel with Russian fuel, but Hobart we were told was not one of them, so in terms of their own fuel for rebunkering their vessel, they were unable to go to Hobart.

SENATOR CALVERT -You are saying that the Russians have some arrangement with other countries as to swapping fuel. Is it called a fuel bank, or is it just an arrangement?

MR MONCUR -We have used the word fuel bank-I am not sure what the formal words are-but it is an arrangement whereby certain ports essentially act as a fuel bank. They are all around the world and it means that ships of other countries can go to Russian ports and pick up fuel, and that all gets balanced out in the books somehow. The Russians told us that because they did not have access to that facility in Hobart they could not come. They wanted a substantial amount of fuel for the vessel.

SENATOR CALVERT -Was it a particular type of fuel that they were after that was not available in Hobart?

MR MONCUR -They did not say that the type of fuel was a problem-although that was a problem with an American ship that tried to get into Hobart.

SENATOR CALVERT -But surely we are not that isolated in Tasmania that we use different currencies?

MR MONCUR -No, it was not a question of currency. It was a question of the fact that the arrangement just did not exist in Hobart.

SENATOR CALVERT -That is one of the reasons I asked the question. If that is one of the major obstacles to a Russian ship docking in Hobart to refuel, surely recommendations from the Antarctic Division to the Department or appropriate departments could be advantageous not just to Tasmania but also the Russians, because they would not have to travel so far. I was wondering whether the Department or your Division had bothered to do anything about that .

MR MONCUR -At the time I thought about it because I thought that cooperation with the Russians was very fruitful, but it is one of those things that probably would need a lot of negotiation and we have not had the resources to put into it.

SENATOR CALVERT -Do you think it is an initiative that the Tasmanian Government should take up and pursue?

MR MONCUR -I think that is true, too.

SENATOR CALVERT -There are two most likely disasters. One of them I have briefly mentioned, where you have illness or injury in the Antarctic. The other, which has already happened in other areas down there, is oil spills. How well placed is the Antarctic Division to deal with them? Are you satisfied with the arrangements for evacuating personnel and are you in a position to say that all is being done that can be done to prevent oil spills of the type there have been?

MR MONCUR -We have been exploring the option of having an air capability.

SENATOR CALVERT -Are you going to get Dick Smith to fly in?

MR MONCUR -No. The sort of aircraft that Dick Smith flew is really suitable only for carrying the two pilots and the whole aircraft has to be full of fuel ; it cannot really carry much in an evacuation. But there is an option which we have been exploring and doing some work on. Last season RAAF inspection team went to Antarctica to look at the question of landing RAAF Hercules on blue ice at Casey. It has reported to us that this is a very promising possibility; in fact, it sees no reasons why it cannot work. We still have not got the final report, which is going through the RAAF system, but it has been sufficiently promising for us to prepare a proposal to the Minister and he has said that we should push it and see where we can go. The plan would be to do some pilot flights next season. Getting aircraft just to Casey does not solve all the problems but it is a good start. The question is how to move people up and down the coast, and it looks very promising there to use long- range helicopters. That is part of the proposals and we would like to do a trial of that also this summer.

SENATOR CALVERT -So what you are saying is that there is hope that you can have backup support. I think I asked the Minister earlier in the year, after Dick Smith went there, whether he had anything in mind and he implied that something might be happening. Now he is in a position to say, through you, that things are looking a lot better. I presume that they will fly out of Hobart.

MR MONCUR -Yes, that would be the plan. Hobart is the right place.

SENATOR CALVERT -I have to win somewhere along the line.

MR BLUNN -Your other question related to oil spills, I think, which we have not really covered.

SENATOR CALVERT -That is a very topical subject of course.

MR MONCUR -Yes. First of all, we do have a limited amount of absorbent material and booms on our current ships. In terms of future planning, our new ship is designed to have no fuel between the inner and the outer hulls; it is a completely double-hulled ship with no fuel between the inner and outer and that means it has to be a rather horrendous accident before you would actually leak fuel; so that is a substantial improvement. We are, as everyone else is, very concerned about the accident in Alaska and the effects of it and so we have officers consulting with the Department of Transport and, in fact, only this morning they advised me that one of the things they are going to do is set up a little committee to set up actual plans of all the things that have to happen if you get a problem-effectively a management plan for oil spills. That will involve another part of our own Department and part of the Department of Transport and we would want to put in place a whole set of action plans so that we would know what to do if any of these things happened.

SENATOR RICHARDSON -Can I take the opportunity just to say two things to Senator Puplick in response to earlier questions because I have people digging things out as we go here so that they do not miss too much. I think you asked about a meeting of the Seamen's Union and other unions. We invited the Merchant Services Guild, the Seamen's Union, the Marine and Power Engineers and the Marine Stewards. I think they were all represented except the Marine Stewards when the meeting finally took place. I forget the names of the officials concerned, but I do not think that matters very much, but if you want to know we will chase that up. In the other respect you were talking about if the companies were advised about my preferences. On page 31 of the DAS review, paragraphs 565 and 566, it states that the brokers advised a list of 10 companies-I will not read them out-and they advised them of my preferences. Included in the dot points amongst my preferences is an Australian-built vessel, and further down the page it says that full Australian crewing is to be achieved as quickly as possible but in keeping with safety and operational viability in Antarctic conditions. That was done on 23 September 1987 and the Cabinet decision was taken a couple of months later.

SENATOR PUPLICK -That paragraph 566, Minister, says that these companies were advised of the new Minister's preferences. Were they in any way distinct from the old Minister's preferences under which this process had been commenced?

SENATOR RICHARDSON -My memory at the time, from talking to Mr Bleasel about this, was that Mr Jones did not have as strong a preference as I did about an Australian-built vessel, but I have never actually asked him, so I will have to rely on my officials here about that. I am not sure.

MR BLUNN -I believe that is correct.

SENATOR RICHARDSON -I had the impression that I was the first one to say that that is what I really wanted.

SENATOR PUPLICK -But that was at least a minor variation, if not a change in the rules, after the game had been started. When the process was started, no ministerial preference was, in fact, indicated along those lines.

SENATOR RICHARDSON -That is probably true. It was not started under me-it had been going for several years. I just wanted to make sure that everyone knew what I thought, as soon as it was practical to do so. At that time I had only been a Minister for about two months.

SENATOR CALVERT -Have you been down to the Antarctic Division, Minister?

SENATOR RICHARDSON -I have been down to Hobart to the Division, but I certainly have not been to Antarctica-I thought that is what you were saying. I hope to get there on the Hercules, when it is flying in.

SENATOR PUPLICK -Can I ask you about the structure of the Division per se? Over the course of the last 12 months, what has been the staff profile in the Division? How has that changed? I mean in terms of the number of people in the SES who are in that Division.

MR BLUNN -I could not give you the number of people in the Division, but Mr Moncur may have to. In terms of the SES, the whole Department went through a restructuring, I guess within the last 12 months, or very close to it, so I will include that, if I may, the result of which was that I think we reduced the SES positions by one. The reason for that was that we went for higher classifications for all the SES positions, with the intention of looking to enhance the skill bank and the availability of people to the Antarctic Division across-the-board. We ended up with three level 2s and one level 4. Is that right?

MR MONCUR -Two level 2s.

MR BLUNN -Two level 2s and one level 4.

MR MONCUR -There are other classifications--

MR BLUNN -There are two-a doctor and a scientist-who would pierce the SES salary barriers but are not SES officers per se.

SENATOR PUPLICK -Is there a deputy director's position?

MR BLUNN -No, there is not. There is, however, an understanding-that was part of the deal. Instead of going for a general lower level of classification for SES officers in the Division and having a deputy at a middle range, we looked to enrich the whole of the SES structure. The cost of that was to do away with a deputy director position per se, with a clear understanding that one of the SES positions would be identified as being the alter ego of the Director, if I can put it that way, as needed.

SENATOR PUPLICK -But the joint management review recommended that there should be a deputy director's position?

MR BLUNN -Yes.

SENATOR PUPLICK -It was simply that you looked at that and decided otherwise?

MR BLUNN -Yes. That was in a particular context, and we changed the context.

SENATOR PUPLICK -Does the Director, or whoever is the Acting Director from time to time, participate in the meetings of the consultative parties in terms of the general administration of the Treaty, and other meetings of sub- committees, scientific committees and the like, which take place as part of the treaty regime?

MR BLUNN -The Commonwealth is represented in all of those, as appropriate, the officers of the Antarctic Division are involved; and on occasions I know the Director and the Acting Director have been involved.

SENATOR RICHARDSON -Mr Bleasel has certainly been to the meetings that you refer to. The Treaty meetings are held every couple of years. There is one later this year. I hope we can say that the Acting Director has been to that, if he is still acting at the time.

MR BLUNN -There is a clear responsibility in the Department of Foreign Affairs , of course, for the Treaty.

SENATOR ARCHER -I have a few questions that I would like to ask, and I will start with a few on the Lady Franklin. How old is the Lady Franklin ?

MR MONCUR -I think it is something like 11 years old.

SENATOR ARCHER -Does she comply with the special purpose code, Safety of Life at Sea, 1974?

MR MONCUR -No.

SENATOR ARCHER -Or the 1988 amendments?

MR MONCUR -I do not know the 1988 amend- ments but I assume the fact that she does not comply with the original would mean--

MR KENNEDY -Those codes, of course, do not apply to ships of that age. They apply specifically to ships that are built after that date.

SENATOR ARCHER -That is exactly the point I was going to make. Why do we use ships that do not comply with what are now required to be the minimum standards when minimum standard ships are available?

MR MONCUR -I think you are probably alluding to the Baltwind, but when that was offered to us it did not meet that standard.

MR BLUNN -I think there is only one ship that does comply fully with all of that.

MR MONCUR -There are two that we know of. One is the Icebird and one is the Russian--

MR BLUNN -I am sorry; I meant that could possibly have been available to us and we have got her.

SENATOR ARCHER -I have been told previously that the Lady Franklin has helicopter carrying capacity and is approved by the Civil Aviation Authority. Is this sort of authority given in writing, is it verbal or what? Do we have this authority in writing?

MR MONCUR -That information came to us from the helicopter operators, whose responsibility it is to establish that the vessel is suitable to operate on. We could go back to them and ask them whether it is in writing.

SENATOR ARCHER -Thank you. I understand that the vessel has been stated as being suitable for the operation of helicopters but I have also been told that the helicopters have been operated off the ice. If the vessel is suitable, has it been necessary to operate off the ice?

MR MONCUR -There are many situations where it is advantageous to operate off the ice when you are unloading cargo, and it is up to a voyage leader to make a judgment.

SENATOR ARCHER -Was the vessel surveyed as a cargo vessel or as a special purpose vessel?

MR MONCUR -It clearly cannot be surveyed as a special purpose vessel because it is not.

SENATOR ARCHER -If it is carrying passengers and going into particularly hazardous locations, is this not now covered under the regulations requiring special purpose approval?

MR MONCUR -That is a goal that people are moving towards but, because there are not special purpose vessels available, vessels which otherwise meet the requirements are considered and are accepted.

SENATOR ARCHER -If it is then treated as a cargo vessel, what do you do with people? Do you put them under decks as well?

MR MONCUR -That is correct. In this case, the vessel has been modified to have accommodation units under the deck.

SENATOR ARCHER -Are there not extra hazards with having people confined under decks?

MR MONCUR -These are all covered by the regulatory authorities who put various controls on this sort of operation.

SENATOR ARCHER -And are they satisfied?

MR MONCUR -Yes.

SENATOR ARCHER -What is required under the regulations as far as carrying helicopters is concerned?

MR MONCUR -From our perspective it is that the Department of Transport is satisfied.

SENATOR ARCHER -You mean satisfied that the ship will carry them and that they can be adequately secured?

MR MONCUR -And they can be landed, yes.

SENATOR ARCHER -And that they can land on board?

MR MONCUR -Yes.

SENATOR ARCHER -I saw comments about the use of the radio, or the standard of the radio. The comments were passed in October 1988 by the radio surveyor saying that there were hopelessly inadequate communications. Is that correct? Was that correct at the time?

MR MONCUR -I would accept the judgment of the surveyor and that they needed to be improved, which they were.

SENATOR ARCHER -Was the situation like that in 1983-84 and early 1988?

MR MONCUR -I assume that it was, but before we pass off that question, I should say that we do provide the ship with an inmarsat system, which is a highly sophisticated satellite system which ensures that we have a backup well beyond what is required. It is something that arose out of recommendations from the Nella Dan inquiry after it was beset three or four years ago.

SENATOR ARCHER -But in the meantime--

MR BLUNN -So it had a good radio on board?

MR MONCUR -Yes.

SENATOR ARCHER -But what about 1983 and 1984?

MR MONCUR -I can only assume, I was not there.

SENATOR ARCHER -What about in January 1988?

MR MONCUR -I can only assume that it had the same radios on then, but I cannot confirm that from personal knowledge.

MR BLUNN -But the 1988 date was subsequent to the decision to put inmarsat radio on.

MR MONCUR -For the last two seasons we have put inmarsat on it.

SENATOR ARCHER -But it was in October 1988 that the inspector said that there were hopelessly inadequate communications.

MR BLUNN -That is the shipboard communications, we assume, excluding the additional equipment that we had put on for safety purposes, which we believe boosted it, as I understand.

SENATOR ARCHER -Can you check that and see whether what you believe is the same as--

MR BLUNN -Yes.

MR MONCUR -I can be certain that the inmarsat system was on the ship in October 1988.

SENATOR ARCHER -But it was not qualified by the inspector to that effect?

MR MONCUR -It is something that does not come within the inspector's normal purview, but it is much better than what is needed.

SENATOR ARCHER -What sort of range would she have had without that?

MR MONCUR -I noticed the comment that it had a range of one day. In fact, I do not put much cognisance in that sort of comment, and my training as a communications engineer--

SENATOR ARCHER -He is the inspector.

MR MONCUR -It depends very much on frequency, ionospheric conditions, and, for example, it is possible with 100 milliwatts to have a range all around the world and it is also possible for a kilowatt not to get more than 100 miles or so under certain conditions. That, I find, is a surprising comment unless it was made in a general way because there are enormous variations in terms of this.

SENATOR ARCHER -I do not think you could rely on the inspector making flippant comments about it. I think he would have to have been reasonably satisfied before he would--

MR MONCUR -I am not saying that it is a flippant comment, but I am just cautioning about saying that you can actually make that statement. He might be saying, `In general, it did not seem to be more than a day's range', but in practice I am explaining to you that it is quite a different situation.

MR BLUNN -Yes.

MR MONCUR -The inmarsat gave the worldwide coverage.

SENATOR ARCHER -Right. Was it in the full meaning of the word a double-skinned construction?

MR BLUNN -No.

SENATOR ARCHER -Could she survive if she was beset in heavy ice like the Nella Dan was in 1985?

MR MONCUR -That is a judgment that I could not make, but what we do know is that it has been in enormously heavy ice in Canada on many occasions and has survived.

MR BLUNN -The Nella Dan was not double skinned.

SENATOR ARCHER -Yes, that is right, but where is the Nella Dan?

SENATOR RICHARDSON -It is not because it is double-skinned!

SENATOR ARCHER -Is it correct to say that when she recently returned she was found to have water from the double tanks leaking into the hold?

MR MONCUR -There was a water leak but not a structural one. This was from a stabilisation tank which had a crack in it.

SENATOR ARCHER -How dangerous is it to have leakages of this nature?

MR MONCUR -My advice is that this is a minor thing that does happen on ships. It is not dangerous.

SENATOR ARCHER -Was the damage reported to the inspector?

MR MONCUR -I do not know the answer to that but I am not even sure that that is a requirement.

SENATOR ARCHER -Could you check for me and give us that later on?

MR MONCUR -Yes. The Secretary has pointed out that it would be up to the ship, which is correct, but I guess you are asking us if we could find out whether they did.

MR BLUNN -We will find out for you; there is no question about that.

SENATOR ARCHER -I have a concern from the safety aspects of some of these things and I believe that most of these regulations are in force for a purpose . If they are not, then I am for getting rid of them.

SENATOR RICHARDSON -I have a comment on that. I want to put a few things on record about your general questions as to the safety of the Lady Franklin. It was one of five vessels that were tendered for for the 1988-89 season. None of them fully complied with the specified requirements that we had laid down. Only two of them-that is not very many, I have to concede-met the requirements except for not being double-skinned around the engine room and for not having a full science capability. The charter price for the other vessel which was the Baltwind was $2m more than the Lady Franklin. When the brokers checked, Mr Schulz had offered the Baltwind and the owner of the Baltwind said that he did not have the power to offer it anyway, or to negotiate. In effect the Lady Franklin was certainly the cheapest ship which was available and came closest to fulfilling the specifications.

In terms of the general concern about safety, it was inspected by a marine surveyor from the Department of Transport and Communications before it left for the Antarctic. The surveyor found that, except for two minor deficiencies, the vessel complied with all of the relevant international safety standards, including the Canadian standards, which we obviously looked at fairly closely because of the work that the Lady Franklin has to do over there, and so he pronounced it fit for the voyages that were planned. Given the deficiencies that he nominated were fixed before it departed, I do not really believe that the Division could have done any more to select a safer vessel.

SENATOR ARCHER -Are you saying that you have saved $2m by using the Lady Franklin?

SENATOR RICHARDSON -As against the Baltwind, yes.

SENATOR ARCHER -As against the Baltwind.

MR BLUNN -The Baltwind has had an accident, anyway.

SENATOR RICHARDSON -I have just been informed, and I did not know this, that apparently the Baltwind has had an accident anyway.

MR MONCUR -Perhaps accident is the wrong word, but its bow was damaged. The Italians actually took it up and the bow was damaged and split and had to be repaired in Antarctica.

SENATOR CALVERT -I would just like to refer back to the question I asked earlier. Was the Polar Queen one of the ships that was offered?

MR MONCUR -I answered it then, and I still do not know the answer.

SENATOR CALVERT -You do not remember it?

MR MONCUR -I do not remember it, no.

SENATOR CALVERT -It was regarded as a good ship. I just thought it might have been one that was--

MR MONCUR -I think the reason may well be that it did not meet our cargo requirements. I think it has a very low cargo capacity. We would have to find that out.

MR BLUNN -We will find out for you.

MR MONCUR -I certainly do not remember its being in contention.

SENATOR RICHARDSON -There are only two that were in contention.

MR MONCUR -Yes.

SENATOR ARCHER -Has the operating cost of the Lady Franklin been within estimates this year? Has she performed what she was intended to do, and has she done it within the running costs, as estimated?

MR MONCUR -Certainly, in cost terms she has done it within the costs estimated . It was a fixed price so there was not any question. In terms of whether she has done what she was meant to do, she has done 90 per cent of what we originally planned, but it is a fact that quite often, due to ice and other conditions in Antarctica, we have to adjust things. The Lady Franklin did not complete a voyage to Commonwealth Bay, although it did the bulk of that voyage very successfully. Because of problems we had with Icebird getting into Mawson we cut short another voyage of the Lady Franklin so that we could use it as a buffer in terms of getting it back to Hobart. That was not because of shortcomings of the vessel though.

SENATOR ARCHER -On what date did the Lady Franklin go off the first time?

MR MONCUR -It was early November, I think.

SENATOR ARCHER -Was the trip run to time?

MR MONCUR -My impression is that it went to time until it got into the Commonwealth Bay area and, because of the ice in the area, it got to a stage where we made a decision that spending more time finding a way through would have used up an excessive amount of time.

SENATOR ARCHER -It went to Commonwealth Bay but it did not quite make it?

MR MONCUR -That is right. It went to the Commonwealth Bay region. Commonwealth Bay is quite a small bay. It was about 160 miles off.

SENATOR ARCHER -What was it supposed to do there that it did not do?

MR MONCUR -There were three programs. One was related to remeasuring deflections on Mawson's Hut to see whether deterioration was getting worse; there was another geology program; and there was a program to extend a field hut at Commonwealth Bay to provide a base from which restoration or other work could be done on Mawson's Hut in the future and also a scientific base for work in the region. Half of that hut had previously been put up, so it was an extension. There was another project in the same area which it could not complete, which was an exact determination of the south magnetic pole-again because of the ice.

SENATOR ARCHER -Did she have equipment to leave there or anything that she could not leave?

MR MONCUR -The hut extensions could not be left.

SENATOR ARCHER -What happened to them?

MR MONCUR -They have come home again.

SENATOR ARCHER -How close was she, in fact, to being caught in the ice?

MR MONCUR -Not close at all.

SENATOR ARCHER -She was some days mooching along at 1.24 knots, which is only the speed of an iceflow.

MR MONCUR -I think you are measuring the distance travelled, but when you are actually searching for a way through ice you move in one particular direction and, if that is not successful, you come back and move in another direction. So the end result is that you might have moved only 36 miles in 24 hours, which might be that sort of average speed but much of that time it would be travelling quite quickly.

SENATOR ARCHER -I notice in answer to another question some time ago we were told that the master had specific instructions not to enter the heavy ice.

MR MONCUR -Yes.

SENATOR ARCHER -Heavy ice came to the Franklin I suppose.

MR MONCUR -No. He did not go through that heavy ice. He went and he looked and , if it was heavy, he and the voyage leader made the decision not to go through it.

SENATOR ARCHER -Did the ship call at Macquarie Island as well?

MR MONCUR -Twice on that voyage.

SENATOR ARCHER -Was there not some mess-up with equipment there? Was it left in Hobart and should have gone, or was it left at Macquarie when it should have gone to Hobart-one or the other?

MR MONCUR -There was some equipment that should have been taken to Macquarie, which was missed.

SENATOR ARCHER -How did it get there?

MR MONCUR -We asked the RAAF to advance one of its normal training flights that it does for us, and it agreed to that and made an airdrop.

SENATOR ARCHER -What did that cost?

MR MONCUR -Very little: I think we were up for the costs of accommodation of the RAAF crew in Hobart and some travelling expenses.

MR BLUNN -I think the important thing about that is that it was not an additional cost anyhow. It was a training flight that would have taken place- all we did was reschedule. The leaving of the equipment did not cost us any extra. That is right, is it not, Mr Moncur?

MR MONCUR -Yes.

SENATOR ARCHER -We put it on the Defence budget instead.

MR BLUNN -No. It was a training flight anyhow. The RAAF people would have done it anyhow.

MR MONCUR -I will qualify that slightly: it may turn out to be an additional training flight. They may still do the ones that we are going to do.

MR BLUNN -That is their decision.

MR MONCUR -That is their decision, and they feel it is still worthwhile doing.

SENATOR WATSON -This morning when we were questioning you in relation to the Lady Franklin, you said that the only instructions that you gave were to the captain not to take risks. The answer that you have just given is at variance to that answer. Could you explain, please?

MR MONCUR -I guess I am using the terminology broadly, and I see not going into heavy ice as not taking risks, so I essentially see those as being exactly the same answer.

SENATOR RICHARDSON -It depends on how you define risk.

SENATOR WATSON -When you were questioned on this, we were concerned about the entry of that vessel into conditions of heavy ice. We asked you specifically what your instructions were and your Secretary said that perhaps it was an area where the instructions should be more specific. Just now you have indicated that you gave specific instructions not to move into heavy ice. I mention that that is at variance with what was said earlier. Could you further explain?

MR MONCUR -I actually think it is the same answer: Do not take risks. Moving into heavy ice is the risk, but I think--

MR BLUNN -Could I try to elucidate that? I think the problem is that if you specifically said, `Do not go into heavy ice', the senator is saying that that is not what we said this morning.

SENATOR WATSON -That is right.

MR BLUNN -If you said, `Do not take risks', and taking risks would involve going into heavy ice, that is the same thing.

MR MONCUR -I would have to say that this was a discussion I had with the voyage leader and, of course, it went across the whole question: Do not take risks and do not move into heavy ice.

SENATOR RICHARDSON -I have not been involved in discussions with the captain or anyone, but one would imagine that the captain, when he is out there doing what captains do, presumably at that time has to assess the risks. If he has been told, obviously, that we are concerned about the area and about the Lady Franklin, he has to go in there and determine what is a reasonable thing to do and what is not.

SENATOR WATSON -There were warnings, Minister, given to the Department by experienced people about the construction of the ship and its suitability in relation to heavy ice conditions. That is the background to the questioning on what specific instructions were given by the Department. Acknowledging the problem and acknowledging that they had received that advice, there had been a degree of responsibility for those on board to ensure that adequate precautions were taken. It is something of a concern to me that this morning we were told in answer to specific questions relating to the ship, its construction, the safety of the crew, the fact that there were cables across which they had to move and they had to go up a ladder if the lights went out or if the water went into the room, that there were problems associated with the ship. They were not problems unless they went into fairly dangerous conditions. I am concerned, therefore, that you seem to have elaborated this afternoon, or given a slightly different answer-a very different answer, in fact-to what you gave to the Public Accounts Committee earlier. we have had two variations of the answer and I think the Secretary to the Department has acknowledged the difference. I ask you again: `What further instructions were given?'.

MR MONCUR -It was a discussion about going into heavy ice and about risk, and both of those answers are correct.

SENATOR WATSON -There were no actual guidelines set down; only a discussion. You did not feel it was necessary to safeguard your reputation and safeguard the crew by giving written instructions about the suitability for different types of conditions; you just left it to the captain following a general discussion about not taking risks, obviously, if you encounter heavy ice. I presume, going to the Antarctic, that is to be expected.

MR MONCUR -Remember we were taking down a vessel that has performed exceptionally well in these conditions in the past. We were faced with some external criticism. We are quite confident of its ability to do these jobs. I said to the voyage leader, `Given this situation, do not take risks; do not go into heavy ice'.

SENATOR RICHARDSON -I do not know what else you could do.

SENATOR ARCHER -There is one more area of discussion that I would like to open up and that is concerning sledges. I understand that ultimately we have had sledges delivered from Germany. Is that correct?

MR MONCUR -Yes.

SENATOR ARCHER -They got to Hobart?

MR MONCUR -Yes.

SENATOR ARCHER -They went down to the South Pole?

MR MONCUR -No, we have not been able to get them down.

SENATOR ARCHER -And they got back?

MR MONCUR -Which ones?

SENATOR ARCHER -The last lot?

MR MONCUR -No, they are not back. We have not been able to get them down because of the ice conditions.

SENATOR ARCHER -But they have been down for the ride?

MR MONCUR -They went for the ride, yes.

SENATOR ARCHER -I find quite extraordinary the train of events that leads up to this. As I understand it, you had tried two or three different sledges in the past. You then decided that we could improve on those and design them locally and build sledges in Australia. Tenders were called and three sledges were built and taken down there. There was an option which gave you the right to have another one built by the same manufacturer or not, as you chose, and at that point you chose not to. To the best of my knowledge, as of a couple of months ago, although it was decided not to, I understand that the materials for sledge No. 4 were still left with the manufacturer of the first three. Is that still correct?

MR MONCUR -I do not know whether it is still correct.

SENATOR ARCHER -You do not know whether the material is still there?

MR MONCUR -No. I know that there has been some debate about the return of that material.

SENATOR ARCHER -What rent are you paying for the space that this takes up or anything like that? It has now been there for 15 months or 18 months or something.

MR MONCUR -I do not believe we are paying any rent.

SENATOR ARCHER -I would not bet on that. I do not think it is reasonable that somebody should provide the Government with free storage. I think it is one thing if they have been given a clear indication that there was material for four and that if the fourth one were to be built they would get the instruction, and to provide the material to be giving it housing, and then to find out in devious ways that others have been ordered and that the mind of the organisation has been changed. Do you not see it as somewhat different?

MR MONCUR -I think so. I do not know the details of where those negotiations are at, but I think it is something between the Division and the manufacturer to decide whether a time has been reached when he wishes to return the material to us. That may well be the time we are up to, if he is concerned about the storage costs.

SENATOR ARCHER -As I understand it, the sledges were built and he was told that he had to have them completed by the beginning of December 1987. They went off to the Antarctic late in December 1987 or early in January, in fact. We were then told that because of the time constraints it was necessary to put in the order for the ones in Germany by March. It was also said that there was such a great degree of urgency that we were going to avoid the normal practices of calling tenders and inviting anybody in Australia to even give a price or to suggest alterations to the design or anything. Why would it have been so urgent in March to place an order without even calling tenders?

MR MONCUR -We had enormous problems with these sledges. In fact, only in the last day we have got photographs back and advice from the plant inspector, and I can pass these around, but we have had bent beams, and additional plates that have had to be welded to them to get them by.

SENATOR ARCHER -Who designed them?

MR MONCUR -They were designed by a consultant which the Antarctic Division employed.

SENATOR ARCHER -Were they built in conformity with the requirements? Was there any defect in the construction of them?

MR MONCUR -The advice, and this is only just in the last few days that we have had the plant inspector back, is that his view is that there are workmanship problems, as well as design problems. But design problems are the prime problem.

SENATOR ARCHER -Why has it taken 12 months to get that advice? There has been no mention of this for 12 months.

MR MONCUR -I agree with you.

SENATOR ARCHER -The question has been asked on probably 40 occasions.

MR MONCUR -Because I have only got this information in the last few days, I need to follow that up.

SENATOR PUPLICK -Who approved the designs?

MR MONCUR -One of our engineers who has since left.

SENATOR PUPLICK -He was obviously a prescient engineer.

SENATOR ARCHER -Are there no alliners that have had any trouble?

MR MONCUR -The alliners have had the sort of trouble that you have in terms of maintenance; I mean, sleds do need to be maintained and fixed. But they have not had these fundamental sorts of problems.

SENATOR ARCHER -One of the officers who did time down there the year before last, was, in fact, engaged in trying to load the alliners on top of the Australian built ones, to get them back to base. It did not happen the other way around. If nobody has told you that, I am surprised.

MR MONCUR -I am aware of that but--

SENATOR ARCHER -That was only because the alliners totally broke down, and they could not drag them.

MR MONCUR -I think what we are talking about is a problem with an alliner which was not a fundamental problem. One sled is relatively light; we had repaired the Tasmanian sleds, and one of them was sufficient to return an alliner. This is a recommendation from our station leader, who has come back. He said that only the tried and proven alliner sleds should be considered for future traverse work. They are cheaper, more reliable and will result in greater peace of mind for our traverse crews. That is his recommendation.

SENATOR ARCHER -How many did we buy this year?

MR MONCUR -I think it was three.

SENATOR ARCHER -What did they cost, landed Hobart?

MR MONCUR -I cannot give you the number.

SENATOR ARCHER -Could you please provide that? Was the manufacturer of the Australian built ones, or his consultant engineer, given the opportunity to discuss the modifications that were necessary to bring these up to standard? Are not the matters you are talking about, matters that were drawn to the attention of the Division by the builder at the time he built them, with suggestions as to where they would go wrong unless they were modified?

MR MONCUR -I am not aware of the details of some of those questions. But the key problem is that until we can actually bring these sleds back and go through them in detail here with him, we will not resolve those problems.

SENATOR ARCHER -Is the manufacturer of those sledges ultimately going to be permitted to at least have a look at them?

MR MONCUR -Certainly.

SENATOR ARCHER -Good. Is it reasonable that if we are able to produce sledges of the right nature in Australia that they should be built in Australia, and that they should not be rushed off to Germany to fit somebody's whims just because he believes that something is the case?

SENATOR RICHARDSON -If we are prepared to build a ship here, I think we should be prepared to accept Australian built sledges, if they are acceptable designs and they work.

MR MONCUR -That is the key question. We have to have a safe, reliable sledge.

SENATOR ARCHER -It is absolutely bread and butter on the ice, is it not?

MR MONCUR -Yes.

SENATOR CALVERT -The Auditor-General was rather critical of asset control in the Antarctic Division. For instance with assets totalling something like $28m , in the last Auditor-General's report on audits on 31 December 1988-that has come out in April-he said that on a sample his office had done 8 per cent of the items selected could not be located, 18 per cent were apparently at Antarctic stations, and 40 per cent may have been located, but could not be positively matched to asset records. Do you have the matter in hand? Are you altering your asset register and recording processes?

MR MONCUR -Yes, we have a plan to improve our total asset control. It is a plan which has been in place now since 1983, but it is a substantial job. We appointed an assets clerk. The Auditor-General, in fact, indicates that he is quite supportive of the plan and the process that we are introducing, but is questioning the speed at which it is being done, which is a resource question. Regarding the other point that you make, that sample was a head office sample when the majority of our effort at that time had gone into getting the Antarctic station side of it up to scratch.

SENATOR CALVERT -I quote from the report where the Auditor-General says that the audit found that asset control within the Division remains unsatisfactory.

MR BLUNN -We are agreeing. We have a strategy to fix it. It is necessarily going to either divert resources away from other tasks or is going to take some time. That is a real management problem for us which of those--

SENATOR CALVERT -I think it would be a physical problem to do your audit down in Antarctica, anyway.

MR BLUNN -That is what we are saying-we have concentrated on doing the audits down there. We have not concentrated on doing them in Hobart. The stocktakes are done.

SENATOR WATSON -What were they worth?

MR MONCUR -I think in most of those cases there were explanations which made sense. I cannot say what the prices--

SENATOR WATSON -Have they been destroyed?

MR MONCUR -No, I think it was a question of an item which should have been on the books in Kingston and had in fact been transferred to Antarctica. It was a question of location. There were those sorts of explanations for many of those things.

SENATOR WATSON -Can you give a detailed response to the Auditor-General's query to this Committee about the locations and items and what has been done?

MR KENNEDY -We have responded to the draft report, have we not?

MR MONCUR -Yes.

MR KENNEDY -We responded when it was a draft report.

MR BLUNN -If you want an elaboration of that we will get it for you. We will find that information for you.

SENATOR PUPLICK -On page 14 of the document we have two matters relating to $ 100,000; one has been offered as an offset saving in plant and equipment expenditure for separation payments and we have the separation payments relating to the early retirement of the director. Additional funds there of $ 150,000 and $50,000 are being offset by an increase in Consolidated Revenue and the remaining $100,000 in the program are about savings on plant and equipment. Could you elaborate a little on what exactly relate to those two items?

MR BLUNN -You are asking for an explanation of what

was--

SENATOR PUPLICK -Yes. What is the $100,000 in terms of savings in plant and equipment expenditure?

MR BLUNN -I will ask Mr Moncur to confirm this but I believe the answer to that is that what we have done is defer some expenditure on plant and equipment.

SENATOR PUPLICK -What plant and equipment? Is anything specified or can you just defer $100,000 worth off the total budget?

MR BLUNN -Yes, we will buy it early next year rather than this year. I suppose if you go into perpetuity something eventually might fall off the end, but not for a long long time.

SENATOR PUPLICK -What are the actual funds required for the separation payments in relation to the former director or retirement of the former director?

MR BLUNN -The separation payment would consist of a number of elements. He would be entitled to any recreation leave that he was entitled to, he would be entitled to furlough, and any other outstanding things of his normal entitlement in addition to that. In this case he was paid in accordance with the Government decisions of the equivalent of 48 weeks plus four weeks recreation and so it was the equivalent of one year's salary.

SENATOR PUPLICK -What is the actual all-up cost of the separation? What did Mr Bleasel walk away with before the tax man got him?

MR BLUNN -That would depend on what he did with superannuation and a whole host of things. In terms of what additional payment he got because he retired early, it would be $67,000. I think the figure that he actually got as a result of that determination was $67,887.

SENATOR PUPLICK -In the submission which the Department made to the House of Representatives inquiry into tourism In the Antarctic, you say in part:

There is inadequate knowledge at present on which to base an assessment of the likely environmental impacts of substantially expanded non-governmental activity in the AAT.

Are there any plans in hand to increase the baseline of knowledge in relation to that particular matter as a specific exercise?

MR BLUNN -We are certainly increasing our database information on the Antarctic. Until we have a decision on that, it is a question of how much resources you put into that as against something else, but certainly the establishment of databases generally is regarded as important and in the Antarctic that is what we are doing.

MR MONCUR -Yes. We are certainly putting effort into databases but the question of actually focusing the effort on, say, a particular area where a tourism proposal might be does not make sense until there is a policy decision that that is going to happen-that there is going to be any tourism at all. There is no evidence of that at this stage.

SENATOR PUPLICK -Not a policy decision exclusively for the Australian Government, of course-you know that there is going to be some increase in tourist activity, even if it is not Australian based or derived from Australian public policy.

MR MONCUR -I think for us to divert our resources to, say, the concept of a tourism proposal at a particular point so that we can answer those questions does not make sense until there are real proposals.

SENATOR PUPLICK -So there are no specific proposals in front of you for analysis at the moment?

MR BLUNN -No, although I think it would be fair to say-and Mr Moncur can correct me if I am wrong-that the areas that would be used for tourism are areas for which we are basically involved in establishing databases for other reasons.

MR MONCUR -Certainly, the pressure on the Vestfold Hills means that we have put a lot of effort into that area but we hope it is not--

SENATOR RICHARDSON -I would just like to make one comment on that: there was a request from Mr Helmut Rohde-I cannot remember when but it would be probably 12 months ago or something of that nature-to have someone sent down. I think he wanted two or three on the program this year going to the Antarctic to further his proposals. I was certainly against that occurring because, in terms of balancing it with other people who might have gone down, I could not see it as our priority. We did not contribute in that sense.

ACTING CHAIRMAN (Senator Maguire)-I thank the witnesses.