Senator Claire Chandler – Estimates questions relating to Australian funding of UNRWA

Photo of Senator Claire Chandler
February 15, 2024

I’d like to go back to UNRWA questions, please. The current UNRWA agreement that I can find which is publicly available is the 2016-2020 agreement. Mr Innes-Brown, in your testimony to Senator Green earlier I think you implied that the current agreement that is in place with UNRWA is just that same document that we’re rolling over and changing the years on; is that correct, or have I paraphrased somewhat?

Senator CHANDLER: I’d like to go back to UNRWA questions, please. The current UNRWA agreement that I can find which is publicly available is the 2016-2020 agreement. Mr Innes-Brown, in your testimony to Senator Green earlier I think you implied that the current agreement that is in place with UNRWA is just that same document that we’re rolling over and changing the years on; is that correct, or have I paraphrased somewhat?

Mr Innes-Brown: I think you’re close to the money or, if not, on the money, Senator. It was extended on an annual basis and the most recent extension ran to the end of last year, 2023.

Senator CHANDLER: Are the terms and conditions within the 2016-20 agreement therefore still current?

Mr Innes-Brown: Well, it’s the agreement. We haven’t extended it at this moment. Yes, the core agreement is the one you have.

Senator CHANDLER: My understanding is that agreement stipulates a percentage of funding to be withheld and paid at a later date on the basis of performance and compliance considerations et cetera under the contract. Did that happen this year?

Mr Maclachlan: It happened in the previous financial year. The announcement of the $20 million disbursement to which the minister referred was announced in September 2022; $18 million was disbursed in December of that year, and $2 million was disbursed in May of 2023.

Senator CHANDLER: Was that $2 million, in effect, the quarantined element?

Mr Maclachlan: The $2 million was paid after a partner performance assessment, which was finalised shortly before the $2 million was paid.

Senator CHANDLER: In estimates in June last year I had a few questions about this issue. The department said that there was some sort of strategic review underway into the UNRWA contract. Was that review underway when the $2 million was disbursed in May last year?

Mr Maclachlan: I don’t think so. I’d have to double-check for you.

Senator CHANDLER: If you could take that on notice, Mr Maclachlan, that would be appreciated. None of the $20 million that would otherwise be required under this agreement has been disbursed to UNRWA in the 2024-2025 financial year?

Mr Maclachlan: As Mr Innes-Brown indicated, the agreement that runs 2016-2020 was extended on an annual basis until the end of 2023. We’re negotiating a new agreement with UNRWA, a new partnership framework—if that’s right the word—agreement with UNRWA. That negotiation is underway. It’s not yet finalised, but of course our disbursement for this financial year, as already has been indicated, has already been paid.

Senator CHANDLER: I’m getting my financial years confused here.

Senator Wong: You asked about the 2024-25 financial. We’re not in that financial year yet.

Senator CHANDLER: Sure. So 2023-24?

Mr Maclachlan: The disbursement has been made for the 2023-24 financial year. The disbursement was approved and made in October last year.

Senator CHANDLER: The $18 million was in October?

Mr Maclachlan: No, sorry; two different financial years. This financial year we’ve disbursed $20.6 million as core funding—our core contribution to UNRWA. In the previous financial year we disbursed $20 million in two payments, but the full $20 million in that financial year.

Senator CHANDLER: Why didn’t you do the $20.2 million in this financial year in two payments?

Mr Maclachlan: An $18.6 with a separate $2 million?

Senator CHANDLER: Yes.

Mr Maclachlan: We came to that view, I think, having done a number of examinations of UNRWA. Those included the performance assessment that had been done in May last year, in addition to some of the discussions we were having with UNRWA, and in addition to reporting from UNRWA of its critical financial need particularly, which was highlighted to us in July last year, of a shortfall of US$190 million, $60 million falling in September-October. At the time the decision to disburse was made the crisis was underway. The need was already becoming apparent and was only going to grow, we felt. At the time I approved the disbursement the death toll was already over 4,000 in Gaza and the ground operation hadn’t yet begun. We felt the need justified us making that payment. There was some other work that we had done also to assure ourselves of the need for that payment.

Senator CHANDLER: Had you undertaken the usual compliance assessment that you would have to undertake under the agreement to disburse that full amount?

Mr Maclachlan: As has already been indicated, the department takes very seriously the risks associated with UNRWA, and as highlighted, if you like, by the decisions on 27 January. We go through a number of assurance processes. The most basic of these frankly is regular engagement with UNRWA through its donor advisory group with our bilateral partners. A lot of this is done on a regular—not quite weekly—fortnightly basis in Ramallah. We undertake, as I have mentioned, the annual partner performance assessment, which we had done in May. Mr Innes-Brown’s team—

Senator CHANDLER: But that performance assessment was in effect for the previous financial year, not for this one?

Mr Maclachlan: It was, but of course at this point we hadn’t disbursed any money to UNRWA. In addition, Mr Innes-Brown’s division undertakes regular risk-register reviews. We also undertook a baseline plus due diligence assessment, which was completed in October 2023. In addition to that, there was an independent review of the Occupied Palestinian Territories humanitarian and development program for 2019-2022. Again, it’s core findings were complete by mid October as well. These were all designed to test our understanding of what UNRWA is doing with regard to counterterrorism, with regard to counter-fraud, with regard to countering corruption in its operations. Those measures all indicated to us that there were not issues that would prevent us from making the disbursement. That was also borne out, albeit subsequently, by some of the reviews that had been undertaken by like-minded partners, including, for example, the EU, which reported in November, and Germany, which reported in December. We’re not alone in wanting to be assured, to test UNRWA’s policies and procedures to make sure they’re up to our standards. We work very closely with like-mindeds to satisfy ourselves that they have done what they can to satisfy those concerns.

Senator CHANDLER: What are the specific obligations in your funding agreement that UNRWA has to meet, in terms of ensuring that it isn’t supporting extremism or terrorism?

Mr Maclachlan: The funding agreement is available on the webpage. It does contain chapters that deal very specifically with counterterrorism, with countercorruption, with countering fraud. Maybe Mr Innes-Brown is able to add further.

Mr Innes-Brown: As Mr Maclachlan said, there are a range of obligations: anticorruption, fraud, child protection, transparency, counterterrorism and compliance with counterterrorism UN Security Council sanctions. There are reporting obligations both in a narrative form and in financial reporting and evaluation. There’s a range of undertakings.

Senator CHANDLER: What standard of proof does UNRWA have to provide to satisfy the department that it’s met those obligations, generally? Specifically, I’d like to know how the department was satisfied that they were met in relation to this financial year’s funding.

Mr Maclachlan: From our point of view, it’s understanding that UNRWA has in place the procedures and processes that enable it to verify that money is not going into the wrong hands. We look to UNRWA to satisfy that those are operational. Indeed, the independent review that I referred to found that not just UNRWA but all of our partners in the oPt had in place proper processes to verify and assure us that money was going to the intended recipients.

Senator CHANDLER: Specifically, what steps did the department take to ensure that these contractual obligations were being satisfied between July 2023 and the $20 million annual payment being paid in full to UNRWA? You’ve talked a lot about the justification behind making that payment in full, but how did you satisfy yourselves that the stipulations in the contract, that are rightly there, were going to be satisfied, regardless of when the payments were made?

Mr Maclachlan: I think I just spelt those out, but I will go through them again. It’s not just reliance on any one particular avenue of assurance; it’s a series. It’s layers of assurance that we seek to establish. I can talk about them in reverse. We do it, as I said, through the independent review of the humanitarian and development program in the occupied Palestinian territories, which is not just about our partner UNRWA; it’s about all of our partners. We undertook a baseline plus due diligence assessment, which was completed in October. I’ve mentioned the annual partner performance assessment. That was a look at how the partner had gone in 2022. That’s not irrelevant for our consideration of how things are going. In addition, we engage directly with UNRWA, where, as Mr Innes-Brown mentioned earlier, we test UNRWA on allegations, on its processes.

As we’ve heard already this morning, we’re not the only donor to UNRWA. We work very closely with like-mindeds, some of whom, for example, like the US, the EU and others, are major donors. The US contributed close to $300 million last calendar year. We are all trying to test and assure ourselves and the public that UNRWA has in place proper procedures to deal with these issues.

Senator CHANDLER: Do you think that these obligations that the department places upon UNRWA through its contract can really be considered sufficient when, just a short period of time after the department released the full $20 million-odd to UNRWA for this financial year, we found that UNRWA was under investigation for staff being directly involved in terrorist attacks?

Mr Maclachlan: I think we will be very interested to understand what UNRWA finds from the investigation that is being conducted by the Office of Internal Oversight Services of the UN, and through the investigation that former French minister Colonna is undertaking, on behalf of the secretary -general, to test UNRWA’s procedures. As I indicated, we’re in the process of negotiating a new strategic partnership with UNRWA. We won’t finalise that until we’ve seen what comes out of those reviews. It’s not needed, in a sense, for flash appeals and so on. It will set up our framework for next financial year.

Senator CHANDLER: Do you think it’s likely that the framework for next financial year will mirror the one that’s currently in place?

Mr Maclachlan: I think that I’ll be looking to do whatever we can to ensure that we have the best possible framework in place, as we always do. We build on the past to make sure we have the best in place.

Senator CHANDLER: I have one quick question in relation to some advice that was received by the minister prior to the disbursement, which Senator Birmingham requested in the lead-up to these estimates. Minister, you said in question time last week, in response to a question from me, I believe, that DFAT provided you with this advice prior to the disbursement of the $20 million of core funding. You have declined to release that to Senator Birmingham today. How can it be in the public interest for the Senate to not be able to know the basis upon which the government decided to pay that $20 million to UNRWA when we know that, just a few months later, they were placed under investigation for their involvement in the terrorist attacks?

Senator Wong: I think it’s in the public interest to know why we paid it. I think we have been very transparent. I am happy for officials to keep answering your questions about the process we went through. I responded to Senator Birmingham about why releasing those particular documents—and I expressed the basis of it—was prejudicial to Australia’s international relations. I am happy for you to ask questions about the process leading up to that disbursement, as I think you have been. We’re want to be transparent about that.

Senator CHANDLER: I might come back to that later, Chair.

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