Introduction

1.1 Lobbying activities refer to communications with government representatives in an effort to influence government decision-making — including on legislation, the development or amendment of government policy or programs, the awarding of government contracts or grants, and the allocation of funding.² The Organisation for Economic Co-operation and Development describes lobbying as:

… a fact of life in the public decision-making process. It can provide decision-makers with valuable insight and data and facilitate stakeholders’ access to the development and implementation of public policies. However, it can also lead to undue influence, unfair competition, and regulatory capture to the detriment of the public interest and effective public policies.³

1.2 To help safeguard decision-making processes, governments around the world, including the Australian Government, have introduced lobbying regulatory measures in various forms.

Lobbyist regulation

Overview of the Australian Government regulatory regime

1.3 A lobbyist registration scheme was first introduced in Australia in 1983 but was abolished in 1996.⁴ The current regime was established with the Lobbying Code of Conduct (Code) on 13 May 2008.⁵ The policy objective of the regime is expressed in the Code as:

… to promote trust in the integrity of government processes and ensure that contact between lobbyists and Government representatives is conducted in accordance with public expectations of transparency, integrity and honesty.⁶

1.4 There are three intended outcomes of the regime (refer Appendix 2): Government representatives make informed judgements about lobbyist interests; there is transparent contact between lobbyists and Government representatives; and there is public trust in the integrity of government processes.

1.5 The Attorney-General’s Department (AGD) is accountable for the Code as part of a suite of integrity policies and frameworks applying across the Australian Government. The regime specifies that the policy objective will be achieved through lobbyist⁷ and Government representative⁸ compliance with the Code’s provisions and its main administrative mechanism, the Register of Lobbyists (Register), as shown in Figure 1.1.

Figure 1.1: Australian Government regulatory regime for lobbying

Source: ANAO analysis

1.6 Lobbyist organisations and lobbyists have administrative responsibilities under the Code (refer Box 1), generating administrative inputs that allow the regime to function.

Note a: ‘Clients’ are defined to be an individual, association, organisation or business who: (a) has engaged the lobbyist on a retainer or other income to make representations to Government representatives; or (b) has, in the previous three months, engaged the lobbyist to make representations to Government representatives, whether paid or unpaid. (Attorney-General’s Department, Lobbying Code of Conduct, AGD, 2019, clauses 3.1 and 5.3.)

Note b: Attorney-General’s Department, Lobbying Code of Conduct, AGD, 2019, clause 5.4.

Note c: Attorney-General’s Department, Lobbying Code of Conduct, AGD, 2019, clause 5.5.

Note d: Attorney-General’s Department, Lobbying Code of Conduct, AGD, 2019, clause 5.6.

Note e: The statutory declarations indicate that the lobbyist: (a) has never been sentenced to a term of imprisonment of 30 months or more, (b) has not been convicted, as an adult, in the last ten years, of an offence, one element of which involves dishonesty, such as theft or fraud, (c) is not a member of a state or federal political party executive, state executive or administrative committee (or the equivalent body) (Attorney-General’s Department, Lobbying Code of Conduct, AGD, 2019, clauses 5.6 and 10.1).

Source: Attorney-General’s Department, Lobbying Code of Conduct, AGD, 2019.

1.7 There are three primary outputs of the regime. The first is a public Register that lists all lobbyist organisations, individual lobbyists employed by those organisations and clients of the lobbyist organisations. The objective of the Register is to ensure that:

… lobbying activities will be carried out ethically and transparently, and that Government representatives who are approached by lobbyists can establish whose interests they represent so that informed judgments can be made about the outcome they are seeking to achieve.⁹

The second output is lobbyist organisation and lobbyist compliance with various provisions of the Code (refer Box 2).

Note a: Attorney-General’s Department, Lobbying Code of Conduct, AGD, 2019, clause 7.1.

Note b: Attorney-General’s Department, Lobbying Code of Conduct, AGD, 2019, clause 7.2. This definition includes Commonwealth Government positions and excludes equivalent positions in state government.

Note c: Attorney-General’s Department, Lobbying Code of Conduct, AGD, 2019, clause 8.1.

Note d: Attorney-General’s Department, Lobbying Code of Conduct, AGD, 2019, clause 10.1.

Source: Attorney-General’s Department, Lobbying Code of Conduct, AGD, 2019.

The third output is Government representative compliance with the Code (refer Box 3).

Note a: Attorney-General’s Department, Lobbying Code of Conduct, AGD, 2019, clause 4.

Note b: Attorney-General’s Department, Lobbying Code of Conduct, AGD, 2019, clause 9.

Source: Attorney-General’s Department, Lobbying Code of Conduct, AGD, 2019.

1.8 The Code specifies that, using the administrative information provided by lobbyist organisations (refer Box 1), AGD is to undertake a number of processes that will lead to the required outputs and outcomes. Specifically, AGD must maintain and update the Register; make the Code and Register public¹⁰; deregister lobbyists who do not undertake the required processes to maintain the Register¹¹ or comply with the Code¹²; and inform lobbyists of the intention to deregister them.¹³

The Australian Government Register of Lobbyists

1.9 The Register is a publicly available, searchable database of lobbyist organisations, their registered lobbyists and their clients.¹⁴ Table 1.1 summarises the database as at 3 March 2020.

Table 1.1: Information on the Register at 3 March 2020

Note a: Count excludes non-Australian lobbyist organisations, as well as missing, inaccurate and deactivated ABNs.

Note b: Count is based on total registered lobbyists, including duplicate entries. Some duplicates are due to lobbyists being associated with multiple lobbyist organisations, but four duplicates are repeated entries. There are 558 unique registered lobbyists (excluding duplicate entries), and 208 unique former Government representatives.

Source: ANAO analysis of Register data.

1.10 The Register listed 257 lobbyist organisations and 590 lobbyists, and 1,792¹⁵ clients.¹⁶ Of the 590 registered lobbyists, 227, or 38 per cent, indicated that they previously held an office as a Commonwealth Government representative.¹⁷ Almost all (226) former Government representatives provided a cessation date for their previous office or position, as required.

Alternate regulatory approaches

1.11 Governments may approach regulation through either legislative or non-legislative models. Non-legislative models involve ‘achieving regulatory ends through non-legislative means, such as binding or non-binding guidelines on market participants’¹⁸, and can include light touch or principles-based regulation¹⁹, self-regulation and quasi-regulation. Legislated approaches involve either co-regulation²⁰ or explicit government regulation, which is used where ‘there is a high perceived risk or public interest and achieving compliance is seen as critically important’.²¹

1.12 The Australian Government regulatory regime employs a non-legislated, light touch approach. In 2008, the Prime Minister decided that the Department of the Prime Minister and Cabinet (PM&C), which was responsible for the Code at the time, would not have any significant role in monitoring compliance and that the Code would place the onus on Government representatives to monitor lobbyists’ compliance. The Australian Government has few powers to enforce lobbyist compliance — the only penalty for lobbyist non-compliance is deregistration. Although AGD can and does enquire into reports of lobbyist breaches of the Code, it has no power to compel Government representatives to meet only with registered lobbyists or to report breaches when they become aware of them (refer paragraph 4.18).

1.13 Table 1.2 and Appendix 3 show the key characteristics of the Australian Government regime in comparison to those of other international and domestic jurisdictions.

1.14 While most jurisdictions have a code of conduct and register, key differences include enshrinement of the code in legislation; regulation of in-house lobbyists as well as third-party lobbyists; duration of lobbying prohibition periods for former Government representatives; types of information that lobbyists must report (specific lobbying activities and communications); compliance methods (audits, reviews and formal and police investigations); the severity of penalties; the independence of the administrative entity; and the extent of public reporting.

Australian Government policy reform and accountability between 2008 and 2020

1.15 The Code has undergone review and some change since its introduction in 2008.

• In 2009, the Senate Standing Committee on Finance and Public Administration recommended the Code be expanded to encompass some in-house lobbyists. This recommendation was not supported by the Australian Government because, ‘concerns about transparency do not arise in relation to in-house lobbyists and employees of peak industry bodies … as it is clear whose interests they represent …’²² However, in its response, the Government agreed to keep the operation of the Register under review and, if necessary, consider the need for changes to the Code and Register.²³
• In August 2011, the Special Minister of State announced two changes to the Register: the requirement that lobbyist organisations disclose if any former Government representatives were employed by their firm as lobbyists (clause 5.1iii) and measures to decrease the requirement for mandatory reporting from four times to twice per year (clauses 5.4 and 5.5).
• In November 2011, the Senate Finance and Public Administration References Committee conducted an inquiry into the operation of the Code and Register. A number of submissions recommending change were received. However, the conclusion of the inquiry was that the regime was working effectively and meeting its defined objectives; no changes to the Code were recommended by the inquiry or made by the Government.
• In 2013, amendments were made to the Code which prohibited certain political party office holders from remaining on the Register.

1.16 The Code has not been substantially altered since 2013.

1.17 PM&C was accountable for the Code between 2008 and 2018. A machinery of government (MoG) change in 2018 made AGD accountable, in addition to its ongoing responsibility for the Foreign Influence Transparency Scheme (FITS).²⁴ The date of effect of a MoG change will be either the date a change to the Administrative Arrangements Order (AAO) is issued, the date specified in a decision by the Prime Minister or Cabinet, or the date specified in legislation or a legislative instrument.²⁵ The amendment to the AAO which specified that AGD would deal with whole of government integrity policy and activities was issued on 11 May 2018.

Auditor-General Report No.27 of 2017–18

1.18 Auditor-General Report No.27 of 2017–18, Management of the Australian Government’s Register of Lobbyists, assessed the effectiveness of PM&C’s management of the Register. The audit, which was tabled in February 2018, had three criteria:

• Have sound administrative processes been established to update and maintain the Register?
• Has a fit-for-purpose risk-based approach to managing compliance been established?
• Are effective monitoring and reporting arrangements in place?

1.19 The audit’s findings are summarised in Appendix 4. The audit concluded:

While PM&C’s arrangements to manage the Australian Government’s Register of Lobbyists are consistent with the framework agreed by Government, improvements could be made to communications, compliance management and evaluation for the Code and Register. It would also be timely to review the appropriateness of the current arrangements and Code requirements in supporting the achievement of the objectives established for the Code.²⁶

1.20 The ANAO made one three-part recommendation:

The Department of the Prime Minister and Cabinet review the appropriateness of current arrangements and Code requirements in supporting the achievement of the objectives established for the Code. To better support the ongoing regulation of lobbyists, PM&C should:

(a) implement a strategy to raise lobbyists’ and Government representatives’ awareness of the Code and their responsibilities;

(b) assess risks to compliance with the Code and provide advice on the ongoing sufficiency of the current compliance management framework; and

(c) develop a set of performance measures and establish an evaluation framework to inform stakeholders about the extent to which outcomes and broader policy objectives are being achieved.

1.21 PM&C’s full response to the 2017–18 audit report is provided at Appendix 5. The department ‘agreed in part’ to the recommendation, noting that ‘some elements of the recommendation are better suited to a legislatively–based regime that regulates all lobbyists, i.e., not just those employed by third-parties’ and that it would ‘consider how best to implement the recommendation sub-points consistent with the spirit and intent of the policy objectives of the Register of Lobbyists as an administrative scheme.’

Rationale for undertaking the audit

1.22 This audit is a follow-up to the Auditor-General Report No.27 of 2017–18, Management of the Australian Government’s Register of Lobbyists. The appropriate and timely implementation of agreed recommendations is an important part of realising the full benefit of an audit. The audit responds to public and Parliamentary interest in lobbying activities being carried out with integrity and transparency.

Audit approach

Audit objective, criteria and scope

1.23 The audit examined the effectiveness of AGD’s implementation of the recommendation from Auditor-General Report No.27 of 2017–18, Management of the Australian Government’s Register of Lobbyists.

1.24 Noting PM&C’s partial agreement to the previous audit report’s recommendation (refer paragraph 1.21), this audit did not consider implementation activities which related better to a legislation based scheme.

1.25 To form a conclusion against the audit objective, the following high level audit criteria were adopted:

• Does AGD have effective governance arrangements to oversee the implementation of the recommendation from Auditor-General Report No.27 of 2017–18?
• Has a strategy been implemented to raise awareness of the Lobbying Code of Conduct among lobbyists and Government representatives?
• Has AGD assessed risk to Lobbying Code of Conduct compliance and provided advice to the Australian Government on the sufficiency of the current compliance management framework?
• Have performance measures and an evaluation framework for the Lobbying Code of Conduct and Register of Lobbyists been developed?

Audit methodology

1.26 The audit involved:

• a review of departmental documentation and communications materials relating to the Code;
• data extraction and analysis of the Register’s public and backend data;
• reviews of supporting systems for the Code, comprising the website, portal and customer relationship management system;
• interviews with relevant entity staff; and
• an interview with a professional body for lobbyists, the Australian Professional Government Relations Association.

1.27 The audit was conducted in accordance with the ANAO Auditing Standards at a cost to the ANAO of approximately $259,920.

1.28 The audit team was Christine Chalmers, Judy Jensen, Zoe Pilipczyk, Dr Cristiana Linthwaite-Gibbins, Ben Thomson, Stephenson Li and Paul Bryant.

2.1 In agreeing to a recommendation made by the ANAO or by the Parliament, an entity is undertaking to the Parliament to improve the relevant area of administration. Good governance arrangements to monitor and oversee the implementation of a recommendation increase the prospect of successful implementation. Effective governance arrangements include fit-for-purpose implementation plans that identify the intent of the recommendations and associated actions, responsibilities, timeframes, and measures of success; as well as clear responsibilities and reporting arrangements to provide the accountable authority with a clear line of sight of implementation.²⁷

2.2 This chapter examines whether:

• there was a fit-for-purpose implementation plan for the ANAO recommendation; and
• senior management and the ARMC had effective oversight of the implementation of the ANAO recommendation.

Is there a fit-for-purpose implementation plan?

2.3 PM&C agreed in part to the recommendation from Auditor-General Report No.27 of 2017–18, Management of the Australian Government’s Register of Lobbyists (refer paragraph 1.21).

2.4 A timeline for the implementation of the ANAO recommendation is shown at Appendix 6. This timeline highlights three distinct elements requiring implementation planning:

• the machinery of government (MoG) transfer of accountability for the Code from PM&C to AGD;
• the migration of the Register of Lobbyists (Register) IT system from PM&C to AGD; and
• the explicit consideration of the ANAO recommendation (refer paragraph 1.20).

Planning for machinery of government transfer of Code to AGD

2.5 The Prime Minister publicly announced the intention to consolidate government integrity and transparency responsibilities within AGD in July 2017. It was intended that transferring accountability for various integrity schemes would enhance the Attorney-General’s integrity role and allow the Attorney-General to focus on protecting the rule of law and ensuring integrity within the Commonwealth. It was also intended that harmonising the requirements of the Foreign Influence Transparency Scheme (FITS) and the Lobbying Code within one administrating entity would reduce regulatory burden and increase public transparency.

2.6 Discussions regarding the MoG change began between the two departments in 2017. The Prime Minister wrote to the Attorney-General on 6 May 2018 formally advising him of AGD’s new responsibilities in relation to integrity and transparency, and that AGD would now be accountable for the Code. The Administrative Arrangements Order was modified on 11 May 2018 to indicate that AGD now dealt with whole of government integrity policy and activities.

2.7 In its 2016 guidance to entities about machinery of government changes, the Australian Public Service Commission (APSC) advised that:

It is expected that Machinery of Government changes will be implemented as quickly as possible to support the Government’s priorities, with a focus on achieving the best outcomes for the Australian community across the whole of government.²⁸

2.8 The Prime Minister indicated in his 6 May 2018 correspondence that the respective departments should settle implementation arrangements to support the MoG change, including timing and resources.

2.9 Transfer of appropriation funding occurred in early October 2018. The Register remained on PM&C’s IT network until May 2019 (refer paragraph 2.16), at which time it was placed on the AGD IT network.

2.10 Entities were advised by the APSC that:

It is good practice to complete a thorough due diligence exercise within the first five to ten days to identify complex issues early. As soon as it is apparent that a MoG is complex, an independent facilitator should be appointed to lead a cross-agency committee.²⁹

2.11 The MoG was managed by a MoG Steering Committee that had been established by AGD in July 2017 to manage an earlier MoG process. AGD did not conduct a due diligence exercise within the first five to ten days for the elements of the MoG relating to the Code, develop an implementation plan with milestones or specify a completion date for administrative arrangements. PM&C and AGD have advised that they did not consider the MoG to be complex or contested.

Planning for Register system migration to AGD

2.12 The Register is the primary administrative mechanism for the Code. Deficiencies in the IT system for the Register and the focus on providing a basic functioning Register have been cited by AGD as the primary reason for failing to implement the ANAO recommendation.

2.13 In 2016 guidance to entities about MoG changes, the APSC and Department of Finance advised that ‘IT matters need to be addressed early in the MoG change process. This can involve significant time and resources to resolve and implement. Poor planning will increase risk and the cost of getting it wrong can be significant.’³⁰

2.14 Officers from AGD’s Information Division began communicating about the system transfer with their counterparts in PM&C in June 2018. An August 2018 ‘options paper’ prepared by AGD’s Chief Technology Office analysed potential approaches to the Register transfer (refer Table 2.1).

Table 2.1: Options for Register transfer

Source: ANAO analysis of Attorney-General’s Department, Lobbyist Relocation Options Paper, Chief Technology Office, 2018.

2.15 The options paper ruled out transferring PM&C’s existing operational IT system for technical reasons, and proposed three options: developing a bespoke solution; integrating the Lobbyist Register into the FITS Register; or a Minimum Viable Product (MVP), which involved reconfiguring the PM&C system, which was being redeveloped by PM&C, to function in the AGD environment. The MVP option was recommended on the basis that it was the least risky and costly. No formal cost estimates were produced. The MVP option was endorsed by AGD senior management in October 2018. The options paper noted that the system would not be supported in AGD’s environment without significant changes.

2.16 At the time of the MoG change, PM&C was in the process of redeveloping the IT system for the Register ‘to reorder the available functions to better respond to user expectations and administrator processes.’ This redevelopment work, which had been ongoing since January 2017, had an initial completion date of 30 November 2017, which was later extended to January 2019 (refer Appendix 6). The options paper specified that ‘All development work will be completed prior to handover to AGD and that the application has been certified as fit for purpose’, meaning the transfer could not occur immediately, as stated by PM&C in an email dated 20 June 2018, but would need to be delayed until testing was completed by PM&C. Discussions to prepare the AGD environment for the transfer commenced in December 2018 and a solution architecture was finalised by AGD in late March 2019. Throughout February to May 2019, information officers from both departments worked together to facilitate the transfer of the IT system, which occurred on 14 May 2019.

2.17 A number of technological issues were identified following the system migration. These included incorrect or incomplete data during transfer from PM&C to AGD; issues with functionality of the user portal; linking errors between the Register and the backend system; duplicate data; and issues with AGD’s ability to create and publish registrations. The Australian Professional Government Relations Association stated that most of the issues users encountered with the Register after May 2019 were new and did not occur when the Register was housed at PM&C.

2.18 Despite known risks associated with a redeveloped system that had never been used in production, and misalignment between that system and the platform in which it would be housed at AGD, the system was placed online without performing pre or post-deployment user testing, data migration validation or having a back-out strategy in place.

2.19 Following technological failures in the migrated Register, AGD deployed an ‘interim solution’ in November 2019, which involved de-activating automation.³¹ By December 2019, planning was focused on establishing a more robust long-term IT solution to support the Register, with the first stage to be delivered by 28 April 2020, at a budgeted cost of $590,000. The first stage was deployed on 27 May 2020. AGD stated that it will continue to update the system in stages, with the final product scheduled for delivery in June 2021, at an estimated total cost of $1.57 million.

Planning for implementation of the ANAO recommendation

2.20 The ANAO recommendation was first reported to the PM&C Audit and Risk Committee (ARC) in March 2018. Papers stated that PM&C would implement a strategy to raise awareness of the Code, following completion of an IT system redevelopment, and that it would develop a set of performance measures and establish an evaluation framework as part of the redeveloped system. The recommendation was added to the PM&C ARC database on 27 April 2018.

2.21 Updates provided to the PM&C ARC between June 2018 and June 2019 did not report any progress on implementation of the ANAO recommendation³², and it was closed and no longer included in the PM&C ARC recommendation register from June 2019.

2.22 The MoG change transferring accountability for the recommendation to AGD was effected on 11 May 2018 — the date the change to the Administrative Arrangements Order was issued (refer paragraph 1.17).

2.23 The extended period of one year involved in transferring the Register IT system from PM&C to AGD led to differing views about which department held accountability for the Code and the ANAO recommendation, during the period May 2018 to May 2019.

• On 22 October 2018, a PM&C officer responded to a question about the Code before the Senate Finance and Public Administration Legislation Committee by stating, ‘That would be a question now that should go to the Attorney-General’s Department as a policy issue.’³³
• On 23 October 2018, an AGD officer responded to a question about the Code before the Senate Legal and Constitutional Affairs Legislation Committee by stating ‘as we haven’t taken that function over yet, we’re just not aware of it. It’s PM&C at the moment. You go through them … It’s an operational question in relation to how the code and the register operate, and, at this point, we are not operationally responsible for the register.’³⁴
• When answering a question in the House of Representatives on 9 September 2019, the Attorney-General advised Parliament that ‘Responsibility for the Australian Government Lobbying Code of Conduct and the Register transferred from the Department of Prime Minister and Cabinet to the Attorney-General’s Department on 10 May 2019.’³⁵

2.24 AGD has stated that it was not responsible for implementing the ANAO recommendation until May 2019, after the Register was placed on the AGD IT network. AGD has advised the ANAO that, ‘While the department formally assumed policy and administrative responsibility for the Lobbying Code from March [sic] 2018, PM&C retained responsibility for its day-to-day operation — including communications and enforcement activities, performance measures and evaluation, and the implementation of the ANAO’s recommendation and implementation — until May 2019.’

2.25 An implementation plan for the ANAO recommendation was not developed by AGD after the MoG change in May 2018, or after the placement of the Register on AGD’s IT network in May 2019.

2.26 The ANAO recommendation was broadly considered when designing and building AGD’s proposed IT system for the Register. The proposal noted that ‘modifications to the system should be consistent with the Australian National Audit Office’s recommendations …’ However, no attempt to map IT functionality to the specific components of the ANAO recommendation was made.

Do senior management and the audit committee have oversight of implementation?

Responsibility for the Code

2.27 The management structure for the Code is governed by a delegation instrument and is the responsibility of the Director of the Institutional Integrity Branch (later the Transparency Frameworks Branch³⁶), which sits within the Integrity and Security Division and the Integrity and International Group.

2.28 In 2018–19, 3.7 full-time equivalent staff were initially assigned to the Branch, which is responsible for administering both FITS and the Code. This was subsequently increased to 8.2, of which four are assigned to the Code. AGD has advised this will be reduced to two after the new IT system was introduced in May 2020, with more staff deployed during mandatory update periods. The Branch is assisted by staff from the Information Division.

Management oversight

2.29 The Board is responsible for setting the vision and strategy for the department, overseeing risk and ensuring organisational performance. The Board actively considered the Code once in 2019, on 17 December. At this meeting, an update about the technological problems with the Register (refer paragraph 2.17) was provided by staff from the Transparency Frameworks Branch at the request of the Secretary. The Board did not discuss the ANAO recommendation — or its implementation — at this meeting, other than to note that a follow-up ANAO audit was imminent.

2.30 The SMC is the primary discussion forum on significant corporate and strategic whole of department issues; provides a mechanism for sharing information between the senior executive and staff; and provides advice as needed to the Board. The SMC discussed the Register seven times in 2019. Technological problems with the Register were first noted in August 2019. Discussion by the SMC focused on the Register and its technological development. AGD’s implementation of the ANAO recommendation and broader policy considerations associated with the Code, such as the sufficiency of the compliance management framework, were not discussed by the SMC.

2.31 A number of committees support the Board and SMC. The primary functions of the Strategic Operations Steering Committee (SOSC) are to support business improvement; monitor resource allocation and priority-setting across the department; and provide a link between the department’s enabling services and its policy, program and advising areas. The SOSC discussed migration of the Register three times in January to March 2019.

2.32 The risks of the Register migration from PM&C were not adequately advised to management to make informed decisions in the lead up to the migration in May 2019. In its August 2018 options paper (refer paragraph 2.15), the Chief Technology Office described the MVP option as having a ‘low level of risk exposure.’ In April 2019, despite significant delays in its implementation of the transfer, the ICT Committee informed the Board that the Register project was ‘appropriately resourced’, with ‘no major issues to report’, although ‘PM&C has indicated it wants to transfer the Lobbyist Register no later than 20 April, which would be before the completion of testing.’ In December 2019, the ICT Committee informed the Board that the MVP had been delivered and that work was underway to ‘address the highest priority issues and to develop a longer term solution for the system.’ The Board did not discuss the papers associated with the updates in the period April to December 2019.

Audit and Risk Management Committee oversight

2.33 The ANAO recommendation is monitored by AGD’s ARMC. For the purposes of reporting to the AGD ARMC, the audit sponsor is the Deputy Secretary, Integrity and International Group, and the responsible officer is the Assistant Secretary, Transparency Frameworks Branch.

2.34 PM&C’s ARC papers show that the ANAO recommendation implementation target date was originally set at 30 June 2018, and was later deferred to 31 December 2018 (refer Appendix 6). By March 2019, the recommendation was classed as overdue.

2.35 The ANAO recommendation was first listed in AGD’s ARMC meeting papers on 16 August 2019 — 15 months after accountability for the Code was transferred to AGD. AGD’s ARMC papers show the due date for addressing the recommendation to be 1 March 2020. As at 14 November 2019, this recommendation was described, and accepted, as being ‘On track (due to be completed by the due date)’ despite no evidence of progress or an implementation plan.

2.36 The Register IT system redevelopment, which AGD advises will address several aspects of the recommendation, was not due to be completed until 30 June 2020.

2.37 On 4 March 2020, the branch responsible for the Code requested an extension of the recommendation due date to 30 June 2021.

3.1 Auditor-General Report No.27 of 2017–18, Management of the Australian Government’s Register of Lobbyists recommended that the department ‘implement a strategy to raise lobbyists’ and Government representatives’ awareness of the Code and their responsibilities’ (refer paragraph 1.20).³⁷

3.2 This chapter examines whether the AGD has:

• implemented an appropriate communications strategy;
• effectively communicated regulatory requirements to lobbyists; and
• effectively communicated regulatory requirements to Government representatives.

Does AGD have an appropriate communications strategy to raise awareness of the Code?

3.3 A communications and engagement strategy for a regulatory regime helps to ensure that entities and individuals subject to regulation are aware of their obligations. There are communications and stakeholder engagement strategies for other AGD programs, new legislation, and responding to the recommendations of Royal Commissions. However, AGD does not have a communications or stakeholder engagement strategy for the Code.

Does AGD effectively communicate regulatory requirements to lobbyists?

3.4 The Code establishes that lobbyist organisations and lobbyists have a number of administrative responsibilities (refer Chapter 1, Box 1) and compliance obligations (refer Chapter 1, Box 2). Although it has no overarching strategy, AGD undertakes communications activities to raise awareness among lobbyists of these responsibilities and obligations.

Primary communications activities

Lobbying website

3.5 The primary communications vehicle used by AGD to raise awareness of the Code among lobbyists is the website https://lobbyists.ag.gov.au (lobbying website).

3.6 The lobbying website provides public access to the Register of Lobbyists (Register), information for lobbyists and links to the Code (with a page dedicated to information for lobbyists³⁸), and is the gateway for lobbyist registration and updates.

Email correspondence

3.7 Email is used to raise awareness among registered lobbyist organisations.³⁹

3.8 AGD has template emails to send to all registered lobbyist organisations outlining lobbyists’ administrative requirements for biannual mandatory reporting periods. AGD does not remind lobbyist organisations through emails of other administrative requirements, such as their responsibility to submit updated details within 10 business days of any change outside of the mandatory reporting periods.

3.9 AGD has a template email for registered lobbyist organisations requesting that they remind their employed lobbyists who are former Government representatives of relevant lobbying prohibitions. Between May 2019 and January 2020, AGD communicated with six lobbyist organisations employing former Government representatives, explaining that these lobbyists are restricted in some lobbying activities ‘as per Section 7 of the Lobbying Code of Conduct.’ This correspondence was not sent to all relevant lobbyist organisations (at 30 January 2020, there were a total of 29 lobbyist organisations employing former Government representatives who had ceased being a Government representative in the previous 12 months — refer paragraph 4.19).

3.10 Following on from technological issues with the Register in 2019 (refer paragraph 2.17), AGD sent two emails to registered lobbyist organisations acknowledging the issues and providing an overview of the process for resolution.

Information communicated through primary communications activities

3.11 Table 3.1 and Table 3.2 show the messages communicated to lobbyists about their administrative responsibilities (refer Chapter 1, Box 1), and compliance obligations, via the two primary communications activities: website and correspondence. Administrative and compliance requirements are communicated through the lobbying website. Messages about administrative and compliance obligations through correspondence are limited.

Table 3.1: Communications in relation to lobbyist administrative requirements

Source: ANAO analysis.

Table 3.2: Communications in relation to lobbyist compliance obligations

Note a: As at 31 January 2020, refer paragraph 4.19.

Source: ANAO analysis.

Other communications activities

Public information

3.12 Communications to the broader community of lobbyists, including eligible lobbyists who may have failed to register, are limited to the lobbying website. Advertising and social media campaigns have not been used.

3.13 AGD has provided limited information about the Code through its corporate reporting. The Code was mentioned once in the 2018–19 Annual Report — to state that AGD had ‘assumed responsibility’ for the Code and Register. There are no references to the Code in AGD’s 2018–22 or 2019–23 Corporate Plan.

Stakeholder direct engagement

3.14 AGD has engaged with the Australian Professional Government Relations Association (APGRA) — a lobbyist professional body. In May 2019, AGD met with APGRA about the Code. AGD and APGRA met again in late 2019 after several communications from APGRA expressing concern about technological issues with the Register, and then again in February 2020.

3.15 AGD has not consulted with other professional bodies or organised engagement events targeting lobbyists.

Does AGD effectively communicate regulatory requirements to Government representatives?

3.16 The Code establishes that Government representatives shall not meet with unregistered lobbyists and will report Code breaches to the Secretary of AGD (refer Chapter 1, Box 3).

3.17 There is a dedicated page on the lobbying website to provide information for Government representatives.⁴⁰ The page defines a Government representative, provides links to the Code and Register, and reinforces Government representatives’ compliance obligations to meet only with registered lobbyists and to report Code breaches. The page also includes a checklist of what to do if contacted by a lobbyist — reproduced in Figure 3.1.

Figure 3.1: Information for Government representatives — Checklist

Source: Attorney-General’s Department, Information for Australian Government Representatives [Internet], AGD, available from https://www.ag.gov.au/integrity/australian-government-register-lobbyists/information-australian-government-representatives [accessed 17 March 2020].

3.18 The checklist does not remind Government representatives to check if the lobbyist is a former Government representative who may be within their prohibition period, although cessation dates are on the public Register.

3.19 AGD has not provided any information about the Code to Parliamentarians or other Government representatives, although a letter directed to Ministers and Assistant Ministers has been drafted. AGD has not provided any information about the Code to other government entities that might serve as a conduit for disseminating information to Government representatives. This includes employer departments and agencies, as well as agencies that have a role in providing whole of government public sector guidance. The Australian Public Service Commission⁴¹ and Parliament of Australia websites⁴² have outdated references to the Code and Register, although the Department of Finance reference⁴³ is up to date. AGD’s own internal reference in its Guidelines for Managing Conflicts of Interest, which is provided to all AGD staff on its intranet, also has outdated references and directs employees to a Department of the Prime Minister and Cabinet website.

4.1 Auditor-General Report No.27 of 2017–18, Management of the Australian Government’s Register of Lobbyists recommended that the department ‘assess risks to compliance with the Lobbying Code of Conduct’ and ‘provide advice on the ongoing sufficiency of the current compliance management framework’ (refer paragraph 1.20).⁴⁴

4.2 This chapter examines the activities undertaken by AGD to assess compliance risk and manage the administrative responsibilities and compliance obligations of regulated entities; and the arrangements established to advise the Australian Government about the sufficiency of the current regime and the way it is administered.

Have risks to compliance with the Code been assessed and mitigation strategies developed?

Regulatory risk assessment and risk-based compliance strategies

4.3 The Australian Government uses regulatory instruments, ranging from legislation to principles-based instruments such as codes of conduct, to influence the way individuals and entities behave (refer paragraph 1.11). Regulators should provide assurance to the Australian Government that mandated requirements under the regulatory regime are being met through these instruments and that regulatory objectives are being achieved. Poorly administered and ineffective regulation imposes unnecessary costs on regulated entities and the taxpayer.

4.4 Figure 4.1 summarises the Code’s requirements (refer paragraphs 1.6 through 1.8).

4.5 Regulatory risk is an actual or potential event or circumstance that interferes with the achievement of a regulatory objective. Regulatory risk can be categorised into two broad types — administrative risk and compliance risk.

• Administrative risk — risks that affect the responsible regulatory entity’s ability to administer the regulatory regime. In the context of the Code, AGD’s ability to administer requirements is principally related to the supply and management of information. The Code’s primary administrative mechanism is the Register of Lobbyists (Register)⁴⁵, which relies on administrative inputs from lobbyists and on AGD’s processing of these inputs (refer Figure 4.1). Administrative risks may be factors that cause lobbyists or lobbyist organisations to fail to meet their administrative responsibilities and provide the necessary information inputs, as well as factors that impede AGD’s ability to effectively process this information.
• Compliance risk — risks that affect regulated entities’ and individuals’ ability or willingness to comply with the regulatory regime. The Code places a number of compliance obligations on lobbyists, lobbyist organisations and Government representatives (refer Figure 4.1). Examples of compliance risks could be lack of knowledge and information about compliance obligations among lobbyists and Government representatives; technological failures in the Register impeding Government representatives’ ability to check it; Government representatives’ lack of resources to identify, assess and report breaches; or lack of sufficient incentive to comply given weak or non-existent penalties.

4.6 AGD’s 2019–23 Corporate Plan states that ‘all staff have a responsibility to identify and engage with risk in order to ensure our policies, programs and services are robust and innovative.’⁴⁶ AGD’s guidance to staff in implementing the Commonwealth Risk Management Policy states that a risk assessment should be conducted when developing a new policy, implementing a new program, establishing a new process, considering a new proposal or reviewing existing work practices.

4.7 A risk-based compliance strategy should define the types of activities to be undertaken to confirm or assure compliance, who will undertake these activities, how frequently they will be conducted and how they will be reported. A risk-based compliance strategy helps regulators develop proportionate and appropriate mitigation strategies. If the risk of non-compliance declines, a reduction in the nature and extent of compliance activities may be appropriate. The key components of a risk-based compliance monitoring strategy are shown in Figure 4.2.

Figure 4.2: Risk-based compliance monitoring strategy

Source: ANAO.

Administrative responsibilities and risks

4.8 Figure 4.1 outlines the administrative requirements under the Code for lobbyists.

4.9 The Transparency Frameworks Branch did not conduct a risk assessment for the Code prior to assuming administrative responsibility.

4.10 Following the migration of the Register from the Department of the Prime Minister and Cabinet (PM&C) to AGD in May 2019, technological issues were identified in relation to system deployment (refer paragraph 2.17). Many of these issues became apparent during the June 2019 mandatory reporting period. The issues led to delays in the processing of mandatory update information, with the recording of 30 June mandatory update information not completed until 28 November 2019.

4.11 The primary consequence of administrative risks being realised is an inaccurate Register, impeding public transparency of lobbying activities. This consequence was evident in September 2019, when the Attorney-General reported to Parliament that ‘as of 8 August 2019, there are 266 entities and 836 individual lobbyists registered …’⁴⁷ ANAO analysis of the Register’s data in both 2017 and 2020 has determined that the total number of individual lobbyists registered was fewer than 600 at both points in time. AGD advised that the overstatement of registered lobbyists in August 2019 was due to technological issues with the Register system at that time which resulted in duplicate records and that, although PM&C had notified AGD of the problem of duplicate records on 7 August 2019, AGD were ‘unaware of the impact for resulting statistics.’

4.12 Following these failures, in September 2019, the branch responsible for the Code completed a risk assessment that identified one administrative risk — failure of the IT system for the Register leading to data inaccuracies. This risk had a ‘Major’ consequence, ‘Possible’ likelihood and ‘High’ risk level, which is higher than AGD’s risk tolerance of ‘low’ to ‘medium’ as expressed in its enterprise-level strategic risk register. An ‘interim’ IT solution involving de-activation of the previous system and a longer term ‘major transformation’ of the IT system for the Register were listed as new controls that would lower the risk level to ‘medium.’

4.13 In practice, AGD undertakes some activities aimed at monitoring and managing the risk that administrative requirements associated with the Code are not being satisfied.

• Regular email communications with registered lobbyist organisations (refer paragraph 3.8) remind lobbyists of their administrative responsibilities during mandatory update periods. If lobbyist organisations or lobbyists fail to provide the necessary administrative inputs, they are deregistered. In the January 2020 mandatory reporting period, eight lobbyist organisations were removed from the Register due to non-compliance.
• During the mandatory reporting periods, AGD uses a compliance dashboard to monitor whether lobbyist organisations have confirmed that their details are up to date. This dashboard informs a schedule of reminder and non-compliance emails, which are sent to lobbyist organisations throughout the mandatory reporting period.
• In February 2020, AGD prepared a set of draft standard operating procedures (SOPs) for officers which provide guidance in processing registrations and resolving IT difficulties with the Register. This requires that all registrations and updates be checked by a Director in a two-step approval process.
• In an email to registered lobbyists sent in November 2019, AGD committed to a three to five-business day service standard for actioning changes to the Register as a means of ensuring that the Register is kept up to date. AGD advised the ANAO that officers are instructed to prioritise older requests to help ensure this standard is met although this is not referenced in the relevant draft SOP. The specifications of the new IT system (refer paragraph 2.19) include reminders to officers.

4.14 There is no risk-based compliance strategy to manage administrative risks. Without a strategy, it is unclear what controls for other administrative risks are required.

• Outside of the mandatory reporting period, there is a risk that lobbyist organisations will not update AGD with changes within 10 days. AGD advised that, in the 31 January 2020 mandatory reporting period, 122 out of 259 lobbyist organisations that responded, submitted at least one change. AGD has not verified that these changes occurred within 10 days of the mandatory report through checks against business databases, surveys or other methods.⁴⁸
• There is a risk that former Government representatives will not correctly declare themselves as such on the Register, leading to a lack of disclosure of conflicts of interest. Lack of declaration has occurred on a least one occasion since May 2019. AGD responded to this issue by sending a warning letter to the lobbyist three months after registration. However, the identification of this breach of the Code was due to the high profile of the lobbyist. There are no processes in place to guard against this risk when the lobbyists’ previous official dealings are unknown to AGD staff.
• There is a risk that former Government representatives will declare an inaccurate cessation date from their previous roles and lobby within the prohibition period. There are 227 former Government representatives on the Register (refer Table 1.1). Although AGD could check publicly available information regarding cessation dates for all, or a sample of, former Government representatives, it does not do this.
• There is a risk that lobbyist organisations will fail to list all clients, leading to lack of disclosure of relevant interests when lobbying. AGD has no controls in place to mitigate against this risk and this would be difficult for AGD to verify under the current regulatory regime.

Compliance obligations and risks

4.15 Figure 4.1 outlines the compliance requirements under the Code for lobbyists and Government representatives. AGD’s Audit and Risk Management Committee (ARMC) reporting on 16 August 2019 shows that AGD was relying on PM&C’s redevelopment of the IT system for the Register in order to implement the ANAO recommendation to assess risks to compliance with the Code.

4.16 AGD has not conducted a compliance risk assessment for the Code. AGD’s enterprise–wide strategic risk register does not mention the Code, and a decision was made by the Security and Risk Management Committee (SRMC) in February 2020 to exclude from this register risks related to specific programs such as the Foreign Influence Transparency Scheme (FITS) and the Lobbying Code.

4.17 In the absence of a risk assessment, it is unclear what risks to compliance with the Code and the achievement of objectives exist; what AGD’s risk tolerance level is; which risks exceed this tolerance level and require mitigation; how any controls should be prioritised in a compliance monitoring strategy; and whether its actions in controlling risk are effective. Noting this, in February 2020, the SRMC agreed that ‘programs with elevated risks should have their own operational risk register’ and that the Governance Office within AGD would consult with relevant line areas about this.

4.18 There are a number of risks to compliance that are inherent within the Australian regime that may impede achievement of its intended outcomes of Government representatives making informed judgements about lobbyist interests; transparent contact between lobbyists and Government representatives; and public trust in the integrity of government processes (refer paragraph 1.4). Regulatory regimes in other jurisdictions (refer paragraph 1.13 and Appendix 3) give administering agencies stronger powers to monitor and manage compliance or have greater transparency requirements.

• AGD has no method to determine if lobbyists are observing ‘principles of engagement’⁴⁹, including being transparent about whose interests they are representing when meeting with a Government representative. In some jurisdictions, registers must include details about the specific topic of all meetings (refer Table 1.2 and Appendix 3).
• Although AGD has stated that it will inquire into breaches that are reported to it by Government representatives or others (refer paragraph 4.20), AGD has no power to ensure, or means to verify, that Government representatives are reporting known breaches of the Code. Auditor-General Report No.27 of 2017–18 identified 11 alleged breaches between 2013 and February 2018. PM&C has advised that two potential breaches of the Code were brought to their attention between February 2018 and May 2019, each alleging that lobbyists were undertaking lobbying activities on behalf of clients who were not listed in the Register. Between May 2019 and February 2020, one alleged breach was reported to AGD by a member of the public. In the last three instances, the allegations were examined by the respective departments, who judged that there was no evidence to indicate non-compliance and that no further action was required.
• AGD has no means to verify that Government representatives are checking the Register and meeting only with registered lobbyists and with former Government representatives only outside the prohibition period. In some regulatory regimes (refer Table 1.2 and Appendix 3), ministerial diaries are published.

4.19 Moreover, measures that can potentially be utilised by AGD under the current Australian regime are not always utilised.

• Emails are sometimes sent to lobbyist organisations employing former Government representatives to remind them about prohibitions (refer paragraph 3.9). As at 31 January 2020, 29 former Government representative lobbyists⁵⁰ had ceased employment as a Government representative within the previous 12 months and were therefore prohibited from lobbying on certain topics. In the period between May 2019 and January 2020, AGD notified six of these lobbyists (via their employer) about prohibitions. In three instances, this was more than 48 days after the relevant record had been created in the Register. The ‘interim’ IT system for the Register (refer paragraph 2.19) alerts staff when a cessation date for a former Government representative falls within the prohibition period, but the control mechanism of sending an email to the Government representative has not been included in the recently developed SOPs. AGD has advised that new IT solution deployed on 27 May 2020 includes an automated email function.
• The AGD ARMC was advised on 14 November 2019 that AGD would work with the Department of Finance to engage with recently departed Members of Parliament (Staff) Act 1984 employees to ensure they are aware of the prohibitions applying to them under the Code. AGD has not contacted the Department of Finance about this.
• Statutory declarations are used to determine if lobbyists have been imprisoned; convicted of dishonesty, theft or fraud; or are political party executives. AGD has considered but rejected police checks of statutory declarations as a way of controlling the risk of fraudulent declarations and does not check their veracity in any other way.⁵¹

4.20 AGD has advised the ANAO that ‘the Code does not give the department any investigative powers.’ However, AGD has stated that:

‘… how the department handles alleged breaches that are reported to us will, necessarily, depend on the facts and circumstances of each case. However, in broad terms, we would:

• undertake an initial assessment of the information that is referred to us
• make further enquiries of the referent and other relevant individuals organisations and/or government entities where necessary and appropriate
• seek out relevant publicly information where necessary and appropriate, and
• consider the matter based on all relevant and available information, and provide advice to the Secretary or take such other action (for example, writing to the subject of the referral to request that they take remedial action, or seeking further assurance through a statutory declaration) as may be appropriate in the circumstances.’

Has AGD appropriately advised the Australian Government on the sufficiency of the current compliance management framework?

4.21 In its 2018–22 Corporate Plan, AGD noted a trend in declining public confidence in government and that ‘Providing advice to government on key integrity frameworks is a particular focus of the Integrity and Security Division.’⁵² Members of the Finance and Public Administration Legislation Committee expressed the view in February 2018 that PM&C, which was responsible for the Code at the time, had a role to play in advising the Government on the sufficiency of the current policy in relation to lobbyists, and questioned why this was not occurring.

4.22 Reporting to the AGD ARMC on 16 August 2019 stated that, ‘AGD will also consider whether additional measures are required to support greater compliance with the Code by lobbyists, increased assurance over information quality and enhanced monitoring of current arrangements. It is likely that this work will take a minimum of six months.’ There is no evidence that AGD has progressed its consideration of these measures in the period since. AGD testimony before the Senate Legal and Constitutional Affairs Legislation Committee on 22 October 2019 also demonstrated that AGD made no progress.

4.23 On 6 May 2018, the Prime Minister wrote to the Attorney-General, requesting advice to be provided by late July 2018, ‘following your review of arrangements in relation to the Lobbying Code, as recommended by the ANAO, including whether the Lobbying Code should be placed on a statutory footing in a manner consistent with the FITS Bill.’ AGD advised in June 2020 that, ‘The Attorney-General wrote to the Prime Minister on 12 September 2018 responding to the initial request, and confirming it was withdrawn by agreement.’⁵³

4.24 Following media reports about technological failures in the Register since its transition to AGD and questions posed in Parliament on 22 October 2019, a senior advisor within the Attorney-General’s Office (AGO) asked AGD to provide advice on the issue of in-house lobbyists and any other issues about the Code and Register that ‘warrant consideration.’ In its informal response, on 4 November 2019, AGD noted that it had limited capacity to provide policy advice ‘at this time due to our focus on the technological issues facing the existing register system.’ However, several policy options were provided in an informal response, under the categories of ‘short-term, quick win’, ‘longer term, moderate enhancements’ and ‘longer term, significant enhancements.’ Options included legislating the Code; establishing an oversight body; expansions to the scope (for example, information that is required to be reported or to include in-house lobbyists); expanding prohibitions for former Government representatives and on certain lobbying tactics; extension of compliance requirements and penalties for non-compliance; enhancements to administration (for example, greater automation); and improvements in cross-agency collaboration. AGD advised that the exclusion of in-house lobbyists is aligned with other Australian transparency frameworks, including FITS.

4.25 October 2019 planning documents indicate that AGD intended to develop a formal policy paper for the AGO by July 2020, but AGD has advised ANAO that this is unlikely to be progressed until the new Register IT system (refer paragraph 2.19) is in place.

5.1 Auditor-General Report No.27 of 2017–18, Management of the Australian Government’s Register of Lobbyists, recommended that the department ‘develop a set of performance measures and establish an evaluation framework to inform stakeholders about the extent to which outcomes and broader policy objectives are being achieved’ (refer paragraph 1.20).⁵⁴

5.2 This chapter examines whether AGD:

• has developed an appropriate framework for performance measurement and evaluation;
• monitors and uses performance information for continuous improvement; and
• has appropriate arrangements for reporting its performance in administering the Code and the achievement of objectives established for the Code.

Has AGD developed an appropriate framework for performance measurement and evaluation?

Establishing an evaluation framework

5.3 An integral part of the regulatory process is assessing the effectiveness of the regulatory arrangement in achieving policy objectives. Such assessments help identify any improvements required to the policy framework, as well as to the administrative performance of the regulator. Regulators are advised that implementation plans should reflect ‘the importance of evaluation: not just to assess how well you implemented the policy, but whether the policy remains relevant and needed.’⁵⁵

5.4 A good quality evaluation framework will include the specification of policy objectives and outcomes; evaluation questions that cover the domains of appropriateness, effectiveness, efficiency, impact and/or sustainability; robust performance metrics; identification of baseline data; data collection processes; timeframes, budgets and responsibilities; and a reporting and dissemination strategy. It should also consider the input of stakeholders.

5.5 AGD has advised that an evaluation framework will not be developed before the new IT system (refer paragraph 2.19) for the Register of Lobbyists (Register) is in place.

5.6 Regulation Impact Statements (RIS) are required for all Commonwealth regulatory regimes and these include an evaluation plan or framework. AGD has not referred to a RIS in administering the lobbying regime.

Defining outcomes and objectives

5.7 Department of Finance guidelines on developing performance information emphasise the importance of establishing the objectives and desired outcomes of a given policy and that ‘senior managers play a critical role in ensuring that this understanding exists (and is reinforced) at all levels in an entity.’⁵⁶

• The Code clearly defines the objective of the regime to be to promote trust in the integrity of government processes through ensuring contact between lobbyists and Government representatives is conducted in accordance with public expectations of transparency, integrity and honesty (refer paragraph 1.3).
• There are three intended outcomes of the regulatory regime: Government representatives make informed judgements about lobbyist interests; there is transparent contact between lobbyists and Government representatives; and there is public trust in the integrity of government processes (refer paragraph 1.4).
• There are three primary outputs of the regime: a public Register; lobbyist organisation and lobbyist compliance with various provisions of the Code; and Government representative compliance with the Code (refer paragraph 1.7).

5.8 AGD activity since becoming accountable for the Code in 2018 has been focused on establishing a reliable Register. Although the Register is the primary administrative mechanism by which the Code’s purpose is meant to be achieved, an exclusive focus on one output runs the risk of administrators failing to consider the Code’s broader intended outcomes and objectives and critically evaluate current structures and processes against the regulatory objective.

5.9 The Department of Prime Minister and Cabinet (PM&C) advises ‘An effective approach identifies all the main components of an initiative and plans out all the activities as a cause-and-effect chain.’⁵⁷ Such a cause-and-effect chain, otherwise known as a logic model, ‘can help determine what performance information is needed to tell an effective performance story because it can help identify the sequence of causes and effects that explain how a purpose is intended to be fulfilled.’⁵⁸ AGD has not developed a logic model for the lobbyist regime.

Developing performance measures

5.10 In its response to Auditor-General Report No.27 of 2017–18, PM&C stated:

Prior to the audit, PM&C had allocated funds to modernise the IT system which underpins the Register … implementing other improvements consistent with the audit’s findings and recommendation … PM&C will also develop a set of performance measures and establish an evaluation framework as part of the redeveloped system.⁵⁹

On 16 August 2019, AGD officers reported to the AGD Audit and Risk Management Committee (ARMC; refer paragraphs 2.33 to 2.35) that:

PM&C, in its response to the ANAO audit, indicated that the design of the new application would involve developing ‘a set of performance measures and establish[ing] an evaluation framework’. AGD is still exploring the extent to which this aim has been addressed through the new application or if further work is required.

In an internal policy paper written in late 2019, AGD officers stated that:

It is not clear whether a set of performance measures and evaluation has been designed … the lobbyist register would benefit from oversight and evaluation measures.

5.11 Reports to an ARMC meeting on 14 November 2019 stated that a new long-term IT solution currently in development for the Register would incorporate and provide the necessary compliance and performance information. The ARMC was told by the branch responsible for the Code that a contractor had been engaged to help inform the department about the sufficiency of current compliance processes and to develop performance measures. This contractor was engaged in October 2019 to provide ‘business process development and mapping services’ to AGD in relation to both the Code and the Foreign Influence Transparency Scheme (FITS). However, no deliverables regarding performance monitoring, measurement or evaluation were sought in the scope of work from this contractor and none have been provided. The contractor provided draft standard operating procedures for the Register.

5.12 AGD divisional and branch business and work plans do not include performance measures for the Code.

5.13 Well-defined performance indicators and targets enable a regulator to measure, monitor and report regulatory performance. An evaluation framework setting out a strategy for performance measurement — including outcome, output and process performance measures, and the means by which this performance information would be collected — should have informed and guided the proposed rebuild of the IT system for the Register. Although an internal policy paper written in late 2019 stated that the department should ‘ensure [performance measures and an evaluation framework] is included in the IT build Phase 2‘⁶⁰, there was no detailed consideration of how the proposed IT system could reliably collect performance information, what performance information should be collected and how this information would support evaluation of the Code’s administration and achievement of the policy objective. There was no overarching evaluation strategy to guide the development of the system.

5.14 Papers for an ARMC meeting in April 2020 did not include reporting on the implementation of recommendations, including the ANAO recommendation to develop a set of performance measures and establish an evaluation framework to inform stakeholders about the extent to which outcomes and broader policy objectives are being achieved.

Does AGD monitor and use performance information for continuous improvement?

5.15 Performance information ‘allows managers of activities to understand whether the tasks they have been allocated are providing the results expected by senior managers, and if not, why not. Performance information used for this purpose supports continuous improvement.’⁶¹

5.16 AGD has not developed a monitoring program for the Code and has not established management performance measures.

5.17 AGD has not assessed information gaps or evaluated the effectiveness of its communications activities aimed at lobbyists or Government representatives. Other than one lobbyist taking part in user tests of its ‘interim solution’ to the Register (refer paragraph 2.19), it has conducted no stakeholder research to determine current awareness levels and information needs, has no baseline data to benchmark the effectiveness of future communications, and has not assessed the effectiveness of its communications (for example, by comparing the number of lobbyist organisations and lobbyists who are registered) against other jurisdictions.

5.18 Where websites are used to communicate, the analysis of website usage data can provide useful feedback. AGD has not analysed usage data for the lobbying website, https://lobbyists.ag.gov.au. AGD does not assess if the lobbying website is an effective mechanism for raising awareness of the requirement to register or other compliance obligations under the Code.

5.19 In an email to registered lobbyists sent in November 2019, AGD established a service standard of implementing lobbyist change of details submissions within three business days of receiving completed forms (five business days during mandatory update periods). There is no established performance metric that measures collective performance against the standard over time. AGD has advised that the proposed IT system will have an ‘enhanced and comprehensive statistics function’ that will include ‘the ability to track and monitor … whether we action requests within 3 business days.’

5.20 AGD bases some of its department-wide performance results on a stakeholder satisfaction survey of close to 500 respondents from Commonwealth, state and territory governments, courts, tribunals, legal assistance services, industry, academia and non-government organisations.⁶² In the May 2019 survey there were no questions related to the Code, although AGD has advised that it will include Code-related questions and sample relevant stakeholders in future surveys.

Have appropriate reporting arrangements been established?

5.21 AGD’s stated purpose is ‘To achieve a just and secure society through the maintenance and improvement of Australia’s law, justice, security and integrity frameworks.’⁶³ Its second⁶⁴ of five⁶⁵ strategic priorities is, in part, ‘to promote public sector integrity.’⁶⁶ This ‘strong oversight and accountability gives the Australian population confidence in the legitimacy of its public institutions and promotes trust in government decision-making.’⁶⁷

5.22 There is no performance information provided to the Parliament, the public or other external stakeholders about AGD’s work undertaken in relation to the Code.⁶⁸ The Code was mentioned once in the 2018–19 Annual Report — to acknowledge that AGD had ‘assumed responsibility for the Lobbying Code of Conduct and Register of Lobbyists’. There are no references to the Code in AGD’s 2018–22 or 2019–23 Corporate Plan.

5.23 Portfolio Budget Statement performance measures are established for each of AGD’s strategic criteria. In relation to strategic priority two, ‘integrity’, there were four key performance indicators (KPIs), including two that assess ‘community impact’: Australia’s score on a Corruption Perceptions Index and public understanding of the Protective Security Policy Framework (PSPF). A Corruption Perceptions Index KPI could be considered to be measuring AGD’s outcome performance in managing lobbyist regulation, as this work sits within a suite of integrity and transparency activities that would share this intended outcome. There is no specific measure of AGD’s performance in achieving the objectives of the Code, in contrast to the PSPF and FITS.

5.24 The Organisation for Economic Co-operation and Development (OECD) notes worldwide public concern about the detrimental effects of some lobbying practices on policy making. To assist governments, it has developed 10 ‘Principles for Transparency and Integrity in Lobbying’ (refer Box 4).

Source: Organisation for Economic Co-operation and Development, Transparency and Integrity in Lobbying [Internet], OECD, 2013, available from https://www.oecd.org/gov/ethics/Lobbying-Brochure.pdf [accessed 2 March 2020].

5.25 Internal AGD analysis found that the Code and its administration fully meets one⁶⁹ of the 10 OECD principles, partly meets five⁷⁰, and ‘fails to meet’ the remaining four principles.⁷¹ This analysis has not been communicated to government.

5.26 Lack of performance information means that the Australian Government is unable to make an informed judgement about whether AGD has effectively and efficiently administered the current regulatory regime for lobbying. Moreover, the lack of evaluation impedes government’s ability to determine whether the regulatory regime as currently designed is inherently capable of achieving the regime’s stated objectives (refer paragraph 1.3 and Appendix 2).

Appendix 1 Entity responses

 

 

Appendix 2 Inputs, outputs and outcomes of the Australian Government lobbyist regulatory regime

Appendix 3 Other jurisdictions’ lobbyist regulatory regimes

Appendix 4 Summary of findings from Auditor-General Report No.27 of 2017–18

Appendix 5 Department of the Prime Minister and Cabinet’s response to Auditor-General Report No.27 2017–18

 

 

Appendix 6 Implementation of the ANAO recommendation timeline

Source: ANAO analysis.