Paladin’s $423 million contract for Manus Island security under scrutiny

Peter Dutton’s department has been grilled about a contract worth hundreds of millions of dollars awarded to a mysterious company called Paladin.

Officials from the Department of Home Affairs have been grilled about the controversial $423 million contract awarded to a company called Paladin to provide security, among other things, on Manus Island.

Speaking at a Senate Estimates hearing, Home Affairs Secretary Michael Pezzullo denied the government had paid $10 million to Paladin upfront.

The officials implicitly blamed Papua New Guinea for the situation.

The contract of the company which previously handled security and other services on Manus Island was due to run out on October 31, 2016. PNG initially committed to run the tender process to find a replacement, but then advised Australia it could not proceed because its government was in caretaker mode.

“The department was required to step in and assist PNG with the provision of services,” Mr Pezzullo said.

“PNG changed its mind from saying initially we’ll take care of the centre, we’ll deliver the services, we’ll run the tender.

“We’re not going to let people starve, we’re not going to let people go without food or water.”

Another Home Affairs official, Cheryl-Anne Moy, gave the hearing more detail, saying there was “very little time” for an open tender process and in any case, the department was uncertain how many companies would apply.

“We did not have time for an open tender,” Ms Moy said.

“We weren’t even sure anyone would be in the market to provide the services.

“We talked to the Department of Finance, we talked to the government solicitor, we talked to our external probity adviser and looked at what options we had.

“They provided advice that we could approach an organisation that would be able to deliver the services.”

This led to the department invoking a particular regulation which allowed it to approach a provider — in this case, Paladin — directly.

The officials clarified that their contract was with the Singapore-based company Paladin, not the subsidiary registered to a beach shack at the end of a dirt road on Kangaroo Island.

Labor has hammered the government over the contract in recent days.

“It’s deeply concerning that we’ve had $423 million of your money going to a company which has got such a poor track record,” Senator Penny Wong said yesterday.

“I love Kangaroo Island, but it doesn’t fill you with confidence in terms of their capacity.

“What fills you with even less confidence is their track record and the fact we’ve got one of their directors, at least, under a cloud.”

“I think the very biggest question to be answered is how on earth this tiny, unknown company with no track record ever gets $423 million in contracts from the Australian taxpayer,” Senator Murray Watt told ABC radio this morning.

“I think it is extraordinary that this amount of money is being spent with virtually no accountability or transparency,” independent MP Kerryn Phelps said.

“It is just not good enough for the government to say we are not answering questions on this.”

Attorney-General Christian Porter has defended the contract, saying it was decided by a full and independent process.

“This was the subject of a full independent Commonwealth procurement process and I’m sure that the claims will be investigated,” Mr Porter told the ABC’s Insiders program.

“Standard procurement processes are often at arms-length from the minister.

“The reality is that doing these types of things offshore in Papua New Guinea and in Nauru is a very costly exercise.”

Home Affairs Minister Peter Dutton has said he had no line-of-sight over the tender process.

Home Affairs Minister Peter Dutton. Picture: Getty Images

The Financial Review has cited a person “with knowledge of the tender process” saying “there was pressure put on the department by the PNG government to ensure Paladin was appointed”.

Mr Dutton has refused to released details of the contract with Paladin, saying it would damage Australia’s relationship with PNG.

His Home Affairs department is also facing scrutiny over its role in the months-long detention of refugee footballer Hakeem Al-Araibi, who was finally released by Thailand last week.

Mr Al-Araibi was detained when he arrived in the country for his honeymoon, after his native country Bahrain got Interpol to issue a red notice — an international arrest warrant which is not supposed to be used for refugees.

Today the Australian Federal Police finally addressed its role in tipping off Thai authorities.

Commissioner Andrew Colvin told Estimates the AFP had delayed publicly responding to the case until after Mr Al-Araibi had been released.

“There is criticism from some quarters about the length of time it took for the AFP and for me to make a public statement on this matter. This was a decision made in what we thought were the best interests of Mr Al-Araibi,” he said.

“While it did not sit well with my members to be the subject of wrongful speculation about the AFP’s involvement in this matter, the priority was to ensure a safe return to Australia for Mr Al-Araibi.”

The 25-year-old arrived back in Australia to a warm welcome last week, and met with the Prime Minister in Canberra.

Mr Colvin blamed the Department of Home Affairs for the screw-up that led to Mr Al-Araibi being detained, saying the department had not advised the AFP of Mr Al-Araibi’s visa status until after his arrest.

“On 8 November 2018, at the request of Bahrain, Interpol issued a red notice for Mr Al-Araibi, which the AFP conveyed to the Australian Border Force on 9 November. This is a routine process, as many names come on and off Interpol watchlists regularly,” Mr Colvin said.
“At this time, neither the AFP nor the Australian Interpol NCB was aware of Mr Al-Araibi’s visa status. This was not known until after his detention in Thailand.

“Neither the AFP nor the Australian Interpol NCB can access visa information. We rely on notifications from the Home Affairs department. The Home Affairs department provided Mr Al-Araibi’s visa status to the AFP on 28 November, the day after his detention in Thailand.”

— with AAP

Originally published as Paladin’s $423 million contract for Manus Island security under scrutiny