One of the big four consultancy firms will receive almost $8.5 million in taxpayers’ money over the next year to help design a new agency to monitor safety issues associated with Australia’s acquisition of nuclear-powered submarines under the AUKUS pact.
The Defence Department contract with EY, also known as Ernst & Young, comes amid a growing debate about the federal public service’s reliance on advice from external consultants for tasks that would previously have been performed in-house.
The federal government is establishing a new regulator to oversee safety issues relating to the acquisition of nuclear-powered submarines. Credit: US Navy
The Albanese government announced in March that it would create a new agency, known as the Australian Nuclear-Powered Submarine Safety Regulator, to “regulate the unique circumstances associated with nuclear safety and radiological protection across the lifecycle of Australia’s nuclear-powered submarine enterprise”.
The regulator, which will sit within the Defence Department, will also monitor infrastructure and facilities associated with the AUKUS pact such as the yet-to-be determined east coast submarine base.
Prime Minister Anthony Albanese stared down concerns from Labor’s Left faction about AUKUS, including about nuclear safety and the risks of nuclear proliferation, at the party’s national conference on the weekend.
Earlier this month the Defence Department revealed that it had awarded a 12-month contract to EY worth $8.4 million to advise on the design of a future nuclear regulatory agency.
Greens defence spokesperson Senator David Shoebridge said: “It’s genuinely unbelievable that in the middle of a national scandal about outsourcing core government functions to the big four consultants, Defence has gifted an $8.5 million contract to one of them to design a new national nuclear regulator.
“It was always wrong to have Defence in control of its own regulator for the AUKUS nuclear submarines, and now we can see how they have hand-picked a pro-nuclear consultant to design the whole thing.”
Shoebridge said he was troubled by EY’s deep connections to nuclear companies including US firm NuScale Power Corporation and China General Nuclear Power Co, as well as its role as the longstanding auditor for Japan’s Tokyo Electric Power Company, which operated the now decommissioned Fukushima power plant.
“This contract needs to be torn up and then this core duty of government, designing a nuclear oversight agency, needs to be done by government, not by a hired gun from the big four,” Shoebridge said.
Greens senator David Shoebridge said the government should not be outsourcing the creation of the new regulator to the private sector.Credit: Alex Ellinghausen
A Defence Department spokeswoman said the new regulator was being established to ensure Australia has the “highest standards of nuclear safety” as it acquires a fleet of nuclear-powered submarines.
“Ernst and Young has been engaged through a competitive tender process for a 12-month period, to support the design and development of the regulator,” the spokeswoman said.
“As part of the scope of the contract, specialists, including in naval nuclear power, will complement the Defence workforce to understand the requirements of the regulator, including against international standards.
“For any engagement, appropriate security and conflict-of-interest arrangements are put in place and regularly reviewed throughout the tender evaluation and negotiation process.”
EY declined to respond to questions about the contract.
During a Senate appearance in July EY Oceania chief executive David Larocca distanced the firm from rival PwC, which is under fire for leaking confidential government information to its clients.
Shoebridge said the nuclear safety regulator should sit inside a separate department – such as the Department of Climate Change, Energy, the Environment and Water – rather than Defence to ensure it could provide independent oversight of the AUKUS submarine program.
The Defence Department said the regulator, which will report directly to the defence minister, would be independent of the Australian Defence Force chain of command and direction from the department.
The government has been widely expected to name Port Kembla, in the Illawarra region of NSW, as the east coast base for Australia’s fleet of nuclear-powered submarines, but the idea has attracted a backlash from residents and unions.
The government has said it will store nuclear waste from the AUKUS submarines on defence land. Woomera in remote South Australia is seen as the most likely location.
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