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NATIONAL CONFERENCE & EXHIBITION
2014
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Probity – a swimming pool with no deep end…..
You can get quickly out of your depth Jim Box
www.roomtorun.com.au [email protected]
2
Definitions and terminology
“Probity”: integrity, uprightness;
honesty; uncompromising
adherence to highest ideals.
“Integrity”: unbroken completeness
or totality with nothing wanting;
soundness, honesty, sincerity.
‘Probity is just common sense?’
…..WRONG
National Conference & Exhibition 2014
3
Why it isn’t Common Sense – individual values:
Ideology Approach to probity but unpredictable
Situationists Defer rules or values; ask if the action
yielded the best possible outcome in the
given situation
Subjectivists Reject rules or values; base integrity on
personal feelings about the action and
settings
Absolutists Feel actions are right provided they yield
positive consequences through
conformity to rules/ values
Exceptionists Feel conformity to the rules/ values is
desirable, but exceptions are often
permissible
Ref: Jepson School of Leadership Studies, Ethics and Moral Judgment,17/6/2008
National Conference & Exhibition 2014
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Probity, and the law
Societies/cultures have
differing positions on
morals, ethics,
accountability and
corrupt behaviour.
There is no homogeny,
leaving ethics open to
perception and
judgement
‘Black-letter’ law, case
law, interpretive law,
and policies establish
some basic rules/values
for ethical behaviour
National Conference & Exhibition 2014
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Summary of the Process Contract
Confirmed in Aust since Hughes Aviation v
CAA (HCA) - a paradigm case
Further key confirmation in Ipex vs State of
Vic (Treasury) (VSC), and Dockpride v
Subiaco Redevelopment Auth’y (WASC)
Several related judgements in Aust & O’seas
Imposes an implied ‘Process Contract’
obligation on any public entity to:
act consistently,
act in good faith, and
deal fairly.
Unlikely that a ‘no contract’ clause will
succeed.
National Conference & Exhibition 2014
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The ‘constructs’ of probity within Integrity
Probity principles to achieve integrity:
Fairness and impartiality
Accountability, & transparency of process
Managing interests & influence
Security and confidentiality
Acting with fiduciary duty.
Embodies core ethics values of honesty,
loyalty, objectivity, and ‘virtuosity’National Conference & Exhibition 2014
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Probity assurance is about:
Identifying and Planning for
the Probity Risks
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Probity Planning
Should be concurrent with procurement
planning & tender/grant preparation
Should address Probity Risks: Risk identification and reason
Risk analysis and effect
Strategies for dealing with the risks
Action assignment/designation
National Conference & Exhibition 2014
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Probity Risk areas include ...
Accountability and compliance
Failure to account for and comply with all
relevant policies, statutes, directives, codes,
standards, and instructions.
Adequate Transparency
Poor evidence of compliance;
Lack of justification or defensibility for
decisions or processes
Communications issues
Inconsistent communications,
Inadequate communication protocols
and.....
National Conference & Exhibition 2014
10
Probity Risk areas include ...
Selecting the appropriate supply approach Lacking competition,
Lacking information on the market or
requirements,
Expediency.
Ineffective evaluation Inconsistent or unfair or bad faith dealing,
Can’t differentiate with defensibility,
Can’t evidence value for money.
Consistency in all documents and dealings Inconsistent information across tender,
evaluation, contract, and communications
and.....
National Conference & Exhibition 2014
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Probity Risk areas include ...
Confidentiality Breach of confidentiality
Privileged information
Misuse of intellectual property
Security of information Inappropriate, uncontrolled, or unapproved
access
Information mishandling
Undue Influences of all sorts Stakeholder interests – internal & external
Untimely demands for information
Unsolicited proposals
and.....
National Conference & Exhibition 2014
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cont.... Probity Risk areas include
Conflicts of interests – real, perceived,
potential Most misunderstood issue
Gifts, benefits, corrupt payments, secret
commissions
Incl. Family, associates, relationships
Confused fiduciary duty (moral or legal)
Due diligence Financial viability
Related parties
Reputability
Supply chain sustainability
Environmental, industrial,& social
responsibility
and.....National Conference & Exhibition 2014
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cont.... Probity Risk areas include
Contract issues Selection fair and defensible
Consistency with requirements and
evaluation
Control of costs
Performance measures
Realistic, measurable, and managed
Potential for discrimination or limiting
competition
Cross-agency & Cross- Gov’t issues Failure to consult on related issues
Hidden agendas & agency power-play
and.....
National Conference & Exhibition 2014
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cont.... Probity Risk areas include
Possibly issues of user or community
consultation Inadequate appreciation if the essential
outcomes
Imbalanced or misinterpreted community
interests
Issues with technical advisers Not contemporaneous
Undue influence & bias
Not an ‘expert’
Unclear fiduciary duty
Over-reliance
National Conference & Exhibition 2014
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Probity risk assessment
The likelihood/ severity profiling often
doesn’t fit, due to: unpredictability
Human element
No common understanding of integrity
The risk consequence may not occur, due
to: Lack of transparency
Risk of retribution
Cost of redress
Lack of satisfying remedy
Ignorance of redress options
etc
National Conference & Exhibition 2014
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Questions ?
Next session we’ll examine a
classic Case Study
National Conference & Exhibition 2014
17 Chinese Walls or Trust George Sparks is the Head of the Information Technology Systems Branch of a
Government Department. The department has large and complex IT and
telecommunications systems and requirements. His responsibilities include the
tactical development and strategic planning of the department’s IT and
Telecoms systems state-wide; and cross-jurisdictional liaison on related
technologies. George knows the immediate and future requirements of the
department for information and communications technology requirements; and
also with Government’s IT strategies.
In his responsibilities, George meets regularly with industry and discusses
technology. He is well known by industry. George also is well respected in the
Agency.
One particular requirement of George’s department is to replace the outdated
security monitoring and alarm technology across some 4000 facilities across the
state. It is old technology, and creates problems with new facilities. As well, the
telecommunications carrier will no longer support connectivity to the old
system. George is well versed with the available technologies, products, solution
providers and options, and has his staff working on the development of a tender.
A major supplier in the market who is a strong contender for the new system
offers George a job with a package good enough to lure George from the Public
Service. George accepts the deal and submits his resignation on 4 week’s notice,
telling the Department of the company for which he intends to work.
What are the risks?National Conference & Exhibition 2014
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Questions ?
Probity guides are available on:
www.roomtorun.com.au
National Conference & Exhibition 2014
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NATIONAL CONFERENCE &
EXHIBITION 2014
Platinum Sponsor
Silver
SponsorBronze Sponsor
Risk Manager of the Year Award Sponsor
Conference and Exhibition
Partners