Chapter 9

Chapter 9

Case Studies

9.1        In this chapter, the committee considers some specific projects that have attracted criticism including the AliceGhan resettlement facility, the Australian Leadership Awards Scholarships program for Afghanistan and more generally the whole-of-government arrangement for providing assistance to Afghanistan.

AliceGhan

9.2        As part of its resettlement program in Afghanistan, the Department of Immigration and Citizenship (DIAC) provided US$7.2 million to the UNDP for a housing project named AliceGhan. The project commenced in September 2006 following the signing of a record of understanding between the governments of the Islamic Republic of Afghanistan and the Commonwealth of Australia.[1] AusAID provided $1.75 million to the project in 2006 but AliceGhan remained under DIAC's management.[2]

9.3        Located approximately 45–50 kms north of Kabul, AliceGhan was to provide housing, public services and infrastructure for vulnerable returnee families.[3] Additionally, through 'a pilot approach', the project was intended to improve the sustainability of the settlement and the lives of its residents. This project was to place increased emphasis on community and economic development through the provision of vocational training and employment opportunities.[4]

9.4        DIAC informed the committee that the settlement's location was determined in close consultation with, and on the recommendation of, the Afghan Government.[5] The project, however, encountered several difficulties including setbacks in the identification of an appropriate site, mine clearance and resolution of a dispute over land ownership, which delayed the starting date.[6] The water supply in particular caused problems that required extended budget and implementation planning and the re-design of the water supply system.

9.5        Following resolution of several key issues, the project got underway, including construction activities, which commenced during mid-2008 allowing steady progress to be made.[7] Towards the middle of 2009, however, the issue of land and water rights re-surfaced with the Qarabagh Shura re-iterating and elaborating its demands regarding the ownership of land, access to water and the selection of Qarabagh residents as beneficiaries.[8] The Government of Afghanistan was to lead efforts to resolve the matters.

9.6        The construction of houses in AliceGhan was completed in December 2009 and the settlement handed over to the Afghan Government. DIAC explained that it had agreed to fund further initiatives to enable the settlement to reach its full potential, which included building boundary walls for each dwelling and employment generation and vocational training projects. Despite the project being officially completed, unfinished jobs, including the establishment of sustainable water infrastructure, blocked the implementation of further initiatives at AliceGhan.[9]

9.7        A temporary arrangement was put in place consisting of bringing water in by tankers, but as no permanent water supply solution had been found, people were unwilling to settle there. Thus, while the full capacity of the AliceGhan project had been planned for 1,525 families, the occupancy rate remained very low at around 25 per cent of the total capacity.[10]

9.8        DIAC explained that the Afghan Government was working with the local Afghan authorities to resolve the land dispute. In February 2012, DIAC informed the Senate Legal and Constitutional Affairs Legislation Committee of the low occupancy rates. The department indicated that it monitored developments with the project and had CARE conduct an assessment—a gaps analysis—relating to what was needed to rectify problems with AliceGhan. DIAC stated that it continued to liaise with the Afghan Government to encourage it to try to resolve outstanding matters, such as the land disputes and access to a sustainable water supply. The department indicated that there were no on-going costs.[11]

9.9        In December 2012, DIAC officers told the committee that the water supply had still to be resolved before all residents could be accommodated and that work continued on securing a water source with some progress being made towards that objective.[12] According to Mr Leahy from CARE, the situation had reached something of an interregnum and that obtaining a water supply and a number of other related issues were out of the hands of the Australian Government, the UN and CARE and that the relevant authorities in Afghanistan must tackle the problem.[13] DIAC recently informed the committee that its Principal Migration Officer in Kabul had worked closely with the Afghan authorities and the UNDP towards achieving a viable permanent water infrastructure solution. It noted that a potential well site had been located near the settlement and the UNDP was undertaking water potability and reliability testing to determine its viability.[14]

9.10      One observer, Mr Nassim Majidi, suggested that the AliceGhan project provided an example of ineffective planning on a land allocation scheme. In his assessment, the project foundered mainly because of:

9.11      When asked whether DIAC had undertaken an assessment of the circumstances around the decision to build AliceGhan, DIAC officers informed the committee that they were not sure whether an evaluation had been carried out.[16] Although funded partially by AusAID, when asked about the project, the agency indicated the program was managed by DIAC and questions should be directed to that department.[17] It should also be noted that AusAID provided technical advice to DIAC on 'general developmental issues and considerations for implementing such a project, including procurement and risk management issues related to construction activities (eg governance arrangements and financial management systems)'.[18] The UNDP produces a regular progress report but AusAID has not published any review or report on its role in the project.

Committee view

9.12      The committee understands that the location of AliceGhan was decided on the advice and recommendation of the Afghan Government. Even so, it would appear that Australian aid agencies, particularly DIAC as the lead agency, did not seek any independent advice or carry out due diligence on the suitability of the site and of land and water rights. Of greater concern, however, is the subsequent failure by DIAC or other relevant agencies including DFAT and AusAID to investigate formally the circumstances around the project's planning and decision-making. The committee believes that Australian government agencies missed an ideal opportunity to learn from and record the lessons to be learnt from this project.

Tarin Kowt Waste Water Facility

9.13      The ADF initiated, designed, built and funded the Tarin Kowt Waste Water Facility at a cost of approximately US$1.3 million.[19] The 2012 TLO report noted that the sewage treatment plant built on the outskirts of Tarin Kowt provided an unfortunate example of where inadequate consideration was given to management capacity and sustainability. It stated:

While the plant itself is described as 'beautifully constructed', it is not operational because there are simply no adequately trained local staff to ensure its operation.[20]

9.14      AusAID informed the committee that the facility has been handed over to the Tarin Kowt Municipal Government; that USAID had provided technical assistance to the municipal government; and the facility was now treating waste from the municipality.[21] Since 2011, AusAID has contributed $2 million to an USAID program that supports activities in the Tarin Kowt municipality, which includes support for the Tarin Kowt Waste Water Facility.[22] There appears to have been no evaluation of this project, especially around sustainability—the important issues of the operation and maintenance of a completed project.

Visa applications for visiting Afghans

9.15      In December 2012, Professor Maley explained to the committee that, in the previous March and with the support of both AusAID and DFAT, the Australian National University (ANU) held a very successful workshop. Funded generously by AusAID, the workshop focused on the challenges associated with holding the next phase of elections in Afghanistan.[23] Professor Maley explained, however, that three of the four Afghan invitees, who had been selected by the university in close cooperation with AusAID and DFAT, did not receive visas from DIAC in time to attend the workshop.[24]

9.16      One of the invitees—a visiting fellow at the Free University of Berlin—received his visa the day after the workshop concluded. Another, a staff member of the Asia Foundation responsible for coordinating election assistance, lodged an application approximately six weeks before the workshop but did not receive a visa. Professor Maley explained that when DIAC was asked about progress on this visa application, the department requested the Asia Foundation to provide information already contained in the original application. The Foundation was left with the strong impression that the application had been lost. The chief electoral officer for Afghanistan was the third person invited to attend the conference and not to receive a visa in time to attend the workshop.

9.17      Given that the intention was to ensure that Australia could have access to top Afghan specialists in areas relevant to the transition process, Professor Maley could not fathom the reasons for the delay in granting the visas. To his mind, however, the failure to do so suggested that there was a real problem. Certainly, it seemed to Professor Maley that DIAC was 'running its own foreign policy'.[25]

Australian Leadership Awards Scholarships

9.18      Professor Maley also raised concerns about processes relating to the Australian Leadership Awards Scholarships program for Afghanistan. In his view, the scholarships provide opportunities for the best and brightest of Afghan society to study in Australia and were a way to build a solid platform for Afghanistan's future. Based on his experience, however, deficiencies in administering the program could potentially harm Australia's reputation and were 'unfortunate for people in Afghanistan who in good faith have applied for scholarship support'.[26]

9.19      According to Professor Maley, an applicant for the scholarship, Mr Niamatullah Ibrahimi, is a remarkable man who holds a Bachelor of Science degree with honours in international relations from the London School of Economics. He has a contract from Hurst and Co. in London for the publication of his first book on Afghanistan. Currently he is the chair and co-director of a non-governmental organisation in Afghanistan called Afghanistan Watch.

9.20      Mr Ibrahimi applied for an Australian Leadership Award in March 2012, which was accompanied by strong endorsements from his referees, Professor Maley and Professor the Hon Gareth Evans AC QC. Mr Evans has been Chancellor of the Australian National University since January 2010 and is President Emeritus of the Brussels-based International Crisis Group. He was Australia's Minister for Foreign Affairs between 1988 and 1996.[27] In his reference, Mr Evans wrote:

I am writing to commend the work of Mr Niamatullah Ibrahimi, one of the brightest young Afghan analysts of his generation. Not only has Mr Ibrahimi demonstrated outstanding research, analytical and writing skills but for the last decade has proved an articulate and tireless advocate on often forgotten issues of human rights despite challenging circumstances for such work in Afghanistan.[28]

9.21      Before Mr Ibrahimi applied for the scholarship to fund his further studies, the ANU had already completed his admission to a doctor of philosophy program.

9.22      At that time, GRM International was the contractor and the development assistance facility for Afghanistan responsible for the administration of scholarship programs. Before the application was lodged, the company's scholarship manager in Kabul informed Professor Maley that Mr Ibrahimi did not need to have his degree from the London School of Economics certified by the Ministry of Higher Education in Kabul. Professor Maley conveyed this advice to Mr Ibrahimi and also informed the scholarship manager that he had done so. Subsequently, however, the GRM office informed Mr Ibrahimi that he had not been shortlisted for interview because his degree certificate had not been verified by the Afghan higher education ministry. Professor Maley spoke to the scholarship manager who confirmed that Professor Maley had discussed the matter of the certification requirement with him.

9.23      GRM International also informed Mr Ibrahimi that he did not have sufficient leadership potential. But, according to Professor Maley, the scholarship manager informed him that he [the manager] had made a mistake in his advice to Mr Ibrahimi, which was that there had been four applicants with similar names and the wrong feedback had been given to one of them. Mr Ibrahimi was then interviewed.

9.24      By November 2012, however, AusAID had temporarily suspended the process of awarding scholarships to allow time for the completion of a review of the program. Professor Maley sought clarification about the suspension from AusAID and received an email from the director of the Afghanistan section which stated that the process had concluded and that no Afghan fellows were selected for the intake. It went on:

I can also advise that Afghan candidates were notified of their unsuccessful applications in September by GRM (then managers of our Development Assistance Facility for Afghanistan).[29]

9.25      Mr Ibrahimi had received no such communication.

9.26      On 23 November, AusAID wrote to Professor Maley in an email explaining that its managing contractor had confirmed the names of those who were advised by letter in September that their applications had been unsuccessful. The e-mail stated further:

Although Mr Ibrahimi should have been advised, he was not. We will rectify this ourselves immediately by contacting Mr Ibrahimi directly to explain the situation.[30]

9.27      At the time of the committee's public hearings on 4 December 2012, Mr Ibrahimi had still not been informed.[31]

9.28      Highly dissatisfied with the way in which Mr Ibrahimi's application was processed, Professor Maley was left with a number of outstanding questions and has serious doubts about the administration of this program in Afghanistan. He noted:

There are of course 18 aid based AusAID staff in Afghanistan, and I would say a train wreck was beginning to take shape in July. I am wondering what kind of oversight responsibilities the aid based AusAID staff have in Afghanistan for these kinds of programs or whether it is a kind of fire-and-forget approach to what is being done by contractors.[32]

9.29      To Professor Maley's mind, a situation had developed in which:

...a significant amount of money will have been spent in Afghanistan in 2012 in a process that ultimately resulted in no students being awarded scholarships because the process of administration was suspended, as is identified on the AusAID website.[33]

9.30      He queried the advisability of suspending scholarship processes in the middle of a scholarship round rather than between rounds. In his opinion:

It is poor public diplomacy to invite people to spend their time filing applications, only then to leave them with the impression that those applications have not been taken seriously.[34]

9.31      Wary of multiple contracting because of the inherent risks, Professor Maley sought to understand why AusAID was not directly administering the scholarship recruitment rather than a Brisbane-based company.[35] He did note, however, that Australia had been, in his judgement, a less obsessive user of multiple subcontractors than, for example, the United States. The handling of the Development Assistance Facility for Afghanistan, however, has made him question AusAID's use of contractors.[36]

9.32      In January 2013, Professor Maley provided the committee with an update on Mr Ibrahimi's application. He referred to the e-mail of 23 November 2012 in which AusAID had informed him that the process for the current intake had concluded; that Mr Ibrahimi should have been advised of his unsuccessful application and would be notified. But Mr Ibrahimi was not advised until 21 December 2012 when he received the following email from AusAID:

I am contacting you to inform you that on this occasion your application for an Australian Leadership Award was unsuccessful.  As you know, the selection process is very competitive, with a high number of applications.

AusAID are contacting you directly because a review of the records indicated that you had not been previously contacted with this advice.  This was an oversight, and we would like to offer our apologies.[37]

9.33      To Professor Maley's mind, one reading of this email would appear to suggest that Mr Ibrahimi’s application was properly assessed but found to be uncompetitive. Professor Maley held strong doubts that this could be the case, surmising instead that Mr Ibrahimi was 'simply caught up in a blanket suspension of the Afghanistan program'. He stated further:

If, however, the application was individually assessed but viewed as uncompetitive, then I would have the gravest doubts about the quality of AusAID’s assessment process.[38]

9.34      Professor Maley informed the committee that on 18 December 2012, Mr Ibrahimi was advised that he had been selected to receive a 2013 Endeavour Postgraduate Award (PhD) to undertake doctoral studies in Australia. The Department of Industry, Innovation, Science, Research and Tertiary Education administers this program, which it describes as ‘the Australian Government’s internationally competitive, merit-based scholarship program providing opportunities for citizens of the Asia Pacific, the Middle East, Europe and the Americas to undertake study, research and professional development in Australia’. Mr Ibrahimi was the only applicant from Afghanistan to receive a 2013 Endeavour Postgraduate Award.[39]

9.35      In Professor Maley's view, Mr Ibrahimi’s ability to secure an even more exclusive Endeavour Scholarship provided clear proof of the man's outstanding capabilities as attested by his referees and noted above.[40] Dr Bizhan also referred to the poor management of the Australian scholarships through GRM International in 2012. In his opinion, the shortcoming in this program indicated 'a poor state of coordination among potential scholarship awardees, the Australian government, and the company'. He concluded that while coordination between the Afghan and Australian governments was sound, this was not so among the Australian government and Australian companies inside Afghanistan.[41]

Allegations of fraud

9.36      Surprisingly, AusAID informed the Senate Foreign Affairs, Defence and Trade Legislation Committee on 14 February 2013 that it was 'certainly aware of allegations of fraud in the program.' The Director General AusAID, Mr Peter Baxter, told the committee during a public hearing that the Australia Awards program in Afghanistan had been suspended in August 2012 because of allegations of corruption in the administration of the program. It should be noted that Mr Baxter did not volunteer this information but provided it in response to a direct question about whether the scholarships were being on-sold for profit.[42]

9.37      Mr Baxter informed the committee that the suspension was in accordance with AusAID's zero tolerance policy towards fraud and that it had commissioned an independent investigation into the allegations. He stated that in December 2012, he raised the matter directly with the Afghan minister for education in Kabul and while that investigation was underway AusAID would not be awarding any new long-term Australian Leadership Awards scholarships to Afghanistan.

9.38      The investigation is being undertaken by an independent audit company, Protiviti. As part of its contractual obligations, GRM International, who was responsible for the program at the time of the alleged fraud, is contracting, at AusAID's instruction, the independent investigator.[43] The investigation is expected to be completed in the middle of 2013, when AusAID will consider whether to recommence the program.[44]

9.39      The committee is at a loss to understand why an explanation for suspending the program was not provided to the committee in December 2012 soon after Professor Maley aired his concerns publicly about the program. Moreover, AusAID did not mention any fraud related matters for suspending the program in answer to a follow-up written question on notice from the committee about Professor Maley's concern.[45]

9.40      The committee understands that an independent investigation into the allegations of fraud in the program is necessary, though it is not convinced that the company responsible for administering it should be the one to commission the audit. The committee believes further that AusAID needs to investigate its own conduct with respect to not only the circumstances that led to the program's suspension, but to AusAID's oversight of the program and the poor handling of Mr Ibrahimi's application. It should not be overlooked that he received incorrect advice; was given misleading information (including a suggestion that he was uncompetitive); and overall subjected to a process that was highly unprofessional.

9.41      In light of the evidence pointing to serious deficiencies in the administration of the Australian Leadership Awards Scholarships, the committee makes a number of recommendations.

Recommendation 2

9.42             The committee recommends that AusAID conduct its own internal investigation into, and report on, the circumstances around the administration of the Australian Leadership Awards Scholarships for Afghanistan. The investigation to include, but not limited to, AusAID's due diligence; the adequacy of its oversight of the program; its promptness in responding to indications that something may have been amiss, and the reasons for its failure to inform the committee of allegations of fraud when the matter was discussed in December 2012.

9.43             The committee recommends further that, using Mr Niamatullah Ibrahimi's experiences as a case study, this investigation also look closely at the processes for communicating with applicants, including the accuracy and timeliness of advice; the transparency of the application and selection process; and the overall level of competence evident in the administration of this program.

The committee recommends that AusAID provide the committee with a copy of the report.

Recommendation 3

9.44      The committee also recommends that AusAID provide the committee with a copy of the report from Protiviti, an independent audit company, following its investigation into the Australian Leadership Awards Scholarships for Afghanistan.

General criticism

9.45      Some reports and evidence criticise more general aspects of Australia's ODA to Afghanistan. For example, the 2012 TLO study noted that in comparison to the Dutch, AusAID was seen as having, 'a complicated and long process to decide on the funding of a project'. In its view, the quick response and action needed for some important small-scale projects was 'now missing in Uruzgan.'[46] The committee has also mentioned non-specific observations to do with the sustainability of facilities built with Australian funds, schools without teachers, and health clinics not being fully used. The committee cannot, however, identify specific instances to verify these observations, though it notes that analysis, evaluation and reporting on Australia's ODA program to Afghanistan is weak. This matter is discussed in the final chapter.

Whole-of-government  

9.46      From the particular cases discussed in this chapter, the committee suggests that there appears to be scope for better coordination between government agencies. In this regard, it should be noted that Mr John Eyers, who has undertaken a survey of evaluations of Australian aid to fragile and conflict-affected states, found that the effectiveness of Australia's whole-of-government overseas aid is a surprising gap in recent such evaluations. He observed that the whole-of-government approach had received 'little direct attention, and less as the years have passed'.[47]

9.47      As noted previously, the analysis and assessment of Australia's development assistance to Afghanistan is dealt with in the final chapter.

Achievements

9.48      From 2000 to June 2012, Australia's ODA to Afghanistan accounted for over $710 million. While the committee has drawn attention to areas where Australian aid could have been more effective, the achievements cannot be denied. Many recent studies on Afghanistan preface their work with observations on the progress that Afghanistan has made.[48] As noted in previous chapters, there have been substantial and 'in some cases, remarkable gains in the country's key development indicators'.[49] Many evaluations of the country's progress refer to the strides made to advance the health and well-being of the Afghan people, the improvements in infrastructure development and access to water and energy.[50] Many witnesses similarly acknowledge the improvements in living standards such as increased school enrolments and better access to health services.[51] Caritas observed that the education sector had experienced a number of achievements ‘unprecedented in the history of the country’, particularly in terms of enrolments:

Today more than 7.3 million children attend primary school compared to 1 million in 2001; 38% or 2.7 million are girls.[52]

9.49      Indeed, since 2001 Afghanistan has established democratic institutions and ministries, made significant improvements in health care and immunization, reduced maternal mortality, infant mortality and under 5 mortality rates, expanded primary education considerably including for girls, embarked on the construction of roads, transport and communication infrastructure, boosted economic growth, and strengthened its law enforcement and state security forces.[53]

9.50      Australia can take credit for being part of the community of donors that have over the past decade or so assisted Afghanistan to rebuild its country and rehabilitate its people.

Conclusion

9.51      Despite the positive development gains in Afghanistan, most concede that the people of Afghanistan were still struggling to emerge from decades of conflict and political instability and to meet basic survival needs—food, shelter, education and health. The committee has discussed the main obstacles confronting the Government of Afghanistan and the donor community to rebuild the country—the sheer magnitude of the task, endemic corruption, severe capacity constraint and the ability of the country to absorb the aid effectively, the number of donors and insecurity. The country's security, political stability and government revenue are major problems looming as Afghanistan transitions to a country taking full responsibility for managing its own affairs.

9.52      In the final part of this report, the committee considers Australia's aid effectiveness as Afghanistan moves toward the decade of transformation.

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