Managing DFAT in Challenging Times
Ladies and Gentlemen
Thank you for the invitation to speak to you today.
The membership of the AIIA, and the ACT Branch in particular, are recognised
as informed observers of the conduct of Australia's foreign and trade policy.
I welcome, therefore, this opportunity to talk with you today about two interrelated
- First, the dynamic foreign and trade policy agenda
that Australia is pursuing in response to the fluid international environment
in which we now operate; and
- Secondly, how we in the Department of Foreign Affairs
and Trade are reforming and reorganising ourselves so that we are best placed
to support the Government in responding to this agenda.
And, finally, I should like to describe for you briefly some practical examples
in specific areas which demonstrate how DFAT is contributing to the Government's
work in foreign and trade policy.
Foreign and Trade Policy Agenda
In the recent period, Australia, like many other countries, has had to contend
with a range of new challenges to international security.
Three particular issues have acquired high profile on the foreign policy
- international terrorism
- the spread of weapons of mass destruction; and
- instability and threats caused by weak and failing
You are aware, I think, of the ways in which Australia has sought to protect
and advance our national interests by responding to these challenges.
We made a high-quality contribution to the war against terrorism in Afghanistan,
and we are working hard in South-East Asia to help Indonesia and other partners
defeat the scourge of terrorism.
We participated in the war in Iraq to remove the proliferation threat posed
by the Saddam Hussein regime, and we are now helping with the ongoing effort
to stabilise and rehabilitate Iraq after years of oppression and dislocation.
The Australian Government is supporting the international effort to resolve
the North Korean nuclear issue, and we are a leading participant in the Proliferation
Security Initiative which is designed to check the illicit trade in weapons
of mass destruction technology and materials, and in the missiles that deliver
And in the South Pacific, we have responded to a request from the Solomon
Islands Government to lead a major regional intervention which is designed
to restore law and order and a better level of governance to that troubled
The Government is also making a major effort with Papua New Guinea to improve
its law and order situation, governance and financial management.
And more broadly in the South Pacific, we are actively supporting efforts
to strengthen regional institutions including, where appropriate, promoting
the pooling of resources, to ensure services are both deliverable and sustainable.
An uncertain and unstable world has made it more likely that Australians
living, working and visiting overseas will need our consular assistance.
It has also made it vitally important that we continue to provide accurate
and timely travel advice to the Australian public, particularly at a time
when the threat posed by indiscriminate acts of terror remains very real.
Another characteristic of our times is the globalisation of the world economy
which is continuing apace.
Globalisation imposes disciplines of competition that reward those countries
with open policies and sound institutions, and disadvantage those without.
The impressive record of the Australian economy relative to other advanced
economies over the past decade demonstrates that Australia has the policy
and institutional attributes to succeed in an era of globalisation.
But, of course, we have no grounds for complacency.
Continued and sustained efforts are required to improve the competitiveness
of our national economy and to promote as effectively as we can the further
liberalisation of international flows of goods, services and capital.
As part of this, the Government is currently pursuing the most ambitious
trade policy agenda in our history.
In Australia's trade policy, we accord primacy to the WTO multilateral process
because it has the capacity to deliver the biggest and widest gains for international
market access over time.
We are still working hard to achieve a positive outcome in the Doha round
of multilateral trade negotiations, particularly on agriculture, despite the
recent major setback at Cancun.
But we are also pursuing bilateral free trade agreements with selected partners
where these offer the prospect of significant gains ahead of what will be
achievable in the WTO process.
Thus, earlier this year, we signed an FTA with Singapore.
At the recent APEC meetings in Bangkok, Prime Minister Howard and his Thai
counterpart, Mr Thaksin, announced that the substance of an Australia-Thailand
FTA had been agreed – the first between a developed and a developing country
in our region.
And last week in Canberra, the Prime Minister and President Bush reaffirmed
their commitment to concluding the negotiation of the Australia-US FTA by
the end of the year if at all possible.
The Government has also been active in looking for ways to further strengthen
our already excellent trade and economic relations with North Asia.
After the United States, Japan is our second biggest two-way trading partner
and China is our third.
Last July, in Tokyo, Prime Ministers Howard and Koizumi signed a Trade and
Economic Framework which charts a course for the future development of our
trade and economic ties with Japan.
And last week's visit to Australia by Chinese President Hu Jintao saw our
two Governments announce their intention of conducting a joint feasibility
study on a free trade agreement between Australia and China.
Alongside the particular matters I have highlighted, DFAT and our overseas
posts are engaged in supporting the Government across a wide range of important
work in bilateral and multilateral areas as well as in more specialist disciplines
such as international security policy, international legal work including
that related to trade disputes, and the international dimensions of environment
This activity includes, among other things:
- broadening and deepening a sound and mutually beneficial
relationship with Indonesia
- building stronger relations with other key South-East
Asian partners including especially Thailand and Singapore
- finding ways to strengthen our policy dialogue with
the European Union; and
- promoting Australia's commercial interests with the
Middle East, including the Gulf countries.
DFAT's role in helping the Government manage such a wide-ranging and demanding
foreign and trade policy agenda is obviously a major challenge.
Relative to other foreign and trade ministries, we are not large.
Currently DFAT comprises 1940 Australia-based staff serving in Australia
and in our 86 overseas posts – with an additional 1413 locally engaged staff
supporting our A-based staff overseas.
This means we have to be nimble and versatile, while still able to nurture
and deploy a broad array of expertise and professional skills.
Of course, we are not starting from scratch.
In responding to the challenges of a dynamic and demanding foreign and trade
policy agenda, we are able to draw on our traditional strengths as an organisation
- in particular, the quality of our staff.
It helps in this respect that DFAT continues to be viewed as an attractive
and interesting place to work.
Our graduate recruitment process, for example, remains highly competitive,
with some 2500 graduates applying this year for a maximum 34 positions in
the 2004 intake.
Typically, DFAT officers are high achievers, with strong analytical, communications
and language skills.
And DFAT continues to have a strong reputation for the motivation and commitment
of its staff.
This continues to be reflected in our retention rates which are very high
by Australian Public Service standards.
For example, 90 per cent of our graduates recruited since 1996 remain in
This compares with an APS-wide graduate retention rate of around 60 per cent.
During the period of my leadership of the Department, my senior colleagues
and I have worked hard to build on these strengths.
Our goal has been to have not just high-quality and highly motivated staff,
but staff who are well led and well managed; and staff who can deliver outcomes
with respect to the Government's policy objectives and have careers that are
professionally and personally fulfilling.
A key reform has been a deliberate switch to the centralised management of
staffing, while maintaining our traditionally decentralised flows of policy
advice to Ministers.
This has given us a much greater capacity to be responsive, flexible and
efficient with respect to the deployment of staff.
It has also ensured a much fairer and more transparent process for staff
with respect to postings, placements and promotions.
And significantly, we have achieved this centralisation while decreasing
the number of staff working in the corporate management and corporate service
In 1993, we had 486 staff working in corporate management and corporate service
Today that number is down to 273.
We have retained, with minor adjustments, an eleven-division structure for
DFAT headquarters because it provides a strong framework for handling efficiently
most of the Department's work.
But the adroit use of off-line senior positions such as an Ambassador for
the Environment, an Ambassador for People Smuggling Issues and an Ambassador
for Counter-Terrorism, and the temporary establishment of special task forces
and crisis centres have allowed us to respond successfully to surges in work
without detracting from the Government's ongoing foreign and trade policy
More generally, we have made a deliberate effort to up-grade the status of
and the resources devoted to trade policy and consular work; areas the Government
has defined as key priorities.
With regard to our trade work, for example, a number of new senior positions
have been created including two special negotiator positions at the FAS level.
Staff resources devoted to trade policy work have increased by 26 per cent
Indeed, the division charged with pursuing the WTO Doha round has around
60 per cent more staff than the corresponding division had at the end of the
Uruguay Round of multilateral trade negotiations.
Again, because of the centralisation of staffing and resource management,
we have been able to do this in a rational and efficient manner, without detracting
from our pursuit of the Government's other key policy objectives.
The more efficient management and deployment of our staff has been one key
pillar of our reforms.
But just as important has been our drive to ensure that our staff manage
their own work more efficiently.
Central to this goal has been our Working Smarter campaign.
While the campaign is ongoing, it has already seen major changes in our work
culture and is helping to create a new paradigm for the successful DFAT officer.
Working Smarter is today a key performance indicator for DFAT staff.
It defines success not by the number of hours an officer works, but by their
- focus on and achieve what is core, rather than what
- organise their own time strategically and efficiently;
- task any subordinates strategically and thoughtfully;
- and maintain a healthy balance between their professional
and private lives.
The campaign has been successful in radically streamlining the preparation
of cables and other documents, and in improving the effectiveness and efficiency
As a part of Working Smarter we have tried to focus much more on delivering
outcomes rather than simply demonstrating activity.
In particular, we have elevated achieving outcomes from advocacy to be a
key benchmark for measuring the effectiveness of DFAT's work overseas.
I use "advocacy" here in the broadest possible sense to embrace all honourable
forms of persuasion – policy representation, formal negotiation and public
We still value traditional diplomatic activities such as networking, policy
liaison, reporting and analysis, and attending conferences and meetings –
not as ends in themselves but as means for achieving better outcomes for Australia
in the external environment.
There are four other initiatives that have strengthened DFAT as an organisation
that I should like to mention: our ongoing commitment to diversity; our insistence
on the highest professional and ethical standards; our commitment to training
and staff development; and our leveraging of technology.
While we are not there yet, today DFAT's workforce is coming closer to our
aspiration of a Department which is a representative face of contemporary
Notably, the profile of women and indigenous officers in the Department has
continued to rise.
Women now make up 23 per cent of the Senior Executive Service (SES), compared
to 6.9 per cent ten years ago.
And in that same period, we have more than doubled the number of indigenous
officers in DFAT from 14 in 1993 to 32 today.
Maintaining the highest possible standards of integrity and professionalism
in the policy advice we provide to Ministers, in faithfully implementing the
Government's decisions, and in serving the Australian public to the fullest
of our ability is a hallmark of the contemporary Department of Foreign Affairs
We also place considerable emphasis on the maintenance of strong ethical
standards, including observance of the Australian Public Service Code of Conduct.
A strong commitment to staff training and development has been a critical
factor in raising the productivity and effectiveness of our employees.
Our training and development strategy is recognised as being at the forefront
of APS practice, as was demonstrated by the Department being invited to participate
in an ANAO and APS Commission reference group to prepare an APS guide to better
practice in learning and development.
The Department delivers a wide range of in-house training workshops, covering
key professional skills, leadership and management, finance and administration,
consular skills, IT and security.
Professional language proficiency is central to the work of the department.
Following a comprehensive review of our language training programs in 2001,
we introduced a new approach to more closely align our language training investment
with Australia's policy priorities.
The key outcomes of the review included a new tier structure of priority
languages to more accurately reflect Australia's foreign and trade priorities,
and a reassessment of language-designated positions overseas to ensure that
resources are allocated where they are most needed in accordance with those
In-country language training has been increased, and language proficiency
allowances have also been increased to further encourage staff to retain their
language skills 'out of country'.
Finally, we have made a major effort to leverage advances in technology to
improve our efficiency.
In recent years, the Department has invested in a new IT and communications
system which provides a range of labour-saving databases to staff around the
It also provides access to classified and unclassified IT systems via one
And the Government has provided funds to upgrade the secure communication
links with our overseas missions, ensuring that Australia's official international
communications can be carried out with greater speed, security and reliability.
It is important to note that all these reforms have taken place against the
background of broader change in the Australian Public Service.
It would have been difficult, if not impossible, to carry out many of these
changes we have made to the way DFAT works without the devolution that has
taken place in the APS.
Similarly, APS reforms related to budget transparency and accrual accounting
were the basis for our own marked improvements in financial management, including
the appointment in 1999 of a specialist chief financial officer.
Managing for policy outcomes
Management and organisational reforms are not ends in themselves.
In DFAT our aim is to manage ourselves well so as to be in a better position
to achieve policy outcomes for the Government and Australia.
Innovative and flexible work structures have helped us meet the challenges
arising from a rapidly evolving international security environment.
This is well illustrated by the major role played by DFAT in support of Australia's
participation in the Iraq war and our intervention in the Solomon Islands.
Our Iraq Task Force led interagency coordination and was pivotal to the Government's
intensive diplomatic efforts.
It has since coordinated Australia's contribution to Iraq's rehabilitation.
Similarly, our Solomon Islands Task Force coordinated the Government's strengthened
assistance package and managed the dispatch of the multi-national regional
assistance mission - itself coordinated by a senior DFAT colleague, Nick Warner.
In each case we were able to assemble quickly a team of officers to cope
with the extra workload, and re-absorb and re-deploy staff once the surge
in activity subsided.
Centralised management of staffing meant we could get the right people with
the relevant expertise or work skills into the areas we needed them.
And our development of a range of IT and communications solutions for remote
locations allowed diplomatic staff quickly to establish a fully operational
presence in Baghdad following the end of major combat operations there, and
with the Regional Assistance Mission to the Solomon Islands.
Our flexibility and responsiveness have also been tested and proven in major
consular crises, notably the terrorist bombings in Bali on 12 October 2002.
Although these terrible events took place in the middle of the night, our
consular crisis machinery was activated within three hours.
And the Inter-Departmental Emergency Taskforce, chaired by a DFAT Deputy
Secretary, met within hours of the bombings to coordinate a whole-of-government
The Department's Emergency Call Unit handled over 30 000 telephone calls
in the first days of the crisis and recorded details of almost 5000 individuals
for whom family members or friends had concerns.
The magnitude of the response required a concerted effort from all areas
of the department.
Over 700 staff volunteered to work in the Crisis Centre and Emergency Call
Our posts in Bali and Jakarta moved quickly to respond to the unique demands
placed on them.
Experienced consular, medical, military and policy personnel were immediately
sent to Bali.
Of course, DFAT is also playing a role in support of the Government's ongoing
efforts to help defeat terrorism in South-East Asia.
We have helped to foster and strengthen regional cooperation, negotiating
eight bilateral counter-terrorism MoUs, including with Indonesia, Malaysia,
Thailand, the Philippines and Cambodia.
These arrangements have been the basis for effective cooperation between
regional law and order and security forces.
This cooperation has helped prevent terrorist attacks, disrupted terrorist
groups and seen terrorists arrested and charged, including those responsible
for the Bali bombings.
As I mentioned already, we have also created a new position of Ambassador
for Counter-Terrorism to coordinate Australia's international counter-terrorism
policies and capacity-building efforts.
And we are working assiduously in support of the regional counter-terrorism
summit that Mr Downer will co-host with his Indonesian counterpart next year.
In the trade policy area, another striking example of DFAT's enhanced coordinating
role is the leadership by my colleague, Steve Deady, of Australia's team in
the FTA negotiations with the United States.
This week, the fourth round of formal negotiations is taking place in Canberra.
Around 50 Australian officials are participating in this process, representing
18 separate departments and agencies and comprising some 20 different negotiating
Between negotiating rounds, senior members of the Australian team are engaged
in detailed consultations with relevant industry organisations and representatives.
These are just a few examples of the practical contributions that DFAT is
making to the Government's foreign and trade policy achievements.
As I mentioned earlier, I believe it would have been difficult for us to
handle such a demanding and wide-ranging agenda without some of the fundamental
management reforms we have undertaken in the last five years.
Indeed, this raises a broader point that is gaining increased recognition
That is, that a critical component of a country's international effectiveness
is its institutional and organisational strengths; whether it be with respect
to realising the opportunities afforded by economic globalisation, or responding
to the challenges of a more uncertain international security environment.
Along with good policies, strong institutions are one of the main reasons
that Australia is able to respond so effectively to today's fluid international
I believe that, in terms of professionalism, integrity and effectiveness,
Australia has one of the best public services in the world.
My Department tries hard to contribute to that national asset.