23 April 2014

Disasters and Dollars

The Australian National Audit Office has released a 106 page  report [PDF] on Emergency Defence assistance to the civil community, assessing "the administrative effectiveness of Defence’s procedures to provide emergency assistance to the civil community".

The report comments that emergencies (inc bushfires, floods and cyclones) are frequent and range in severity from small-scale incidents to large-scale, catastrophic events.
The human and economic cost of these events can be substantial. For example, the Black Saturday bushfires in Victoria in 2009 claimed the lives of 173 people, affected over 78 communities and destroyed 2029 homes; and the insured cost for losses due to Cyclone Oswald in 2013 was estimated at $1.1 billion in Queensland and New South Wales, with $154 million in State and Australian Government assistance provided to those affected.
A well‑directed, coordinated and timely emergency management response acts to minimise the impact of an emergency on the community and support the recovery process. When a natural disaster or other domestic emergency occurs, it is primarily the responsibility of the relevant state or territory (state) government to protect life, property and the environment. State governments draw on a range of emergency services, volunteer organisations and commercial resources when responding to emergencies. State governments may also request Australian Government non‑financial assistance to provide additional resources for response and recovery activities.
The Department of Defence undertakes a large majority of Australian Government emergency assistance tasks in response to state requests. When Defence accepts a request and provides emergency assistance, this is referred to as emergency ‘Defence Assistance to the Civil Community’ (DACC). The benefits of utilising Defence in support of emergency responses include that Defence is often able to deploy Australian Defence Force (ADF) personnel (including Reserve personnel) with relevant expertise and skills (for example, engineers), as well as equipment (from transport aircraft to water purification units). Defence may also have the capacity to deploy its personnel and equipment at relatively short notice due to the geographical proximity of certain bases to incident areas and its access to transport assets. Further, Defence has developed approaches to the planning, coordination and conduct of operations, which may be readily adapted to emergency responses.
The report considered 275 emergency DACC tasks from 2005–06 to 2012–13, with emergency assistance that included the airlift of equipment and personnel, engineering support, search and support, temporary accommodation, health and psychological support, aviation refuelling; and communications.

ANAO concludes
Under national emergency management arrangements, state and territory (state) governments have primary responsibility for protecting life, property and the environment in the event of an emergency in their jurisdiction. When state resources are inadequate, the Australian Government can be called upon to provide assistance, representing a ‘surge’ capacity within the federation. Some of the skills and assets available to Defence to conduct military operations can be readily applied in support of states responding to natural disasters and other emergencies, and as a consequence there is a regular demand for Defence assistance. Defence can provide assistance either directly for local emergency assistance (category 1 tasks), or through Emergency Management Australia (EMA) for significant emergency assistance (category 2 tasks) and emergency recovery assistance (category 3 tasks). Defence’s emergency Defence Assistance to the Civil Community (DACC) procedures therefore need to establish clear decision making, coordination and administrative arrangements to guide Defence commanders and personnel on the conduct of tasks outside of core military operations.
The effective contribution of Defence in emergency situations is highly dependent on the quality of relationships across the areas of Defence with emergency DACC roles, and between Defence, EMA and state emergency management authorities. It also depends on a strong feedback loop so that on-the-ground experience informs future operations.
In recent years Defence has played a prominent role in responding to natural disasters in Australia. As part of five major emergency DACC operations between 2008–09 and 2012–13, Defence has deployed significant human and physical resources, organised in Joint Task Forces (JTF), to provide assistance to state emergency management authorities. For example, Defence assistance to the 2009 Black Saturday bushfires in Victoria reached a peak operational strength of approximately 800 Defence personnel per day, and over 1250 Defence personnel provided assistance over the seven weeks of the operation. For these major operations, Defence also recorded supplier expenses totalling some $6.7 million, for items such as travel, consumable goods and garrison support. Defence has also undertaken many smaller scale emergency DACC tasks utilising Defence base personnel and resources located in the area of an incident, at the discretion of local commanders.
ANAO considers that
Overall, Defence’s emergency DACC procedures are generally effective in guiding and enabling the provision of Defence assistance in response to emergencies. The DACC Manual outlines principles for Defence commanders to consider when judging the merits of requests for Defence assistance, including the need to evaluate the readiness of Defence resources to achieve the Government’s expected defence outcomes against the capacity to make those same resources available in an emergency. Defence has also developed sound coordination arrangements with state emergency management authorities, involving the appointment of Defence liaison officers, who communicate with states about their emergency assistance needs and Defence’s capability to provide support, both prior to and during emergencies. Emergency management authorities interviewed as part of this audit acknowledged the responsiveness of Defence and the value of the support provided. However, emergency DACC has been largely focused on response efforts, with less attention given to meeting the administrative requirements set out in the DACC Manual, particularly in the areas of task recordkeeping and cost recovery. There is also scope for Defence to develop a stronger feedback loop to inform decision making on future emergency DACC delivery approaches.
While emergency DACC is only a small part of Defence’s overall responsibilities, it can involve a large number of Defence personnel, and the utilisation of valuable Defence equipment and supplies. In the circumstances, there is a need for Defence to develop straightforward administrative requirements. The Instruction of 2004 and the DACC Manual of 2012 set out extensive reporting requirements for individual DACC tasks, indicating a desire by Defence to understand the nature and cost of the provision of DACC, and to learn from experience. However, for many years Defence has not met these requirements across the DACC tasks it undertakes. The main focus of Defence units has been to complete tasks, and they have not prioritised reporting on tasks outside of the Service chain of command. The failure to record key task data means that other areas of Defence responsible for emergency DACC strategy, procedures and reporting are not routinely informed about the nature, resource impact and cost of emergency DACC tasks, as well as any task acceptance and delivery issues. To address these issues, Defence should review task reporting requirements to ensure they do not present an unnecessary administrative burden, but instead give priority to meeting an appropriate set of requirements that generates useful information to help shape future emergency DACC activities while satisfying recordkeeping requirements for accountability purposes.
To further encourage states to manage emergency recovery efforts using their own resources, the DACC Manual requires that the direct costs incurred by Defence in undertaking category 3 ‘recovery’ tasks be reimbursed by states, and only allows the ‘waiver’ of cost recovery in limited ‘special circumstances’. However, Defence has not consistently recovered or waived costs in accordance with the requirements of the DACC Manual. In contrast to its current policy, Defence has advised that it plans to amend the DACC Manual to indicate that costs are ‘generally not recovered unless the government recipient agrees to pay costs’, and that cost recovery ‘may not be warranted where it is not cost effective or it would be inconsistent with government policy objectives’. However, this approach does not clarify the circumstances in which cost recovery is warranted and Defence personnel are obliged to pursue the recovery of costs.
ANAO acknowledges  a decision for Defence and the Government before commenting that it
suggests  Defence review and clarify its cost recovery policy for emergency DACC, and develop practical thresholds for the application of cost recovery, in terms of the estimated value and type of recovery assistance provided. Pursuing such an approach would reinforce the responsibility of state governments for emergency recovery when the immediate threat to life, property and the environment has passed.
The emergent nature of emergency DACC tasks means that it is difficult to develop and apply objective measures of performance. Nevertheless, identifying lessons from emergency DACC activities, including the efficiency and effectiveness of the approaches adopted remains important. Defence has established some elements of an emergency DACC evaluation and learning system, including reports on major operations and an annual Lessons Board. The Lessons Board considers key themes arising from these reports, and can recommend procedural changes to improve the efficiency and effectiveness of emergency DACC.
However, these elements are not currently supported by an information system to record and manage key lessons and recommendations arising from DACC activities, creating a risk that learning will be lost and actions not pursued. The initial roll-out of a Defence‑wide system for managing lessons learned is planned for July 2014, presenting an opportunity for Defence to develop a stronger feedback loop to inform improvement in the administration and delivery of emergency DACC activities.
Within Defence, various office holders, Groups and Services have different emergency DACC responsibilities, ranging from the development of strategy and procedures to the completion of tasks.
ANAO indicates that
The audit highlights that the overall effectiveness of emergency DACC administrative arrangements depends on the collective contribution of all of these areas toward planning, delivery, monitoring and review efforts.
It goes on to recommend that
Defence review the minimum information necessary to be reported for each emergency DACC task for planning, management and accountability purposes.
Defence should also "take steps to strengthen the priority afforded by Defence units to meeting mandatory reporting requirements".

The Treasurer has meanwhile tasked the Productivity Commission with an inquiry into natural disasters funding.

The Commission is to
analyse the full scope (incorporating the quantum, coherence, effectiveness and sustainability) of current Commonwealth, state and territory expenditure on natural disaster mitigation, resilience and recovery, and develop findings on the following:
1. The sustainability and effectiveness of current arrangements for funding natural disaster mitigation, resilience and recovery initiatives, including – where directly relevant to an improved funding model – the management of disaster relief and recovery;
2. Risk management measures available to and being taken by asset owners – including the purchase of insurance by individuals, business and state, territory and local governments, as well as self-insurance options;
3. The interaction between Commonwealth natural disaster funding arrangements and relevant Commonwealth/state financial arrangements;
4. Options to achieve an effective and sustainable balance of natural disaster recovery and mitigation expenditure to build the resilience of communities, including through improved risk assessments. The options should assess the relationship between improved mitigation and the cost of general insurance. In doing this, the Commission should consider:
a. How business, the community, Commonwealth, state, territory and local governments can most effectively fund natural disaster recovery and mitigation initiatives;
b. How to ensure the right incentives are in place to support cost-effective decision making within and across all levels of government, business, non-government organisations and private individuals;
c. Mechanisms and models to prioritise mitigation opportunities and evaluate the costs and benefits of a range of mitigation options;
d. Options for urban planning, land use policy and infrastructure investment that support cost-effective risk management and understanding of the changes to the risk profile;
e. Options to fund identified natural disaster recovery and mitigation needs, including thresholds for triggering Commonwealth assistance to the states and territories;
5. Projected medium and long term impacts of identified options on the Australian economy and costs for governments as compared to impacts of the current funding arrangements; and
6. Options for transitioning to and implementing any proposed reforms to national natural disaster funding arrangements.
In undertaking the inquiry the Commission is to "take into account the roles and responsibilities of Commonwealth, state, territory and local governments, communities, insurers, business (including private providers of essential infrastructure), non-government organisations and private individuals".  It
should consider funding for disaster response only where directly relevant to mitigation, relief and recovery and existing Commonwealth/state joint funding arrangements. The Commission should also take into account evidence from previous reports, reviews and inquiries, including best practice, from overseas and in Australia. It should also take into account relevant recommendations of the Commission of Audit and developments in federal financial relations, noting that the Commonwealth is developing a White Paper on Reform of the Federation. Further, since much disaster spending is directed towards infrastructure, the Commission should take into account evolving infrastructure and asset management policy and practice at the national, state and local levels.
The scope of the inquiry will be focused on naturally occurring rapid onset events that cause a serious disruption to a community or region, such as flood, bushfire, earthquake, storm, cyclone, storm surge, tornado, landslide or tsunami.