29 November 2011

The Middle East legacy of Dennis Ross

Readers of this blog will be aware that I am no fan of US Middle East “expert” Dennis Ross, one of those members of the US foreign policy establishment who migrates between the State Department and the American Israel Public Affairs Committee and its offshoot and its offshoot the Washington Institute for Near East Policy (WINEP), one of those people of whom I feel if you asked the question, “Do you serve the United States or Israel”, they would not understand the question.

Ross, who is known around Washington as “Israel’s lawyer” has never made any secret of his feelings towards Israel, so there is nothing stealthy or furtive about his manoeuvring in support of that country, but this being the case, the reliance that the Obama Administration, supposedly dedicated to creating a new relationship with the Muslim world and with Iran in particular, placed upon him is nothing short of extraordinary.

In March 2009, in Hillary's envoy: not everyone is cheering, I commented on his bizarre appointment as Hillary Clinton’s special adviser on Iran, and followed up with a post in May 2009 – Iran: Hillary’s envoy (contd.) – in which I noted the views of an Orthodox Jew who had served as US Ambassador to Israel and Egypt, who commented that in Middle East peace negotiations:

The perception always was that Dennis started from the Israeli bottom line, that he listened to what Israel wanted and then tried to sell it to the Arabs.

Further posts included Dennis Ross on the move?, noting rumours that he was moving to the White House, and Making U.S. Iran policy, an extended analysis of the dysfunctional way in which the US Administration was approaching Iran, and Dennis Ross’s role in that.

Andrew Sullivan addressed this theme in March 2010 in a post Dennis Ross Bats for Netanyahu on The Atlantic’s blog The Daily Dish.

A more extended summary of Ross’s contribution to the failure of Obama’s Middle East policy may be found in my 15 January 2011 post Pro-Israel control of Obama’s Middle East Policy.

An interesting addition to the dossier was published as an op-ed piece in Al Jazeera, 23 November 2011, following the announcement that Ross is leaving his post. Entitled The incomplete legacy of Dennis Ross, it was contributed by Robert L. Grenier, chairman of ERG Partners, a financial advisory and consulting firm. Grenier retired from the CIA in 2006, following a 27-year career in the CIA's Clandestine Service. He served as Director of the CIA Counter-Terrorism Center (CTC) from 2004 to 2006, coordinated CIA activities in Iraq from 2002 to 2004 as the Iraq Mission Manager, and was the CIA Chief of Station in Islamabad before and after the 9/11 attacks.

During the Clinton era he was the deputy National Intelligence Officer for the Near East and South Asia, and saw at first hand how Ross exercised his undoubted influence to undermine rather than strengthen efforts to create a durable peace following the signature of the Oslo accords.

Grenier’s summary assessment of Ross’s contribution over his time in US Government is:

During his eight years as chief architect of the peace process under Bill Clinton, Dennis was not so much a cause as a symptom of the deep, disqualifying political dysfunction at the heart of US policymaking in the Middle East. Without the dysfunction, you would not have had a Ross to exploit it.
And now, we are told, Dennis is leaving, after nearly three years in the Obama administration. His increasing prominence over those three years is a mark and a measure of Obama's growing disappointment and failure. For an administration which started with such elevated goals in the Middle East, it has come to this: Instead of engaging Iran constructively, as it had hoped, it has devolved instead to a sterile, sanctions-based stalemate, with scant international support, strongly shaped by Ross, who advocates an Israel-centric posture against the Islamic Republic. And instead of exerting judicious pressure on both Israel and the Palestinians to achieve the two-state breakthrough which US interests would dictate, Obama has had to cave instead to the overwhelming political influence of Binyamin Netanyahu, and has looked to Ross as his shield against a pro-Israel lobby which would otherwise turn against him, and may yet do so.

The problem is, as Grenier puts it:

In his many years of successful advocacy, he has precisely mirrored both the strengths and weaknesses of his client, and therefore must be assessed as having represented his client badly: Like the Israelis, he is a brilliant tactician and a strategic ignoramus. A better advocate might have saved his client from himself. Instead, Dennis' many years of successful temporising have helped to bring Israel to the point where a two-state solution is no longer possible. Thanks in some measure to Dennis' efforts, Israel in future can be Jewish, or it can be democratic: It cannot be both. Having served Israel to the point of helping to destroy Zionism: That is the very definition of catastrophic success.

Read the complete Grenier piece here.

Defence: expenditure delayed is expenditure denied

In an interview with Lyndal Curtis on ABC NEWS 24 on 22 November 2011 (see here) Defence Minister Stephen Smith commented on the need for Defence to contribute to the savings necessary for the government to bring the budget back to surplus:

LYNDAL CURTIS: If there are savings found in Defence will there be real savings or delaying spending? And could, if there is a delay in spending, could that create a capability gap?

STEPHEN SMITH: Well two things. Firstly, again I won’t get into the detail; people should wait until my MYEFO comes out or, in some respects more importantly, wait until the budget comes out next year before descending into the detail.

But in terms of capability as we know because you’re dealing with a big capability program and you’ve essentially got a capability plan which covers a span of a decade or more, there’s always movement, there’s always moving around. We’ve seen that in the past and there are no surprises there. And that always occurs not just under this Government but under previous Governments – I suspect it always will. What we don’t want to do is to do things that have an adverse impact on capability or on operations and I’ve consistently made it clear as Minister that if Defence does make a contribution to a general budget outcomes then that will not in any way adversely impact upon our operations. Firstly whether that’s Afghanistan, Solomon Islands or East Timor and secondly, we are always very conscious about capability; but there’s always movement on the capability front either as a result of action by industry or as a result of technical or other difficulties. There’s always movement at that station.

The Minister’s assurance that the savings will not have an adverse impact on operations is entirely appropriate and in the short run at least is entirely achievable, but that is only part of the story:

(1)    The corollary of the protection of expenditure required for operations is that the savings will come from a mixture of the capital equipment program and the budget for through life support (maintenance) of valuable, complex equipment, both of which are an essential part of capability.  This has an inevitable consequence for future operations and the military response options available to future governments.

(2)    As the Minister reminded us earlier in the interview:

In the course of the last budget, Defence effectively made a contribution of about four billion dollars over five years to help return the Government to surplus and that was as a result of more effective work we were able to do under our Strategic Reform Program.

(3)    The savings garnered under the Strategic Reform Program were to have funded the very ambitious re-equipment of the Australian Defence Force outlined in the 2009 Defence White Paper, but as the Minister’s remarks make clear, they have instead been harvested as savings.

(4) …The notion that savings merely “delay” defence expenditure (“slip everything to the right”) is a spurious one – in plain English, any savings represent a reduction in expenditure.  In last year’s Budget Defence had its budget reduced by an average of $800 million per annum for five years.  That sounds like real money to me.

(5)    Those savings and the prospect of more in the next Budget make a mockery of the “certainty” that the Rudd Government gave to Defence, in the context of the White Paper, that the Defence budget would increase in real terms by 3.3% until 2018 and 2.3% after that.

Some over-arching comments about the state of the Defence re-equipment program:

(1)    As noted in Defence savings: the impossible dream, I do not think the proposed savings are there.

(2)    Even if they were, nowhere does the Defence White Paper demonstrate that the combination of the $20 billion in savings plus the then projected growth of the Defence budget would be sufficient to cover the cost of the ambitious re-equipment program, let alone the increase in through-life support and personnel costs for an expanded and modernised defence force.

(3)    The reductions in Defence outlays only serve to take the re-equipment program even further from being achievable.

(4)    Delays in decision-making at the National Security Committee of Cabinet are further compromising the program.  To take just one example, as I remarked almost two years ago in Future submarine: no time to waste, the Government was even then bumping up against some severe timelines if it wishes to bring a replacement submarine into service in 2025.  In order to do that we would need to be undergoing sea trials in 2022, and working back from there we would need to be cutting metal in 2016.  That is no longer achievable, so the delays have already committed the Australian public and a future Australian Government to a multi-billion dollar refit of the Collins class submarines, in order to enable us to maintain a submarine capability at all – and that will be a 1990s submarine operating in the demanding environment of the 2020s.  These delays have real consequences.

I think we have arrived at the stage where we need to go back to the drawing board on the Defence White Paper and re-define what it is that we want the Australian Defence Force to do, what capabilities it will need in order to perform its allotted tasks, and what funds Government is prepared to commit to that end. Above all, the stated requirements must be backed up by the necessary resources, or they are just words on paper.

25 November 2011

Exporting uranium to India

The announcement by the Prime Minister that she intends at the forthcoming ALP National Conference to seek a change in the Party’s Platform to permit the export of uranium to India is of concern on three grounds: the content of the policy change; the apparent failure to extract anything in return for what is by any measure a major policy shift; and the extraordinary decision-making process by which this change is to be brought about.

The change has been presented publicly as little more than an administrative matter designed to correct an anomaly in our current export policy.  The narrative runs that the policy discriminates against India because we are prepared to export uranium to China, a nuclear weapon state, but not to India for peaceful use. This is arrant nonsense.

Australia’s uranium export policy was established in the late 1970s following an extensive public inquiry (the Ranger Uranium Environmental Inquiry 1976-77) chaired by Justice Russell Fox.  The policy was a product both of Australia’s strong commitment to the Nuclear Non-Proliferation Treaty (NPT), which had entered into force in 1970, and to the finely balanced set of recommendations produced by Justice Fox to garner the widest possible consent to the mining and export of uranium within an area of extraordinary environmental value, inhabited by indigenous people living a traditional lifestyle.

Under the framework set forth by Fox, mining would be able to proceed under a strict regulatory regime, with strong environmental monitoring and research, the Kakadu National Park would be established, and Aboriginal title would be granted over a number of areas of land in the region, including the Ranger Project Area.

This was a package deal, and the Fraser Government wisely decided not to tamper with it.

On the question of exports of uranium, the Fox Report recommended:

No sales of Australian uranium should take place to any country not party to the NPT. Export should be subject to the fullest and most effective safeguards agreements, and be supported by fully adequate back-up agreements applying to the entire civil nuclear industry in the country supplied. Australia should work towards the adoption of this policy by other suppliers.

This has remained the basis of Australian policy to the present day.  It is an approach that has had the advantage not only of supporting the NPT (and hence our own non-proliferation objectives) by making access to the world’s largest supply of low cost uranium available only to parties to the NPT, but also of enabling us to use the International Atomic Energy Agency (IAEA)’s safeguards and inspection regime as our primary worldwide infrastructure for verification of the appropriate handling of “Australian Obligated Nuclear Material” (AONM).

In implementing Fox’s recommendations the Fraser Government went beyond simply requiring states wanting to purchase Australian uranium to be parties to the NPT.  They were required to enter into a bilateral safeguards agreement which required, inter alia, that in relation to all AONM the importing party would seek Australia’s prior written consent to transferring the material to any third party, enriching it beyond 20% U-235, and reprocessing it.  This has remained the policy to the present day, and the April 2006 agreement between Australia and China embodies those principles.

India is not a party to the NPT, has never been, has developed a nuclear weapons capability as a non-member of the Treaty, and accordingly, is in an entirely different position from China vis a vis Australian uranium export policy.

As part of a deal to enable India to gain access to US and other nuclear technologies, Prime Minister Manmohan Singh and then President George W. Bush issued a joint statement in July 2005 to the effect that India would separate its civil and military nuclear activities and place all its civil facilities under IAEA safeguards, in return for which the United States would work toward full civil nuclear cooperation with India.  An IAEA Safeguards agreement was signed in 2008, and India was granted an exemption by the Nuclear Suppliers Group, an export control group that had been established mainly in response to India’s first nuclear test in 1974.

The IAEA Safeguards Agreement with India is not without its critics.  Daryl G. Kimball, Executive Director of the Washington based Arms Control Association notes that:

The agreement is based on the IAEA's facility-specific safeguards (INFCIRC 66 Rev. 2 ) but contains a number of "India-specific" modifications that raise serious questions about the meaning and legal requirements established by the agreement, particularly as they affect its entry into force and the conditions under which safeguards may be terminated on facilities and materials subject to the agreement.

He goes on to say that the agreement contains important ambiguities because there does not appear to be common understanding between the Government of India and the IAEA Board regarding three critical areas: whether or not India can withdraw facilities from the agreement in certain circumstances, i.e., whether material and facilities once placed under safeguards must remain there in perpetuity; the absence of a declaration stating the facilities, items and materials that India is intending to place under safeguards, and the status of material subject to safeguards under previous agreements.  The full analysis of the Agreement by Kimball et. al. may be accessed here.

As a consequence of these changes India is now in the privileged position of being the only known country with nuclear weapons which is not a party to the NPT but is permitted to carry on nuclear commerce with the rest of the world.  The discrimination is in India’s favour, not against it.

It may be that this change in India’s circumstances warrants a review of Australian policy, but that is by no means clear.  An equally tenable position for Australia would have been to state that for over 30 years Australia has had a policy that it will not export uranium to countries that are not parties to the NPT and that is not going to change.

Certainly granting India this favoured status has served no discernible non-proliferation objective, and one of the questions which ought to be addressed by Australia is whether any benefits to our non-proliferation objectives can be secured as a quid pro quo for a modification of our longstanding policy.  Perhaps not, but the question ought to be calmly and systematically addressed, and used as part of the bargaining process.

Unfortunately, what we have seen here is yet another example of the Prime Minister’s penchant for making announcements first and entering into the negotiations later.  We saw a classic example of this in relation to the “Malaysia Solution” for the offshore processing of asylum seekers, and one would have hoped that the lesson would have been learned by now.  One of the essential criteria for success in any government to government negotiation (as in most other negotiations) is to have time on your side. It is of fundamental importance to be able to communicate to the other side that you are not in a hurry regarding the matter in question. Once the other side knows you are in a time bind, they have only to wait you out. So once the Government has made an announcement on any matter that it is going to negotiate a with another country a “solution” to what is presented to the Australian public as some kind of a problem for us, the other side knows that the Government looks and feels sillier with every passing day that an agreement is not in place and it is just a matter of time for the prize to fall into their hands on the most favourable possible terms.  The Gillard Government is not unique in this respect. John Howard made it clear that he was so anxious to have a Free Trade Agreement (sic.) with the United States that our great ally knew it would not have to give much away.

As for the process by which this momentous change is to be brought about, it is so extraordinary that you couldn’t make it up. 

Julia Gillard is the Prime Minister of Australia.  As such, she leads the Executive Government, sets the Cabinet agenda and chairs, leads and controls its deliberations.  She has commenced the process of changing Australian uranium export policy by announcing to the Australian public, and then telling the Prime Minister of India face to face, not that Cabinet, after due consideration, has made a decision on this matter, but that she has decided to go to her party’s forthcoming national conference and seek a change in the party’s platform.  

This approach apparently sets aside the requirement to consult colleagues or seek advice from officials beyond her own immediate circle.  It has become a matter of public record that she did not consult the Foreign Minister, the Minister principally responsible for Australian nuclear safeguards policy, indeed all matters relating to non-proliferation, arms control and disarmament.  She is quoted in the 20 November edition of The Sunday Age (see here) as defending her decision not to consult the Foreign Minister on the basis that “It’s a leader’s decision, and I made it”.

Surely the more appropriate sequence would have been to have the Cabinet discussion first, and make a fully informed decision as to whether or not a change in the policy is desirable, and what its ramifications are, then take the matter to the party if needs be, armed with the support of a properly considered Cabinet decision.

When it suits her, the Prime Minister ignores the party platform – vide her steadfast refusal to contemplate abandoning the “Malaysia Solution” and implementing that part of the platform which commits the party to onshore processing of asylum seekers.  And when it suits her, she invokes the Departmental “experts” as the last word in authoritative policy-making (same issue – the “Malaysia Solution).

So why the rush to judgement on this one, why the need to change the platform before the due process of governmental deliberations has taken place, and once she has made an exception for India, what is she going to say to our allies in Pakistan and her dear friends in Israel?

Note: This item was first posted on the ABC’s The Drum website on 21 November 2011. Access it and 136 comments here).

Bio note: As Deputy Secretary in the Department of Trade and Resources in the late 1970s I was directly involved in the Fraser Government’s consideration of the recommendations of the Ranger Uranium Environmental Inquiry, and in the negotiation of several bilateral safeguards agreements.

18 November 2011

What should we make of Iran's nuclear program?

The Iranian nuclear program is back in the news, with the media publishing a restricted report to his Board of Governors by the Director-General of the UN’s International Atomic Energy Agency, on the subject of the implementation of the Nuclear Non-Proliferation Treaty (NPT) Safeguards Agreement with Iran, and the compliance of that country with relevant UN Security Council resolutions (see full report here).

As predictably as death and taxes the news has been accompanied by Israel indicating that it is considering a pre-emptive military strike on Iran’s nuclear facilities, and demands from the United States for tighter sanctions.

This report has received more than usual attention on this occasion because the IAEA has crossed a kind of nuclear threshold of its own, coming explicitly to the conclusion, for the first time that I am aware of, that there are aspects of the Iranian program that are only relevant to the development of a nuclear explosive device, and stating in its concluding summary:

53.     The Agency has serious concerns regarding possible military dimensions to Iran’s nuclear programme.  After assessing carefully and critically the extensive information available to it, the Agency finds the information to be, overall, credible.  The information indicates that Iran has carried out activities relevant to the development of a nuclear explosive device. The information also indicates that prior to the end of 2003, these activities took place under a structured program, and that some activities may be still ongoing

Decoding that paragraph just a little, the IAEA feels it has a good picture of a structured program relevant to the development of a nuclear weapons capability prior to the end of 2003, but is not sure what the Iranians are up to now.  This does not tell us much that is new. A 2007 US National Intelligence Estimate stated (see here) as the first of its “Key Judgements”:

We judge with high confidence that in fall 2003, Tehran halted its nuclear weapons program; we also assess with moderate-to-high confidence that Tehran at a minimum is keeping open the option to develop nuclear weapons.

The incoming Obama Administration was briefed in similar vein by US intelligence agencies in 2009.

This leaves us with many questions to be addressed. Does Iran have a “legitimate” reason for a nuclear electricity program, and if it does, why is it so insistent on developing its own enrichment capability and facilities?  Why does it have undeclared sites that come to light from time to time, and why are so many of these facilities, ostensibly for peaceful purposes, buried deep underground?  Is Iran developing a bomb, and if so, how worried should we be, and should we try to do something about it?

Many have for a long time drawn dark conclusions from Iranian insistence on having the full suite of nuclear fuel cycle capabilities in-country.  This insistence is in fact of little evidentiary value concerning the peacefulness or otherwise of Iran’s nuclear intentions, because Iran’s experience in this field would provide adequate justification for full independence for a purely civil program – which independence is the treaty right of all members of the NPT.

The history of the Iranian nuclear program dates back to the days of the Shah.  In 1978 I was involved in negotiating a nuclear safeguards agreement to cover the intended supply of Australian uranium, visited Tehran, and was given a site tour of the power station which had been under construction at Bushehr since 1975 by the German company Kraftwerk Union AG – the same plant that was finally completed by the Russians and began feeding power into the Iranian grid in September of this year (not much sense of urgency there!).  The Shah saw a nuclear power program as an alternative to burning the nation’s valuable petroleum resources, a sign that Iran was at the first rank of technological capability and hence a source of international prestige, and in all probability, the source of a nuclear weapons option – all views that in time came to be adopted by his Islamic Revolutionary successors.

In light of its historical experiences Iran’s attitude to any proposal for dealing with its emerging nuclear technological capability will be governed by three headline considerations:

(1)  Iran will not agree to any proposal which accords to it a status that is inferior to that of other nations. As is the case with China, Iran regards itself as the heir to one of the world’s great civilisations, and is a country which was very much put upon by the West at a time when it was militarily weak. Over the last century or so it has known foreign military occupation (Britain and Russia), resource theft (the Anglo-Iranian Oil Company, now known as BP), intervention in its internal affairs (the 1953 overthrow by the CIA of the Mossadeq government), military invasion (Iraq, assisted in a variety of ways by the United States), and of course economic and financial sanctions (ongoing). Accordingly, it will not settle for any arrangement which it regards as humiliating, even if there are costs in rejecting what might look like an attractive deal.

(2)  Iran lives under the constant threat of attack by Israel and will not do anything to limit the development of its military response options. I believe for a variety of reasons that Iran has not yet made a decision to move to a military nuclear capability, and is unlikely to do so if it feels it can avoid it, but the ambiguity about the extent of its nuclear capability is part of its deterrence strategy.

(3)  Iran has absolutely no reason to trust the West on this matter. In 1974, during the Shah’s time, Iran lent $US 1 billion to the French Atomic Energy Commission (CEA) to build its Eurodif enrichment facility, and acquired a 10 per cent indirect interest in Eurodif through the Franco-Iranian company Sofidif – a stake that still exists. Iran paid another $180 million for future enrichment services to fuel its nuclear power plants. 

After the 1979 Islamic Revolution, the Khomeini regime cancelled the Shah’s nuclear program and sought refund of this investment. There followed a decade of bitter litigation, as a result of which Iran was reimbursed a total of $1.6 billion for its 1974 loan plus interest. It remains an indirect shareholder in Sofidif, but under the 1991 agreement which settled the litigation it has no access to technology and no right to take enriched uranium. It has the shareholder’s right to dividends, but financial sanctions against Iran mean that it cannot even receive these dividends.

Iran also has a 15% stake in the Rössing uranium mine in Namibia, the world’s third largest uranium mine, of which the main other owners are Rio Tinto (68%) and the Government of Namibia (10%).  There are two Iranian Directors, Messrs S.N. Ashrafizade and A.V. Kalantari, but Iran does not have contracts for the purchase of uranium. It is ironic that a company partly owned by Iran, and which sells uranium to the United States, cannot sell uranium to Iran.

So a country which has for thirty years had a stake in one of the world’s largest uranium mines and in a uranium enrichment plant, but has seen those stakes effectively frozen all that time, is being asked to believe that it can “trust us” to look after its civil nuclear power needs. Iranian President Mahmoud Ahmadinejad has referred explicitly to this situation in various public comments.

The development of nuclear weapons capability by Iran or any other country can hardly be viewed as a positive development, but it is not an occasion for the international hysteria that Israel and its US partisans constantly attempt to drum up.  Since the early 1990s, when Israel started to run out of the sorts of threats that would enable it to engage Washington’s attention in a convincing manner, we have been hearing about how Iran is an ‘existential threat’ to Israel.  

There are two elements to this preposterous claim:

- An Iranian nuclear weapons capability is just around the corner, perhaps only months away

- Iran is run by mad mullahs, irrational and unpredictable people who could do anything, and who therefore could not be entrusted with nuclear weapons.

Regarding the first element, in 1992 Benyamin Netanyahu told the Knesset that Iran was 3-5 years away from being able to produce a nuclear weapon, and on the other side of the political fence, Shimon Peres told French TV that Iran would have nuclear warheads by 1999.  The Christian Science Monitor recently published a timeline of the “breathless predictions that the Islamic Republic will soon be at the brink of nuclear capability” going back to 1979.  The fact that Iran has been “on the brink” of a nuclear capability for almost two decades speaks to the credibility of that argument. 

As for the notion that Iran is run by “mad mullahs”, the fact is that the Iranian leadership has been quite rational and cautious in the conduct of its foreign and military policies, and can be expected to continue to be so. 

On the subject of the supposed “existential threat”, no less an authority than Israeli Defence Minister Ehud Barak has said

I am not among those who believe Iran is an existential issue for Israel. Israel is strong, I don't see anyone who could pose an existential threat.

Before he left office in 2008, former Prime Minister Ehud Olmert said:

Part of our megalomania and our loss of proportion is the things that are said here about Iran. We are a country that has lost a sense of proportion about itself.

Whether anything should be done about Iran’s nuclear activities, that is partly a function of how serious the threat is, and partly a function of what the options are.  There are only two options for direct action: sanctions and air strikes against the Iranian nuclear facilities.

While restrictions on sale of relevant equipment and technologies make some sense, US Secretary of State Hillary Clinton has something else in mind: the “crippling sanctions” that she calls for from time to time. 
This is a seriously dumb idea, for too many reasons to enumerate here, but here are some of the main ones:

- It is highly unlikely that the United States will get sufficient support for such sanctions to gain agreement to their imposition.

- Even if sanctions are agreed, they will be almost impossible to enforce – Iran has land borders with too many countries, plus coastlines on the Gulf, the Arabian Sea and the Caspian Sea. It is altogether too porous.

- Enforcing sanctions would almost certainly require patrolling of Iran’s offshore waters, with a high risk of confrontation and military escalation.

- The sanctions regime would cause all kinds of grief for the oil companies that need to do business in Iran in order to supply the West with crude oil.

- Iran demonstrated during the Iran-Iraq war an immense capacity to endure suffering. It is unlikely to buckle under any sort of sanctions regime that the West would be prepared to establish.

- Also, this is a society that is proud of its long history and possessed of great self-respect – the sort of self-respect that led Britain to resolve to fight on in the dark days after Dunkirk; in its own mind there was no alternative, no real question to be addressed. Iran will not buckle under external economic pressure.

- As explained in my 2009 blog piece Choke point: the Strait of Hormuz, Iran has the option of retaliating by closing the Strait of Hormuz. The United States would have to respond, and the ensuing confrontation would pose a high risk of spiralling out of control.

Aside from all of the above, there is the morality of imposing “crippling sanctions” against anyone. As the sanctions against Saddam Hussein’s regime demonstrated, general economic sanctions (as distinct from export controls on particular items of military significance) hit hardest the most vulnerable in society – infants, young children, the ill and the elderly. They do so by reducing access to electricity, clean water, safe food, emergency transport, spare parts for imported equipment upon which life or safety depend. Iran’s very poor air safety record is in part a product of the unavailability of aircraft spares under the existing sanctions. If the proposed “crippling sanctions” are introduced, the scarce available supplies of liquid fuels will be reserved for what the regime considers to be their highest and best use – the uses of the regime itself and of the Iranian military. For everyone else, life will be just that much tougher. In a country of 66 million, a 1% impact on whether any given person will live or die in the next twelve months amounts, across the population as a whole, to 660,000 avoidable deaths per annum. Sanctions are not a peaceful or low-harm way of going to war.

As for the pre-emptive strike option, that is dumber still.  Iran has nuclear facilities scattered across a country the size of Queensland, some of them deep underground and/or defended by Russian surface to air missiles.  Mounting the necessary air raids would be a stretch for the Israeli Air Force, and afterwards the IAF could never be sure whether the known facilities had been destroyed or whether there were alternative unknown facilities that had not even been attacked.  And anyone who thinks that the only possible consequence of an Israeli attack on Iran would be retaliation by Hezbollah from the Lebanon is dreaming.

There are some things in life that one just has to learn to live with, and I think an Iranian nuclear capability, if Iran chooses to go that way, is one of them.

Note: This item was first posted on the ABC’s The Drum website on 14 November 2011. Access it and 298 comments here).

09 November 2011

Are KPIs appropriate to the public service?

An article in the 25 October 2011 edition of The Age (see Ombudsman blasts child protection) cites a “scathing” recent Victorian Ombudsman’s report as saying that managers in Victoria's child protection system failed to investigate reports of children at risk so they could meet numerical targets.

Acting Victorian Ombudsman John Taylor said his investigations into the Department of Human Services child protection program in the Loddon Mallee region revealed serious and significant failures to provide safety and wellbeing to the state's most vulnerable children.

In his report tabled in the Victorian Parliament on 25 October Taylor said the failures were caused by deliberate policy decisions of certain managers to reduce the number of child protection reports investigated:

I consider the failure to investigate these reports to be a consequence of an intentional policy decision by the Bendigo office of the Loddon Mallee Region of the department to reduce the number of child protection reports that it investigates.

Despite receiving more reports in 2010-11 than the previous year, the region conducted less than three quarters of the number of investigations.

I believe a practice has developed where the drive to meet numerical targets has overshadowed the interest of children despite evidence that they may be at risk.

The managers deny this, however, I consider that the evidence speaks for itself.

It is not the first time – indeed, the article says that it is the fourth Ombudsman's report in two years raising serious concerns about the performance of Victoria's child protection system. Almost two years ago we saw Child protection workers fudging figures: report in the 26 November 2009 edition of The Age, which begins:

A scathing Ombudsman's report has identified gross deficiencies in Victoria's child protection service, with workers manipulating figures to cover up children neglected by the system.

This report was never released to the public but the then Brumby Government’s Community Services Minister Lisa Neville said that each of the Ombudsman’s 42 recommendations would be implemented. If they were, not much seems to have changed.

At a superficial level reports like this raise the question of what is wrong with the relevant agency, but at a deeper, more fundamental level they raise the question of whether the importation into public service of business practices like giving agencies and individual officers numerical targets (“Key Performance Indicators” – KPIs) is appropriate to the public policy and service delivery purposes for which public sector agencies are created.

Key Performance Indicators are a product of the business maxim, “What gets measured gets done”, which in itself is a warning to those responsible for leading our public sector agencies, for the corollary is that what doesn’t get measured doesn’t get done. KPIs tell staff in no uncertain terms that when it comes to the crunch, certain things matter and nothing else does.  Messages like that are barely appropriate in business. They have no place in the public sector.

KPIs work best when the required results are simple and easy to specify. It is easy to set KPIs for the distributor of a standardised manufactured retail item like, say, soft drinks or breakfast cereal, which might specify for example that the goods must be delivered to a retailer within a specified time of the order being placed, that the consignments must be accurately made up, that there must be no breakages or spillages, and perhaps that the quantity or value of goods sold in a particular distribution zone should increase by a certain percentage over the previous year.

The Soviet Union discovered a long time ago that even in as standardised a process as the manufacture of everyday items, the specification of required outputs requires great care. If you tell a manager to produce two tonnes of nails you will get two tonnes of 6 inch nails because they are easier to produce.  If you tell them to produce 10,000 nails you will get 10,000 panel pins, because they will require less metal.

When it comes to the delivery of complex services, these Victorian Ombudsman’s reports scream out the message that KPIs break down completely. They are simply inappropriate to measuring the performance of complex tasks.  What should be a high resolution colour photograph of a complex job, with all its nuances and subtleties, gets reduced to six or eight data points.

KPIs are also an open invitation to game the system.  Tell a manager that what is required for performance pay or for promotion is to meet certain numerical targets and they will be met, by a combination of concentrating on the easier cases and fudging the figures. There is money and position at stake, and people will duck, weave, dissemble and tell outright lies in order to establish that they have met their KPIs.  “Follow the money trail” is as reliable a guide to human behaviour here as elsewhere.

The result is that in an environment infected by KPIs managers at every level will have less knowledge of what is really going on than they otherwise would, and that in itself compromises organisational effectiveness.

To understand what is required to manage and measure performance in a large hierarchical organisation it is necessary to recognise three key principles.

The first is that a “manager” is by definition a person who is accountable for the performance of others. In the course of delivering on that accountability managers at every level are responsible for advising people of their duties and giving them the authority to act, ensuring that they receive adequate training to carry out their responsibilities, coaching them in the finer points, deciding what needs to be done and what doesn’t, allocating tasks to people who are equipped to carry them out, and allocating the necessary resources.

Recognise that central hierarchical accountability point and you are well on the way to understanding how a public service department in a Westminster system (and indeed any well run large organisation) is meant to work. The Department Secretary is accountable to the Minister for the performance of the Department as a whole. In turn, the Division Heads are accountable to the Secretary for the performance of their Divisions, the Branch Heads are accountable to the Division Heads for the performance of their Branches and so on. In a very real sense only the individuals at each level and their immediate supervisors have a full understanding of what the work in their local workplace is: what the current and emerging issues are, the workload pressures, how easy or difficult the people with whom they must interact are, and the priorities determined in the light of guidance from above.

There is not space to develop this line of thinking fully here, but what emerges from it is that the only KPI that has any meaning is that individuals at each level, whether they be managers or front-line staff, perform to the satisfaction of their immediate supervisor.  Supervisors being by definition responsible and accountable for the work of everyone below them, it matters not to people further up the line how the work gets done or who does it; what matters is whether it gets done, and to what quality.

The second is that performance at any level – the performance of managers and the performance of individuals – can only reasonably be measured in the light of the resources made available, a fact which is notoriously lost from sight when meeting KPIs is the order of the day.  It is not under-performance for an individual to be unable to carry out a task, or a series of tasks, or a volume of tasks, for which they have not been given the necessary resources, the necessary guidance or the necessary training. The November 2009 Ombudsman’s Report blamed lack of resources for poor service quality and said the failures it reported were not a reflection on the staff.  Child Safety Commissioner Bernie Geary said that the report reflected an overwhelmed department where beleaguered workers were often vilified for shortfalls in the system.  No doubt they are both correct. Governments are notorious for under-resourcing functions that they see as necessary but politically unglamorous, and then blaming the hapless staff and/or senior management when things go wrong.

The third essential principle is that senior people in any large organisation are paid to make judgements, and the performance of staff is quintessentially a matter for judgement, not something that can be reduced to a series of numbers that would enable a chimpanzee to assess performance.  Priorities change, resources that were meant to be available are delayed or unavailable, things beyond the control of the individual go wrong, other matters intervene.  Only someone in a position to observe closely – the immediate supervisor – can make a fully informed judgement about the performance of a subordinate unit or an individual, and making those judgements is a key part of their job.

Consequent upon this, another key responsibility of organisational leadership is to speak truth to power – to advise people up the command chain what resources are required in order to carry out the unit’s functions to an acceptable standard, and not allow themselves to be fobbed off with bromides about having to learn “to do more with less”.  Everyone should be striving to improve their personal effectiveness and that of their organisations, but there are limits to what any one human being can do.

So I say it is time to throw the whole silly business of public sector KPIs overboard. Statistics can inform management decisions but should not be allowed to substitute for them.  It is time to get back to the holding our politicians accountable for providing their agencies with the resources they need to carry out what is expected of them, for appointing mangers who have the skills and the authority to lead the organisation and ensure that it delivers, and holding those authorised managers accountable for their performance.

In conclusion it is worth noting that, aside from the business of giving everyone Stakhanovite KPIs, I fear we have learned another bad habit from the deservedly defunct Soviet Union – the selective enforcement of requirements, to the disadvantage of those who are out of favour.  When the Soviet Union began to become sensitive to international criticism of its nasty habit of locking up dissidents, it for the most part ceased locking them up for their dissident behaviour but pinged them for the sorts of economic sins that were endemic, part of making life tolerable in the centrally planned economy – crimes like acquiring a bit of foreign currency to buy small consumer items like jeans and Beatles records, or paying someone to give you their place on the waiting list for a fridge, a television set or a car. There were no political prisoners anymore, only people who had violated the foreign currency or other economic regulations.

KPIs are a marvellous vehicle for selective enforcement, a marvellous cover for favouritism or covert discrimination.  It is so easy to be understanding about all the extenuating circumstances that explain why the chosen ones didn’t meet their KPIs, but the advancement of those who are not favoured is easily explained – “they didn’t meet their KPIs”.

If you disagree with the above analysis, ask yourself whether you think that a quarter of a century of managerialism in our public sector has improved the quality of policy making or service delivery.  I do not think so.

Note:  A slightly shorter version of this piece was posted on the ABC’s The Drum on 3 November 2011 (see here).