Chapter 5. Australia’s delivery modalities and partnerships

Partnering

Peer review indicator: The member has effective partnerships in support of development goals with a range of actors, recognising the different and complementary roles of all actors.

Australia has a broad range of partnerships that are well tailored to work in specific contexts. Australia is a strong supporter of multilateral organisations and funds a number of global and regional initiatives, but it could further enhance its approach by better linking these with its bilateral aid programmes. As part of its economic diplomacy agenda, Australia is increasing its emphasis on partnering with the private sector as well as continuing its work with traditional partners and civil society organisations.

Australia’s 2014 aid policy guides DFAT’s approach to partnerships

The 2014 Australian aid policy outlines DFAT’s approach to partnership and engagement (DFAT, 2014a). It commits Australia to work with the most effective partners who are best positioned to achieve results in a given context and to achieve value for money for Australian taxpayers. In practice, there is often a focus on working with trusted implementing partners including international organisations, regional partners, multilateral development banks and Australian NGOs. The 2014 aid policy places more emphasis on innovative partnerships than the previous policy. It also requires that all new investments consider private sector approaches and partnerships.

Australia provides strong support for multilateral organisations but has an inconsistent approach to managing multilateral partnerships

While Australia no longer has a specific multilateral policy, it has increased funding for multilateral organisations (Chapter 3) and has continued its focus on influencing multilateral partners to increase their presence in the Pacific. Australia uses its leverage to influence multilateral agendas and has championed the reform of some of its multilateral partners. Australia has multi-year strategic partnership agreements with multilateral organisations. These include indications of longer-term funding and mutual expectations, thereby helping to improve predictability. DFAT’s partnership agreements, such as its agreement with the Asian Development Bank, include improving donor co-ordination, supporting aid effectiveness and a commitment to assess partnership frameworks prior to their re-establishment. DFAT’s inclusion of these issues in its partnership agreements represents good practice.

Core contributions to multilaterals are typically multi-year and managed by DFAT policy divisions. Non-core funding is generally managed by geographic areas, sectors, or country or regional programmes. A 2015 evaluation of DFAT multilateral aid noted that the lack of a fixed model for the division of responsibilities in the management of multilateral partnerships leads to inconsistencies (ODE, 2015a). The inconsistencies also are related to the DFAT staff’s uneven level of experience in managing these partnerships (ibid.).

DFAT has increased its focus on the private sector

DFAT’s partnerships with the private sector are guided by the 2015 ministerial statement, “Creating shared value through partnerships” (DFAT, 2015b). The statement defines Australia’s concept of shared value, where businesses help to achieve social progress and economic growth in developing countries while also making commercial revenue. In this regard, DFAT aims to provide catalytic investment and use its position as convener, knowledge broker and influencer to attract investments and create enabling conditions for business in partner countries.1

DFAT’s modalities for its partnerships with the private sector are described in its 2015 strategy for aid investments in private sector development (DFAT, 2015c). These modalities are underpinned by the core principles of complementary priorities, adding value, return on investment, openness and transparency, and commitment to responsible business.2 Further, DFAT policy distinguishes between collaborating with private sector actors and partnering, and contains specific information on the roles of DFAT and private sector actors. It also provides output and impact level indicators to monitor the effectiveness of these initiatives (DFAT, 2015b).

Taken together, these are promising approaches to engaging with the private sector and are in line with good practice (OECD, 2016). But success will depend on DFAT’s ability to operationalise the principles consistently across the programme and to clearly demonstrate the development returns of partnering with the private sector.

In 2015, 100% of Australia’s bilateral ODA was untied, an increase over 2014 when 89% of bilateral ODA was untied. However, as the OECD (2017b) notes in a report on its untying recommendation, a large share of Australian aid contracts go to suppliers within Australia. This suggests that Australia could increase efforts to involve other contractors in competitive bidding for contracts.

Australia supports several regional partnerships but could better link regional and global initiatives to bilateral support

In the Pacific, Australia supports the leading regional organisation the Pacific Islands Forum. It also supports other regional organisations, including the Pacific Community, the University of the South Pacific and the Pacific Regional Environment Programme. Recently, DFAT has made efforts to consolidate its Pacific regional programme, reducing the overall number of investments while increasing core funding and multi-year commitments. DFAT’s Southeast Asia regional strategy underscores its long history of working with regional partners. Among these is the Association of Southeast Asian Nations, with which DFAT has a strategic partnership agreement and joint plan of action (DFAT, 2016b).

Nevertheless, while Australia tends to have a strong relationship with its Pacific regional partners and has established formal consultation processes, these consultations sometimes fall short of their potential. For example, an evaluation of DFAT’s partnership with the Pacific Community found that both parties expressed “a desire for more strategic discussions” (ODE, 2016). DFAT has the opportunity to deepen its partnerships by focusing on more strategic issues, further leveraging its strong investment and presence in regional fora.

Aid Investment Plans (AIPs) recognise the need for global and regional investments to be coherent and complementary to bilateral programmes. But AIPs generally are not specific about how this is to be achieved. The Pacific Regional AIP notes that financial reporting and performance assessments at country level are expected to contribute to alignment, but it does not elaborate further on how the programme expects to achieve synergies among global, regional and bilateral investments. In Solomon Islands, global and regional programmes were not clearly seeking synergies with country programmes and country counterparts were not widely informed about regional, thematic or global initiatives or involved in shaping those initiatives. In general, DFAT could forge stronger linkages between regional and bilateral programmes. This would further encourage local ownership at country level and would ensure that local partners are appropriately involved in DFAT regional and global initiatives.

Australia is a valued supporter of Australian and other non-governmental organisations, but could engage more fully with local civil society partners

Australia has traditionally been a strong supporter of civil society organisations. However, Australian aid to and through civil society organisations has decreased since 2014, both in volume and as a share of bilateral ODA (Chapter 3). DFAT’s engagement with non-governmental organisations (NGOs) is guided by the Effective Development Partners framework (DFAT, 2015a). This framework notes that DFAT considers Australian NGOs to be part of public diplomacy. It also acknowledges the help NGOs can provide through their strong connections to local communities and because many are working in areas where “others don’t or can’t reach, such as in remote, fragile and conflict affected areas,” as is the case with many of DFAT’s humanitarian partners. The framework also emphasises DFAT’s aim to work with NGOs for “multi-stakeholder approaches to development” (DFAT, 2015a).

The largest programme is the Australian NGO Co-operation Program (ANCP), an annual grants programme that provides matched funds to accredited Australian NGOs working in a large variety of developing contexts. It is also DFAT’s longest-running programme representing about one-fifth of all the funding provided by DFAT to NGOs (equal to 2.7% of Australia’s annual ODA budget); and is widely considered to be successful (ODE 2015b). ANCP provides predictable annual funding that is also flexible (ODE 2015b).

While DFAT funds a number of Australian NGOs and programmes implemented in conjunction with local NGOs, there appears to be less emphasis on direct support for local civil society (USD 2 million in 2016, or AUD 2.7 million). This can be partially explained by the closure of funding windows for local NGOs outside of the Indo Pacific region. There may, however, be situations where providing more direct support to local civil society groups could help enhance DFAT’s efforts to promote good governance, democratic reforms and accountability. This was observed, for example, in Solomon Islands. DFAT has worked closely with a number of local civil society groups in the area of gender equality including for service provision and advocacy. These experiences could be replicated in other parts of DFAT’s portfolio.

Country-level engagement

Peer review indicator: The member’s engagement in partner countries is consistent with its domestic and international commitments, including those specific to fragile states

Australia’s engagement in partner countries is guided by clear principles and frameworks for mutual accountability. Australia takes a case-by-case approach to use of country systems and continues budget support in some contexts, using performance payments and budgetary assistance to incentivise reforms. Australia has good tools and partnerships for fragile contexts. But, as is the case with most members, it could focus more on thinking and working politically and developing a more whole-of-society approach.

Australia tailors its aid to context and has increased predictability by ensuring multi-year planning

Australia makes a strong case for its role in promoting regional health, economic prosperity, security and labour mobility and the tailoring of its aid to regional and national contexts. Each country programme has a set of objectives, delivery modalities and expected performance results that are outlined in the country Aid Investment Plans. These plans generally cover a four-year period. Indicative spending by country programme is published in the Australian Aid Budget Summary with two-year forward estimates (Chapter 3). The country plans are complemented by country-level partnership agreements between DFAT and its partner countries in the Pacific. Country partnership agreements contain a set of expected mutual obligations, with a clear focus on expected results. The impressive clarity of these documents provides a strong framework for mutual accountability and potentially helps improve alignment with country-level results frameworks.

The introduction of Aid Investment Plans has helped ensure multi-year planning and increased the medium-term predictability of Australian aid, as was recommended in the last peer review. These improvements are also reflected in the 2016 Global Partnership for Effective Development Co-operation monitoring data (Figure 5.1).

Australia could give more attention to the policy aspirations of its partner countries in the articulation of regional and country strategy documents, however. While Aid Investment Plans “must be informed by consultation, they are not formally negotiated with or endorsed by partner government” (DFAT, 2017a). It is important that Australia focus its efforts on supporting regional and partner country initiatives, rather than substituting for lack of capacity. Building partner capacities, including partners’ ability to manage their own security and governance challenges, requires Australia to take a supporting role, which means accepting a pragmatic approach to longer-term development. Much to its credit, DFAT recognises the possible trade-offs this requires and aims to ensure that Australia remains the partner of choice in the Indo-Pacific region.

Australia aims to uphold its international commitments, including Busan, and has made improvements

Australia supports the Global Partnership for Effective Development Co-operation (GPEDC) and has supported partner countries in the Indo-Pacific region to improve the quality of data reported in GPEDC monitoring.

Australia aims to uphold its international commitments such as the Busan Partnership commitments. Australia generally makes decisions regarding the use of country systems on a case-by-case basis, considering context and the robustness of country systems before deciding on the most appropriate modalities of assistance. DFAT undertakes assessments of existing country systems and aims to build capacity in contexts in which these systems are weak. For example, DFAT has worked with the World Bank, the Asian Development Bank, New Zealand and the European Union to pool funding to support economic and public financial management reforms by Pacific island governments.

The 2016 GPEDC monitoring report, which measured development partners’ use of country systems, found that Australia improved to 32.8% in 2015 from 23.5% in 2010 (OECD/UNDP, 2016). However, its use of country systems remains lower than the average for partners, 50.1% in 2015 (Figure 5.1).

Positively, Australia continues to use sector budget support with clear evidence of success and aims to provide ODA that is on plan, on budget and on system in some partner countries, including Solomon Islands – an approach that is consistent with Australia’s objective of building sustainable institutions. Australia’s partnership agreement and sectoral budget support programmes in Solomon Islands contain performance-based criteria that are to be met by the partner country, with the aim of incentivising reform (Annex C).

In some instances, Australia uses technical assistance to strengthen the capacity of partners’ financial management systems and to better ensure oversight of aid channelled through country systems. DFAT acknowledges that the use of country systems as the default option is limited by risks related to the misappropriation of funds and potential negative consequences for achieving development results (Australian National Audit Office, 2015). While this is a pragmatic approach in the interests of sustainability, Australia will need to ensure that it pursues longer-term efforts to build the appropriate capacities in country.

Australia has improved its use of country-led results frameworks. The GPEDC monitoring report found that the vast majority (84.1%) of new interventions were aligned to national priorities and country-led results frameworks. Its 67.5% of new interventions that plan a final evaluation was however below the total of 76.6% for all partners reporting (OECD/UNDP, 2016).

Figure 5.1. Australia’s progress on key development effectiveness indicators
picture

Source: OECD (2017a) The Development Co-operation Report 2017, http://dx.doi.org/10.1787/888933482979.

DFAT tailors its approach to work in fragile contexts and has a good mix of programming tools, but could better address underlying conflict drivers

Within DFAT, particular attention is paid to effectiveness and risk in fragile contexts. In Solomon Islands, the peer review team noted a number of good practice examples (Box 5.1). These included:

  • A strong focus on security, one of the peacebuilding and statebuilding goals,3 in the initial Regional Assistance Mission to Solomon Islands (RAMSI) intervention and continuing emphasis on security, especially crime prevention and domestic violence, even after the RASMI drawdown

  • Consistent and long-term use of country systems across government, making Australia one of the few DAC donors to be systematically using country systems in fragile contexts

  • A post-RAMSI programme that was informed by a rich contextual and political economy analysis

  • Ongoing risk analysis and management ingrained into every facet of the programme cycle, with accompanying flexibility to adapt programmes where required.

Australia also takes a pragmatic, context-specific and whole-of-government approach to peacebuilding. Australian government representatives report that programmes in fragile contexts differ, are tailored to the particular situation, often take a long-term approach, and where possible address the root causes of crises and shocks.

In Solomon Islands, Australia could strengthen its focus on thinking and working politically. It also could help forge a common political voice with other donors, international organisations and civil society to deliver difficult messages and push for action on the root causes of conflict such as land reform, logging and corruption (Annex C). Involving fragility policy expertise in programme design and monitoring could help to consistently apply these types of fragility lenses to programming and ensure lessons are captured. A range of tools are used in fragile contexts. Bilateral programming is the preferred modality in fragile Pacific Island contexts, where Australia is often the largest actor. Other options are used where Australia’s investments are relatively less dominant. These include multi-donor trust funds, which were used, for example, in Afghanistan. Where Australia cannot be involved for political reasons, including in the past in Myanmar, it engages primarily through multilateral organisations. This differentiation of instruments is good practice.

Box 5.1. Operation Helpem Fren – the Regional Assistance Mission to Solomon Islands (RAMSI)

After five years of ethnic tensions and a coup in 2000, Solomon Islands was experiencing a breakdown of law and order, intimidation of officials and private citizens, the flight of investors from the country, and unfettered corruption. The government and its institutions had ceased to function effectively. Public finances were in ruin and many basic services such as health and education were not being delivered to the people. At the request of the Solomon Islands government and with the endorsement of the Pacific Islands Forum, the Regional Assistance Mission to Solomon Islands (RAMSI) was formed to help lay the foundations for long-term stability and prosperity in the country. It began operations in 2003 and was ended in June 2017. There is now overwhelming agreement that the mission has achieved its stability objectives, although a number of difficult challenges remain. Every stability and peacebuilding mission faces a unique set of circumstances. Nevertheless, some of RAMSI’s lessons could be useful for other bilateral and regional stabilisation missions.

Factors that enabled the success of RAMSI include:

  • It was welcomed by the host government and established a mandate based on a realistic assessment of achievable outcomes under a clear legal framework.

  • Regional actors endorsed and helped design its mission. It designed its mission, with all key agencies and nations involved jointly in the pre-planning, implementation and reporting.

  • It adopted an approach designed to provide the government and people the space to address the underlying causes of conflict on their own, rather than giving that task to the mission

  • It fielded an initial, large deployment and superior firepower to restore law and order, with community policing considered an important component of the stability strategy.

  • It adopted a policy of strategic patience. Following the initial phase there was no push to draw down too quickly or look for an early exit There was also a willingness to push for transformational policies as soon as normalcy returned. For instance, over this period, 50% of new police recruits were women in order to help promote women’s empowerment.

In addition, RAMSI placed technical advisors directly in key government roles (Australia refers to these as “in line” positions) to protect civil servants from political interference and to ensure that basic services were re-established as soon as possible. This strategy had several benefits. For example, it allowed RAMSI members to use country systems almost immediately, rapidly restoring confidence and trust in government institutions and allowing investors to return to Solomon Islands. However, the approach also had its shortcomings related to an over-dependence on technical assistance, especially during the transition phase. This suggests that succession planning for technical assistance needs to start early and must include structural and leadership issues, not just a handover to individual civil servants. Moreover, contractors providing technical assistance need to have the right balance of technical and soft skills.

Sources: www.ramsi.org (date accessed: 18 November 2017) and peer review team interviews with key stakeholders in Honiara.

Bibliography

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Notes

← 1. DFAT has supported a number of public-private partnerships including many related to infrastructure investment, such as the Public Private Partnership Center of the Philippines. Australia is increasingly using blended finance models, particularly in its work with multilateral development banks. Blending is generally used in bilateral and regional programmes that use grants and technical assistance to help businesses or projects become investment-ready. Blending is also used with private capital for investment in business growth, and through partnerships, where non-grant instruments (guarantees, equity and debt) are used to leverage commercial investment. (A forthcoming OECD report on blended finance, Making Blended Finance Work for the SDGs, provides more detail.) DFAT has further partnered with the Global Compact Network Australia, which is led by large Australian businesses, universities and non-profits, to promote the role of the private sector in development and in achieving the SDGs. In a similar vein, DFAT supports the Shared Value Project that encourages regional businesses to take a positive role in addressing social problems.

← 2. The DFAT strategy for investing in private sector development contains DFAT’s views on additionality, sustainability, neutrality and safeguards related to work with the private sector. See http://dfat.gov.au/about-us/publications/Documents/strategy-for-australias-investments-in-private-sector-development.pdf.

← 3. The New Deal for Engagement in Fragile States, adopted at the Fourth High-Level Forum on Aid Effectiveness in Busan, Korea, in December 2011, sets out five peacebuilding and state building goals. Security is Goal 2.