WIXLIB

(Seoul), and the United Kingdom (UK) and Europe (London)) are the focus of the StateGovernment’s trade and investment presence overseas. They also include fiveEducation Business Development Managers (in Hanoi, Jakarta, Mumbai, Shanghai andTokyo) to promote WA as a preferred international education destination, and are colocated with TWA in three of the five countries where it has directly engaged staffoverseas (China, Indonesia and India). The offices also manage the four active SisterState agreements (Hyogo Prefecture, Japan; Zhejiang Province, China; East Java,Indonesia; and Andhra Pradesh, India), and can assist State agencies that work, but donot have staff resident, in the respective regions. The Panel sees advantage in colocated arrangements involving the State’s agencies wherever possible to give WA amore coordinated presence and brand in the country concerned.As the Panel began its work, it quickly became apparent that there were problemsacross the Department’s trade and investment attraction system. The criticalalignment between the offices overseas and central office in Perth was not strong andthe information flow in both directions was inadequate. In particular, central officelacked a coordinated governance framework that could guide the system as a wholeand operating arrangements of the offices varied widely as a result. Altogether therewas a lack of clear process and proper accountability across the system.Although the overseas offices are the focus of the Review, their success is highlydependent on their alignment with the Department in Perth and with the State publicsector more generally.Success is also highly dependent on the development of a strong, strategic intelligencebase, with research and planning capability that can provide an in-depth analysis ofmarket potential. The Panel believes that this should be led by the Department butshould draw in expertise outside government, in particular from academia andacademic think-tanks.Allied to this is the need for coordinated advice from a wide range of stakeholdersincluding from State agencies, the relevant Commonwealth departments, businessand academia, building on the linkages with industry that are already underway orbeing planned. Again, as the lead agency for economic development, internationaltrade and investment, and tourism, the Department should play a major role in theimplementation and ongoing support of this work.Coordination between the onshore and offshore elements of the trade andinvestment effort, however, is highly dependent on fit-for-purpose informationsystems, both for information transfer and operational efficiency. The Panel foundthat information communications technology systems across the Department werepoor, impacting on base corporate activities and proper accountability. Connectivitybetween central office in Perth and its offices overseas is particularly deficient and, insome cases, virtually non-existent. While correcting this situation will requireadditional resourcing, the Panel believes that it should be given high priority in viewof its value in enhancing overall operational capability.WESTERN AUSTRALIA’S OVERSEAS TRADE AND INVESTMENT OFFICES REVIEW8

Turning to the operation of the offices in-country, a basic need is to ensure that theregistration of the office is in line with the particular requirements of the regionconcerned, as errors in registration can be damaging to the trade and investmentrelationship as well as possibly incurring financial and other penalties. The Panelidentified a number of potential issues in this area and recommends a careful reviewof the registration of all offices overseas.Secondly, decisions must be made on the best operating model for the offices.Deciding, for example, whether the State stand-alone model or the Austrade statespecialist embedded model is preferred in each location should desirably take intoaccount Government decisions on country and sector priorities as part of a State tradeand investment business plan. These priorities would not only guide decisions on thelocation of offices but on resources to be provided, including taking into accountwhether an emerging market requires more support than one that is fully developed.The employment framework for the Agent General and Commissioners also needsclose attention as the current contracts vary considerably and seem to have beendeveloped on a piecemeal basis. There is currently no overall framework for thelegislative basis on which appointments are made, the classification of the positions,the obligations of the role, whether appointments should be made from Australia oroverseas, the length of tenure, or the suite of employment allowances. Considerationmust also be given to the requirements for the role and an improved basis forperformance assessment.In addition, there is a wide range of employment practices applying to the 41 staff thatare locally engaged in-country. To some extent this results from specific requirementsin some locations and the provisions of local labour laws. It is important, however,that, to the extent possible, the Department set a firm policy both for the futureemployment of locally engaged staff that includes the legal framework governing thebasis of employment, and for the ongoing employment arrangements.Significant effort is currently involved, both overseas and in Perth, in collecting tradeand investment information and integrating the information into reports forgovernment. The Panel came to the conclusion that the process is both unnecessarilyresource intensive and insufficiently useful in providing information for Ministers anddepartments that is sufficiently strategic and accessible. A more efficient and effectivesystem would add significantly to the value of information on overseas developmentsand potential opportunities.In considering the financial management of the offices, the absence of a fit-forpurpose financial management system is immediately apparent. The offices have noability to access the core financial system of the Department and, unless they keeptheir own spreadsheets, must contact central office in Perth for information onexpenditure to date. In addition, the lack of involvement of the Agent General andCommissioners in business planning has been an ongoing bone of contention. Buildinggreater capability in budget control and management in the offices is also critical.Travel systems and processing are another source of angst for the Agent General and9WESTERN AUSTRALIA’S OVERSEAS TRADE AND INVESTMENT OFFICES REVIEW

Commissioners as travel is a key enabler for the role, but the current approval systemsand processes can be lengthy and counterproductive.Strong and consistent governance is an essential element of any well-functioningsystem and the Panel found that basic corporate governance requirements have beenlacking in the Department and, to some extent, in TWA. Policies and plans for themanagement of fraud and corruption, misconduct management, recordkeeping,personal interests and conflict of interest, and gifts, benefits and hospitality all needattention. Not only are policies and plans in these areas fundamental requirements,especially for those working in the public sector, but also they are particularlyimportant for the staff in the offices offshore in view of the distance from Australiaand the highly commercial environment in which they operate. In this context, it isespecially important that the policies of both the Department and TWA are fit-forpurpose for the staff resident overseas and that training is provided in each area.Finally, the Panel has been considering the proper balance between devolved andcentral management of the Department’s overseas offices. It is aware that acombination of devolution and risk management is preferred in some circumstances.It is also conscious, however, that devolution requires a clear framework of policiesand practices that are not only in place but clearly understood and absorbed into theculture, as well as proper accountability and performance management. The DirectorGeneral of the Department has a significant range of corporate governance reformunderway or in planning, some of which touches on issues also identified by the Panel,that will require both time and resources to put in place. The Panel cautions againstmaking significant changes too quickly before these reforms are bedded down.The Panel is aware that some of its recommendations will require additionalresources, particularly at the front end. It believes, however, that itsrecommendations taken as a whole will enable the overseas offices to play asignificantly enhanced role in the successful promotion of the State’s trade andinvestment agenda with flow-on benefits to the economy of WA.WESTERN AUSTRALIA’S OVERSEAS TRADE AND INVESTMENT OFFICES REVIEW10

RECOMMENDATIONSThe Panel recommends that:Achievement Framework6.The Department should give priority to the work that is currently underwayto identify trade and investment objectives and strategies as part of aWestern Australian trade and investment business plan for approval by theGovernment.Trade and Investment Offices7.1In light of the Government’s trade and investment priorities, theDepartment should undertake detailed work to decide priority officelocations and resourcing across the network overseas, avoiding anysignificant expansion or change in focus of the offices until that work iscomplete.7.2While noting the relatively high proportion of resources devoted to theUnited Kingdom and Europe trade and investment office, the Departmentshould defer consideration of the resourcing and staffing of that officepending decisions on the future of the United Kingdom in relation to Europe.Sister-State Relationships8.1The Department, including its relevant offices overseas, should work to giveongoing attention and support to current Sister-State relationships to ensurethat they are achieving maximum value for Western Australia.8.2Future Sister-State Agreements should be entered into only after carefulassessment of their benefits, governance arrangements and resourcing,including by the relevant office overseas which would be involved inimplementing the agreement.International Education9.3.1 The Department’s offices overseas (including the Education BusinessDevelopment Managers) and Tourism Western Australia’s staff offshoreshould work more closely together in promoting the benefits of WesternAustralia in attracting incoming visitors and international students.9.3.2 To take advantage of their on-the-ground knowledge, the relevantCommissioners and the Education Business Development Managers shouldbe drawn into the work currently underway to develop and review theoperational plan to support in-country international education activities.11WESTERN AUSTRALIA’S OVERSEAS TRADE AND INVESTMENT OFFICES REVIEW

Tourism10.2As part of the strategy review being undertaken by Tourism WesternAustralia, consultation should occur with the trade and investment AgentGeneral and Commissioners, both from the perspective of their individualmarkets and on key elements such as international education and businessevents.10.3The Department and Tourism Western Australia should strengthen theircollaboration in promoting the interests of Western Australia overseas,including giving consideration to co-location of offices wherever possible.Other WA Presence Overseas11.5The Department should ensure that all State Government agencies areaware of the role and geographical location of the trade and investmentoffices overseas, and the services and assistance that they may be able toprovide.A Strong Strategic Intelligence Base12.A unit should be set up in the Department to work with stakeholders, bothwithin and outside the public sector, to develop a strong intelligence baseand strategic planning capability to enable in-depth analysis of marketpotential over the forward years.Close Partnership Across Stakeholders13.The Department should provide strong ongoing support for the partnershipsthat are already underway or in the planning phase with industry, publicsector leaders in both Western Australia and the Commonwealth, andacademic think tanks, to advise on the State’s trade and investmentstrategies.The Role of the Department in Coordination14.In working to implement Invest and Trade WA, the Department should payparticular attention to ensuring that there is an effective flow of informationbetween the offices overseas and the work underway in central office, andthat channels are provided to enable participation by the Agent General andCommissioners on proposals relevant to their geographical area ofresponsibility.WESTERN AUSTRALIA’S OVERSEAS TRADE AND INVESTMENT OFFICES REVIEW12

Information Systems15.The Department should give priority to developing a business case foradditional funding to support the provision of improved informationcommunications technology systems that provide connectivity between thecentral Department and the offices overseas, a finance and human resourcessystem, a travel system, and improved records management, as crucial tothe effectiveness of the overseas offices in support of the State’s trade andinvestment agenda.Registration Issues16.1The Department should clearly establish the basis on which each office hasbeen registered, including the legal and regulatory requirements in therelevant country and the local taxation and employment obligations, toensure that registration remains valid and its provisions are being met.16.2The Department should confirm that the required deregistration actionshave been completed for those locations where an overseas office has beenclosed.The Right Model for WA?20.1In considering the model for the operation of the trade and investmentoffices overseas, the Department should consider each on its merits ratherthan deciding on a uniform approach for all offices.20.2If the Government were to decide that the Department should establish anew presence in another location prior to the finalisation of country andsector plans, consideration should be given to using the hub and spokemodel in the interim where a smaller presence is attached to an alreadyestablished office.Characteristics for the Role22.In the selection of future Commissioners, most weight should be given to indepth knowledge of Western Australia’s industry and market opportunities,as well as trade and investment expertise.Legislative Basis of Appointment23.113As a priority, the Department should undertake a major review of contractprovisions for the employment of the Agent General and Commissioners toclarify the current basis of employment and determine the preferredprovisions for future employment.WESTERN AUSTRALIA’S OVERSEAS TRADE AND INVESTMENT OFFICES REVIEW

23.2All future offers of employment to the Agent General and Commissionersshould specify their obligations under the Department’s Code of Conduct,the Western Australian public sector Code of Ethics and other Departmentalpolicies.23.3The Agent General and Commissioners should be considered senior officersfor the purposes of the annual disclosure by the Director General to theParliament.Contract Provisions24.1The Department should undertake a classification review of the positions ofthe Agent General and Commissioners to establish a more objective andconsistent basis for their Western Australian public sector classificatio

The Panel The Overseas Trade and Investment Offices Review Panel PID Public Interest Disclosure PSMA Public Sector Management Act 1994 The Review Western Australia's Overseas Trade and Investment Offices Review SA South Australia SBDC Small Business Development Corporation SLA Service Level Agreement State Records Act State Records Act 2000