Outline of the Serious Dangers in the Commonwealth Government's Current Outsourcing Policy
Roger Clarke

Principal, Xamax Consultancy Pty Ltd, Canberra

Visiting Fellow, Department of Computer Science, Australian National University

Version of 7 July 1997

Prepared in the form of a position statement for privacy lobby generally

© Xamax Consultancy Pty Ltd, 1997

This paper is at http://www.anu.edu.au/people/Roger.Clarke/DV/ClthOutsrcing.html

The Government's policy is that government agency I.T. be outsourced, promptly, with regard only to efficiency considerations, and in some cases without applying the conventional methods to ensure probity.

This embodies serious threats to the public interest.

1. Inappropriateness in Some Circumstances

There is a danger inherent in any blanket policy, that it may be beneficial in some of the contexts in which it is applied, but not in others. In particular, a number of Commonwealth Government agencies are acknowledged world-leaders in their application of I.T. There is a strong likelihood that the single-minded quest for efficiencies will result in significant harm being done to these services' effectiveness, flexibility, and adaptability.

2. Serious Reduction in Privacy Protection

The Commonwealth has, during the last decade, complied with some of the undertakings it gave when it acceded to the OECD Guidelines, in that it has established moderately effective privacy protections in relation to personal data held by (most) Commonwealth government agencies.

However, these protections are removed once the data escapes into the hands of another organisation. Hence privacy is no longer protected, and the effect is that the Commonwealth is withdrawing established protections for its citizens - protections that are enjoyed by the citizens of all other civilised countries.

Extension of privacy protections through contract terms between agencies and service-providers cannot address these problems, because the crucial roles of both individuals and the Privacy Commissioner would be undermined.

Finance Minister Fahey has been quoted in the press as having agreed to widen the Privacy Act protections to cover contractors. But firm proposals, a draft amendment, and a legislative timetable, have yet to be seen.

The position of privacy and consumer advocates is as follows:

• the stance of privacy and consumer advocates is not blanket opposition to the outsourcing of I.T.;
• the stance of privacy and consumer advocates is emphatic opposition to:
  • blanket outsourcing, applied to all agencies and systems, without reference to factors other than efficiency; and
  • outsourcing of systems that involve personal data, without either:
    • general privacy-protection legislation regulating the private sector; or
    • extension of all Privacy Act protections to cover all organisations to which such data and processing are outsourced.

The privacy lobby groups' position on the matter has attracted support from important elements within the private and public sectors, and a considerable amount of attention from a broad cross-section of the media.

The privacy lobby and consumer lobbies have the strength to pursue the matter until a resolution is achieved. Early adjustment is necessary from the Government's present, extreme position to one that balances the various public interests involved.

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Created: 30 May 1997

Last Amended: 7 July 1997

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