Introduction by Croakey: The appointment of one of the Big 4 consultancy firms, KPMG, to run a consultation for the National Health and Climate Strategy has raised concerns, coming at a time of increasing scrutiny of these firms and their work for governments, and amid growing understanding of how the commercial determinants of health can undermine public policy.
These concerns are further heightened by the urgency of climate action amid reports from around the world of climate health impacts, including infectious diseases, heatwaves, smoke pollution, devastating fires and environmental destruction.
In the article below, researchers from The Stretton Institute at the University of Adelaide, Professor Fran Baum and Dr Julia Anaf, argue that “independent frank and fearless public servants in whom the public can have trust” should be charged with running the consultation.
Fran Baum and Julia Anaf write:
We are writing this piece for three reasons. The first is because climate change and ecological collapse are happening fast, and our governments are not living up to the challenge as outlined by the IPCC; and, as the UN General Secretary António Guterres has said, fossil fuel companies are at the heart of the crises we face.
The two other reasons are because KPMG has been contracted to conduct the public consultation for the Government’s National Health and Climate Strategy, and because we have been researching the impacts on outsourcing of government business to the private sector.
On the face of it, there seems to be nothing wrong with a private consulting firm conducting a consultation on our National Health and Climate Change Strategy because presumably the firm is skilled at running such processes and will do it efficiently.
Yet when you think about it, at least two concerns emerge: apparent conflicts of interest and consideration of KPMG’s track record.
Conflicts of interest
It is usual in many settings (board meetings, grant appraisal panels, appointment committees) to declare your conflicts of interests. Our consideration of KPMG’s views on fossil fuels gives us reason to assume that they may be conflicted.
We found that KPMG global head of energy said recently: “The world cannot afford to follow the International Energy Agency’s call for no new oil, gas or coal projects at a time when greater importance is being placed on energy security”.
Further, David Ibels, of KPMG who has consulted to resource companies worldwide, said at a meeting of fossil fuel companies, including Xstrata, Gina Rinehart’s Hancock Coal and Clive Palmer’s Waratah Coal, that the doom and gloom surrounding the industry was misplaced and thought there would be scope for investments for the next thirty years.
He is, of course, saying this at a time when the IPCC and others are warning of the urgent and increasing pressing need to reduce carbon emissions to zero by 2040.
In another 2021 article in Mining Monthly it was said that KPMG “offers the oil and gas and mining industries advice and strategic consultancy across a myriad of areas” and went on to cite their credentials for the fossil fuel sector.
KPMG also audit the books of the ‘peak’ body, the Association of Mining Exploration Companies, which is the leading voice of Australia’s mineral exploration and mining industry”. KPMG is an ‘Associate Member’ with mining companies full members.
In a 2023 document, KPMG Mining Operations, they state “KPMG understands drivers of value in a mining context, operational processes, and how decisions are made at all levels of the organisation, and across the asset lifecycle. We work with clients to ensure the business is set up for success and activity is in alignment to desired business outcomes”.
Of note, the document does not cite the word ‘climate’ at all.
Taken together, it seems there are questions to be asked about the role KPMG will play in development of a national health and climate change strategy.
Will they encourage comment about the need for stronger action on climate change? Will they encourage the necessary reforms to enact the health equity aspects of the strategy? Will they support Aboriginal and Torres Strait peoples’ aspirations when they conflict with one of their fossil fuel clients?
At the very least, their work with the fossil fuel industry should be declared at the start of each consultation session.
Lessons must be learnt from the profoundly disturbing failure of PWC to demonstrate that conflicts of interest within the corporation are managed with integrity.
Let’s look at KPMG’s public record.
In 2022 eight KPMG accountants were formally sanctioned by the auditing industry watchdog after partners and staff were found to have systemically cheated on courses about independence, audit and accounting rules for at least five years until early 2020.
In the UK the company was fined £3.4 million over serious failures in their audit. A related article in The Guardian noted that this was not a one-off failure but was “the latest in a series of scandals suffered by the big four accounting firms, all of which have been fined millions of pounds for audits that later turned out to have significant failings”.
In 2021 it was reported that KPMG are also under investigation for overstating the asset values of now-defunct oil exploration company Miller Energy Resources. In a 2022 case the firm was fined over their auditing of the defunct firm Carillion.
We note this recent article in The Guardian, ‘KPMG Australia launches internal review after potential conflict-of-interest concerns raised’, reporting that the Federal Government has paid KPMG to conduct safety and quality audits of aged care facilities, while a separate division within the firm simultaneously charges providers for advice on audits and accreditation.
The International Policy Digest noted in 2021 that KPMG was found guilty of misconduct and conflicts of interest in a case where they acted in a way that was “diametrically opposed” to those of its client.
Independent journalist Michael West has also investigated related concerns.
Taking all the information above into account, we aren’t comfortable that consultation over an important government strategy to address the very real and increasing threats to the public’s health is left in the hands of a firm with conflicts of interest by virtue of their close links with and work for fossil fuel companies.
We believe a vital consultation about mitigating the impact of climate change on our health needs to be run by independent frank and fearless public servants in whom the public can have trust.
Note from Croakey
We asked KPMG and the Department of Health and Aged Care to respond to the concerns raised above. At the time of publication, KPMG had not responded. Below are the Department’s comments.
1. Is the Department aware of COI concerns about KPMG’s role with this work?
The Department has processes in place for managing conflicts of interest. As a standard part of this process (including in the deed governing the provision of services in the present instance), contractors are required to declare conflicts of interest.
2. What steps has the Department taken to manage COI with this contract and these consultations?
3. Why did the Department contract KPMG to undertake this work?
KPMG has been engaged by the Department of Health and Aged Care to support a national consultation process to inform the development of the Climate and Health Strategy. The work was tendered through the Management Advisory Services Panel and KPMG assessed as the preferred supplier to deliver the services required.
4. Are the Department and KPMG ensuring that all relevant COIs are being declared by participants in these consultations, including by KPMG itself?
As the tweets below highlight, the climate emergency is escalating globally, with devastating health impacts obvious in many countries.
Yet as Professor Kevin Anderson states, the threat of catastrophic warming is being met by rhetoric and greenwash rather than the changes needed to keep warming at 1.5 degrees.
Previously at Croakey: