Australian government consultant sparks controversy with conflict of interest: 'Who would think it's a good idea ... ?'

The Australian government hired a consulting firm with ties to Big Oil to analyze its energy and climate policy, creating a troubling conflict of interest.

What's happening?

According to The Guardian, McKinsey & Company, a global management consulting firm, earned $1.6 million and spent 11 weeks conducting "detailed market, economic and policy analysis" for the Department of Climate Change, Energy, the Environment and Water.

McKinsey's connections to big players in the oil industry raise serious concerns. According to the DCCEEW, a lack of internal "technical capacity" called for outsourcing.

The Centre for Climate Reporting and ARIA organization assessed U.S. court documents showing McKinsey's associations with oil companies. Its clients included Shell Australia, BHP, Caltex, Peabody Energy Australia, Origin, Santos, Woodside, Inpex, Rio Tinto, and AGL.

The Guardian reported that the firm did not provide recommendations to the government. But critics question the analysis' legitimacy and government's spending choices.

Why is McKinsey's influence on Australian climate policy important?

This research is crucial for making positive environmental decisions at the government level. McKinsey's website states that the firm helps oil and gas companies "accelerate sustainable and inclusive growth."

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Big Oil is mostly responsible for issues related to the changing climate, but reporting this correlation would be against the firm's interests and profits. This led people to question the reliability of the analysis.

"Who would think it's a good idea to hire a company that works for some of the world's biggest fossil fuel producers?" Greens Sen. Barbara Pocock said, according to The Guardian. "… This is core government work that needs to be conducted by public servants who are accountable to the public interest."

Independent Sen. David Pocock raised similar concerns, calling the consultation choice "completely inappropriate."

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And it's not just about the conflict of interest. Many think this was a reckless and unnecessary use of public funds.

What's being done about government and private sector conflicts of interest?

Politicians and activists urge the Australian government to sever these private-sector ties. Polly Hemming, the director of the Australia Institute's climate and energy program, explained that the government needs to conduct such research internally and said, "It is more transparent and more cost-effective than spending millions of dollars on private consultants."

Fran Baum, a public health expert at the University of Adelaide's Stretton Institute, said the government should hire academics. These independent climate experts would be "much cheaper and better informed."

Conflict of interest policies are already in place. However, supporting politicians who are against this outsourcing and pressuring the government can affect positive change. Hopefully, the government will listen and stop outsourcing to the private sector.