Application to funded third parties

Some Commonwealth entities fund organisations to deliver services or activities that relate to, or may involve or impact, children. As such, the Framework encourages entities to promote child safety in the services and activities they fund. This extends the Australian Government’s commitment to child safety to organisations that deliver services and activities on our behalf – referred to in the Framework as Commonwealth funded third parties (funded third parties).

The Framework recommends that (where appropriate) entities impose child safety requirements consistent with the Framework on any individuals or organisations they fund to provide services directly to children, or for activities that involve contact with children that is a usual part of, and more than incidental to, the funded activity. These requirements should be imposed in written form, including, but not limited to, funding through grants and procurements. Funded third parties must implement the requirements included in their funding agreements. However, they are not required to implement the Framework itself as it applies only to Commonwealth entities.

Child safety clauses in funding arrangements

There are standard child safety clauses available to help Commonwealth entities apply child safety requirements to funded third parties. These clauses are available for use in grants through the optional Supplementary Conditions to the Commonwealth Simple and Standard Grant Agreement templates. Clauses for use in procurements are available from the Commonwealth ClauseBank. There are different clause options available depending on the service or activities expected level of interaction with children.

Overall, the clauses aim to ensure:

• all staff who may be working with children undergo appropriate screening and recruitment practices
• the organisation takes appropriate child safety measures (e.g. through the implementation of the National Principles for Child Safe Organisations, and
• that the third party’s obligations relating to child safety are replicated in subcontracts and secondary subcontracts where relevant.

Each Commonwealth entity’s Accountable Authority is responsible for deciding where and how child safety requirements will be applied to funded third parties.

Statement of compliance by funded third parties

The child safety clause templates, referenced above, include the option of requiring a funded party to provide an annual statement of compliance with the relevant clause. This statement is provided by the funded third party to the funding Commonwealth entity. It is a decision for the entity responsible for engaging the third party whether they seek an annual statement of compliance and what information they require in the statement. While a similar action, this option, if included in the funding agreement, does not require funded third parties to implement Requirement 4 of the Framework which applies only to Commonwealth entities. Requirements for funded third parties will be specified in writing in the funding agreement.

For third party arrangements where there is minimal interaction with children, it is recommended that the statement of compliance assure the funding entity that the third party is complying with the obligations of the child safety clause. The third party should also include a brief description of how they have ensured compliance with the child safety clause.

For third party arrangements where regular interaction with children is expected, it is recommended that the statement of compliance assure the funding entity that the third party is complying with the obligations of the child safety clause, including a more detailed description addressing how they are compliant with each of the obligations outlined in the child safety clause.

Application to subcontractors

Managing the supply chain is very important in preventing harm to children and promoting child safety. Commonwealth-funded third parties may in turn subcontract additional organisations to deliver parts of a service or activity, including those that involve interaction with children. In this circumstance, it is important that child safety obligations are not neglected or avoided. The funded third party is responsible for ensuring that all relevant aspects of the written agreement are complied with, including when subcontractors are involved.

It is recommended that child safety clauses are replicated in, or extended to, subcontracts and secondary subcontracts, where the service provided by the subcontractor(s) involves providing services directly to children, or for activities that involve contact with children that is a usual part of, and more than incidental to, the funded activity. For example, the funded third party should seek assurance from the subcontractor that they comply with relevant state and territory legislation (e.g. Working with Children Checks and mandatory reporting).

There may be situations where it is not clear whether the child safety clause should be replicated in subcontracts or secondary subcontracts, for example if the subcontractor will have only occasional, incidental interactions with children. Decisions about replicating child safety clauses in subcontracts and secondary subcontracts may be made by entities on a case-by-case basis. In some cases, contact with children will be sufficiently incidental to not require the inclusion of child safety clauses.

It is also recommended that Commonwealth entities request that third parties include details of the relevant subcontractor’s child safety responsibilities in the third party’s annual statement of compliance to the entity. Entities do not need to engage directly with the subcontractors.

Third parties operating overseas

To the extent possible, entities providing Commonwealth funding to third party organisations overseas should endeavour to ensure those organisations have appropriate child safe practices in place. It is the responsibility of the relevant Accountable Authority to decide where and how the Framework will be applied to funded third parties.

If an entity is providing funding to organisations that are not required to comply with Australian laws, then the existing child safety clauses may not provide adequate safeguards for children’s safety. In these circumstances the entity should seek legal advice on appropriate variations or alternatives to the child safety clause.

The Department of Foreign Affairs and Trade has an established child protection policy for funded third parties working overseas.

Third parties that are not compliant with their child safety obligations

Non-compliance by a funded third party with their child safety obligations poses potential risks to children. If a funded third party does not comply with any child safety obligations included in a written agreement, the responsible entity should take immediate action to address the non-compliance. Depending upon the nature of the non‑compliance, it may need to be reported to authorities.

If the funded third party has reported non-compliance with their legislative obligations for working with children checks or mandatory reporting, it may be an offence in the relevant state or territory. If this occurs, entities are encouraged to seek advice from the appropriate state and territory government bodies and / or their legal advisors.

In other circumstances, the relationship between an entity and the funded third party is governed by the terms and conditions of the written agreement. The terms and conditions for each written agreement may vary.

In the first instance it may be appropriate to request the funded third party to urgently provide:

• further information about the non-compliance
• details about how they will rectify their non-compliance (please ensure this is done within an appropriate timeframe), and
• notice of when they have achieved compliance with the child safety clause.

If the funded third party does not provide a satisfactory response, the entity may wish to seek legal advice about the remedies or sanctions available under the written agreement.

This could include such things as withholding payment of the fees until the funded third party complies with the obligations, or termination of the written agreement.