Aid risk management approach

The Australian aid program operates in a number of countries with challenging security environments and weak governance. By their nature, aid investments contain a high degree of risk which requires careful management. Early identification and management of risks contributes to managing aid effectively.

The Department of Foreign Affairs and Trade (DFAT) considers risk at all stages of the aid management cycle. Risk and value assessments are undertaken at the planning and design phase of investments.

Risk and treatments are reviewed regularly enabling sound decision making and the development of proportionate and defensible management strategies that balance risk against benefits.

DFAT undertakes a range of risk management measures including fraud control, partner government system assessments, due diligence assessments, multilateral organisational assessments as well as the application of safeguards on environmental protection, resettlement and child protection.

The department’s approach to identifying and assessing risk in aid investments follows the principles of the International Standard on Risk Management (AS/NZ 31000:2009).