Presentation by Noel Hepworth and Alastair Swarbrick at the SIGMA Seminar on Developing Risk Management in Ministries held on 19-20 July 2016 in Tbilisi, Georgia.

1. © OECD
AjointinitiativeoftheOECDandtheEuropeanUnion,
principallyfinancedbytheEU
Risk Management
Developing risk management
in Ministries - Examples
Noel Hepworth and Alastair Swarbrick, SIGMA
Tbilisi, July 2016

2. AjointinitiativeoftheOECDandtheEuropeanUnion,
principallyfinancedbytheEU
Defence objectives – Georgia (1)
NATO-Georgia package of support: covers
13 areas: including strategic and operational planning,
aviation, air defence, maritime security, strategic
communications, special operations, military police, cyber
defence, acquisition and procurement, and intelligence-
sharing. The package includes the establishment of a
Defence Institution Building School, NATO-Georgia Joint
Training and Evaluation Centre (JTEC) and Logistics Facility,
and the facilitation of multi-national and regional
exercises.

3. AjointinitiativeoftheOECDandtheEuropeanUnion,
principallyfinancedbytheEU
Defence objectives – Georgia (2)
Questions affecting risk management:
1. What is the management structure for addressing all
and each of these 13 areas?
2. What is the budget for all and each of these 13 areas?
3. What are the accountability arrangements?
4. A crucial element in achieving the objectives is
personnel management: is there an effective (i.e. IT
based) personnel management policy and activity?

4. AjointinitiativeoftheOECDandtheEuropeanUnion,
principallyfinancedbytheEU
Defence objectives – Georgia (3)
A key activity is establishment of a NATO Georgia
Joint Training and Evaluation Centre (JTEC):
JTEC offers tactical training and evaluation, and
contributes to the development of Georgia’s command
and leadership philosophy. The JTEC aims to enhance
regional security cooperation, by offering unique
training opportunities to NATO and regional partners.
Activities include promotion of effective inter-agency
coordination in response to security challenges; the
facilitation of national, bilateral and multilateral
exercises; and training, evaluation and certification
activities, supported by the use of modern training
technologies – live, virtual and constructive simulation.

5. AjointinitiativeoftheOECDandtheEuropeanUnion,
principallyfinancedbytheEU
Defence objectives – Georgia (4)
JTEC
Questions:
1. What are the specific objectives for JTEC in 2016, 2017,
2018?
2. What budget is available to support JTEC in each year?
3. Who is responsible for managing the JTEC including the
budget and delivering the objectives?
4. Who has the HR information which will allow a coherent
training programme to be developed? Is the budget
consistent with the JTEC training programme?
5. Who ensures that personnel will be released to attend
the programme?
6. What happens to the trained personnel?

6. AjointinitiativeoftheOECDandtheEuropeanUnion,
principallyfinancedbytheEU
Defence objectives – Georgia (5)
JTEC - risks
Examples of risks:
1. Inadequate HR management information about
personnel;
2. Poor HR management policy preventing rotation of
personnel and retirement of inadequately trained
senior officers;
3. Failure of national/international coordination;
4. Failure of courses to meet NATO standards;
5. Lack of personnel coordination arrangements
preventing appropriate personnel attending courses;
6. Failure to effectively utilise trained personnel to raise
operational standards.
Question: who should manage such risks and
identify other risks?

7. AjointinitiativeoftheOECDandtheEuropeanUnion,
principallyfinancedbytheEU
Ministry of Economy – Foreign Direct
Investments (1)
A key objective:
From 2006 to 2014, foreign direct investments (FDI) in
Georgia amounted to 10 484.9 million USD in total. In
2014, foreign direct investments amounted to 1 272.5
million USD, that is 35.1% higher compared to the same
period of the previous year.
However:
• No indication is provided of the trends in FDI nor of the
target aimed for;
• No specific programme is identified with this objective;
• No objectives are identified for 2016, 2017, or 2018;
• No indication is provided of the economic areas which
FDI is aimed to benefit;
• No information is provided about the actions being
taken to promote FDI.

8. AjointinitiativeoftheOECDandtheEuropeanUnion,
principallyfinancedbytheEU
Ministry of Economy – Foreign Direct
Investments (2)
Questions:
1. What are the specific objectives for FDI in 2016, 2017,
2018?
2. What budget is available to support FDI in each year?
3. Who is responsible for managing the FDI policy including
the budget and delivering the objectives;
4. Who is responsible for coordination with the Ministry of
Finance and other ministries to achieve the FDI objectives;
5. Who is responsible for ensuring that the LEPLs and others
responsible for construction, tourism , communications, IT
and innovation are pursuing policies that are consistent with
the FDI objectives and that their budgets are also consistent
with the FDI objectives?
6. Who is responsible for liaising with foreign embassies?

9. AjointinitiativeoftheOECDandtheEuropeanUnion,
principallyfinancedbytheEU
Ministry of Economy – Foreign Direct
Investments (3)
Examples of risks:
• Lack of a specific manager and realistic objectives about FDI and
trends in FDI;
• Budgetary funds to promote inward investment inadequate for
the purpose and available funds are used ineffectively;
• Lack of Government coordination of fiscal policies;
• Competitive responses from neighbouring countries;
• Lack of understanding of key drivers of FDI because of
inadequate intelligence about foreign commercial requirements;
• Policy actions and budgets of relevant LEPLs inconsistent with
the objectives of FDI.
Question: who should manage such risks and identify other risks?