Reactive vs Proactive Due Diligence - What does R2A actually do?
Risk! Engineers Talk Governance Podcast
Season 8, Episode 3
In this episode of Risk! Engineers Talk Governance, due diligence engineers Richard Robinson and Gaye Francis discuss Proactive vs Reactive Due Diligence - what does R2A actually do?
In their chat they unpack why timing changes everything and that proactive work happens before problems occur, while reactive work (like expert witness testimony) occurs after something's already gone wrong, and by then it's often too late to fix cheaply.
Drawing on real examples, they explain why early engagement is cheaper, less adversarial, and allows genuine design fixes happen while there's still time.
Timestamps:
00:00 – Introduction
00:40 – Why this topic: R2A is often asked "what do you do?"
01:08 – The core frustration: being brought in for "proactive" due diligence too late in the project
01:39 – Why engineering-style thinking beats legal philosophy for avoiding mistakes
03:19 – Why lawyers and busy clients use R2A
03:54 – Bringing multiple stakeholders' views together into one structured conversation
04:22 – Case example: Brought in practively
05:24 – What proactive due diligence actually delivers: structured, defensible clarity
06:28 – Why proactive due diligence doesn't need to be difficult or expensive
06:58 – Aligning siloed stakeholders (commercial, legal, operational, regulatory)
08:12 – Why design-stage fixes disappear once a project reaches "practical completion"
09:23 – Case example: relocating a Queensland switch yard to design out a hazard early
10:00 – The payoff of early engagement: easier process, stakeholders on side
11:01 – Swinburne University postgrad unit on project due diligence
11:36 – Why some people grasp the criticality-and-control approach instantly — and others don't
12:00 – Wrap-up
Note, they mention discussing NZ Harbour in the last episode, this will be the next episode (#4).
If you'd like us to cover a specific topic or have any feedback we'd love to hear from you.
Episode transcript
Megan (Producer) (00:00):
Welcome to Risk! Engineers Talk Governance. In this episode, due diligence engineers Richard Robinson and Gaye Francis discuss Proactive versus Reactive Due Diligence - What does R2A actually do?
(00:15):
We hope you enjoy the chat. If you do, as always, please support our work by giving us a rating and subscribing on your favourite podcast platform. And if you'd like more information on R2A, our newsletter and resources, or have any feedback or topic ideas, head to the website, www.r2a.com.au.
Gaye Francis (00:35):
Hi, Richard. Welcome to today's podcast.
Richard Robinson (00:37):
Hello Gaye. Good to be here.
Gaye Francis (00:40):
The sun's shining, spring is springing, so that's always good.
Richard Robinson (00:43):
Spring has sprung, the grass is "ris". Yes, I know.
Gaye Francis (00:46):
Today we're going to talk about proactive versus reactive due diligence. And one of the reasons for it is we often get asked, "What do you do?" And I know that we've talked on our podcast around some expert witness stuff that we've done, but that's really not what we do on an everyday basis. That's probably 10% of what we do.
Richard Robinson (01:08):
Or less.
Gaye Francis (01:08):
Or less, correct. And one of our key frustrations is being invited to do what (organisations) intend to be proactive due diligence way too late in the game.
Richard Robinson (01:20):
Correct. It's either the events happened or it's the project's almost complete and they're trying to rush somebody in to fix things that should have been thought about a bit earlier. And obviously this is not a subject that we can talk about because people don't like to admit they needed people like us at that point.
Gaye Francis (01:35):
Correct. So it'll be a very general conversation. <laughs>
Richard Robinson (01:39):
But I think the point, if you ever wind up going to court, I mean from our point of view, it's...
Gaye Francis (01:44):
Too late.
Richard Robinson (01:45):
Too late. I mean, you've still got to go through the process, but I was reading David Howarth, the professor of law and public policy that we invited out to Melbourne before COVID, a long time ago now. But I was just reading, and this is on his profile in I think the law society of the UK. But he's just sort of making a couple of points about philosophy of law and the difficulty that judges have, because I've got to agree that the judges are in a really, really difficult position. So he's making the point that the philosophy of law is not particularly helpful when it comes to the fundamental legal objective of avoiding making mistakes. And that's his book, Law is Engineering, which is why we were interested in him.
(02:22):
He said: Engineering with its focus on not just design, but also safety is quite simply a better guide he thinks. Engineers are safer than lawyers because they must design with an eye to neighboring structures and the environment. Instead, in common law jurisdictions, it's left to the judges to manage all the resulting tensions. They need to have an eye on the case, an eye to the system as a whole, while deciding something very specific for the short term. Precedents direct our compliance, even though all our examples of laws that have, by definition, because they've entered in litigation in some way failed. And he considers this to be very unsatisfactory.
(02:57):
And I think we agree. I mean, we don't like being expert witnesses after the event. We'd much sooner have not had the situation arise in the first place.
Gaye Francis (03:06):
Correct.
Richard Robinson (03:07):
And most of the cases that I think we've dealt with, in hindsight, as far as we could tell, they could have all been avoided in some way or another.
Gaye Francis (03:16):
Well, there were other controls that could have been put in place, yes.
Richard Robinson (03:19):
Or other ways of thinking about things, which if everyone had been clever, that would've been the case. And so that's very frustrating for us. And what I guess surprises us, I mean the people who use us regularly, they're doing it because they're typically busy people, that's number one.
Gaye Francis (03:37):
Correct.
Richard Robinson (03:38):
They know they've got a concern, which they know if it doesn't go well, there's going to be difficult to handle, particularly in a legal sense.
Gaye Francis (03:45):
So that pink elephant syndrome...
Richard Robinson (03:47):
Yep.
Gaye Francis (03:48):
It (the pink elephant) might turn up.
Richard Robinson (03:49):
They know that we've talked to their lawyers and that whatever we do will keep the lawyers pretty much happy.
Gaye Francis (03:54):
The process will be diligent and seem to be diligent. And I think the other key thing is that there's often quite a number of stakeholders involved who have different opinions about the same issue. And so what our process does is it facilitates bringing all of that conversation together and having all of those views presented in a way that can then be talked through. And don't get me wrong, they're never always straightforward, are they?
Richard Robinson (04:22):
Nope.
Gaye Francis (04:22):
But it allows that robust discussion to happen and each party's views to be heard from their viewpoint. And what is the collective? And we've talked about this before, that collective and that cooperative approach gives you the results.
Richard Robinson (04:40):
Well, it's kind of interesting because I mean, we've talked about Wellington Harbour and the various drownings, and we can't really say who we've done it for, but we've done some recent work in New Zealand and what we were doing, and you went and visited, what we were doing is collecting all the different points of view. And remember we had a serious conversation with their lawyers up front making sure. And they were basically testing us to make sure that when R2A was doing all this material, we weren't setting anybody out for a fall, but it really would produce a robust, useful result that would satisfy hopefully in the increasingly unlikely event of a coronial inquiry, everyone would say, "Well, you, the council have done every reasonable practical thing we could. It's just life."
Gaye Francis (05:24):
So that's what we call the proactive due diligence aspect that we do. And I think that's where we bring the value is that it's part thought leadership, but it's also that clarity of thinking and taking people through a structured process in a way that everyone understands and can almost sign off on the due diligence decision that the organisation comes to for that particular issue.
Richard Robinson (05:48):
Correct. And it's like when we talk to the lawyers, we usually make that line. It's very difficult to get a lawyer to sign off on anything. But what you're really looking for is the lawyers to say, "Yeah, we see nothing wrong with what you propose." And when you finish the work, we do expect the lawyers to review it. And you might remember that the water board up north who said, the lawyer looked at us and said something to the effect that you people actually did what you say you were going to do, which I found completely irritating, but anyway.
Gaye Francis (06:17):
Well, you would hope you did what you said you were going to do, but apparently that's not always the case. No, you've lost me with it. <laughs>
(06:28):
So yeah, that proactive due diligence, it doesn't have to be difficult. It's a clear thinking exercise rather than, because people do know that the world's full of problems, as we said. There's some that you've got to make sure that you deal with and seem to be dealt with.
Richard Robinson (06:44):
It's the critical ones.
Gaye Francis (06:46):
Critical ones, absolutely. So by focusing on that, you can then focus on the controls that you're going to put in place, which is the key thing, and all your stakeholders that are then on the same page.
Richard Robinson (06:58):
That's correct. And I have noticed, and that's the other reason why people use us a lot. If you are in silos, you've got asset owners and operators and field staff...
Gaye Francis (07:09):
Maintenance people.
Richard Robinson (07:10):
All the different parties. Yes, the commercial people have an objective. The legal people have an objective. The operational people have an objective. The government's got regulations. I mean, you've been doing these regulatory reviews, particularly for ESVs for electrical networks. And they're trying to make sure all these things align in a constructive and useful way because it's self-evident. You can't afford to pay for everything. I had this discussion with my brother on the weekend about bushfires again, but he had observed that putting underground power lines in would stop bushfires just as a passing remark. I said, well, yep, we thought about that hard on the power line bushfire safety task force, but you're not going to abruptly underground all the power lines in Victoria because it's not commercially possible.
Gaye Francis (07:52):
Correct.
Richard Robinson (07:52):
But new estates and new houses, services are mostly underground these days.
Gaye Francis (07:59):
Yeah. And I think that's where it is. It depends on where you are in your project. And one of the frustrations for us is some of the issues that they've identified that have really quite simple controls that could be put in place, i.e. designed out.
Richard Robinson (08:12):
At the start.
Gaye Francis (08:13):
At the very, very start of a project, by the time you're at that terrible term, practical completion in inverted commas, there's no way that you can do that anymore. And so you've got this, we'd like to use pink elephant almost sitting there in the wings, potentially waiting to happen, that doesn't have a lot of controls that you can now put in place because you're so far into it.
Richard Robinson (08:38):
That's right. And it's a high consequence, low likelihood event. And so the likelihood is that it won't happen, but if you took all those places and all those projects, it will happen somewhere.
Gaye Francis (08:48):
Correct. So I think the value of the proactive due diligence, and it doesn't have to be an expensive exercise. You're not talking hundreds of thousands of dollars, you're talking tens of thousands of dollars, small tens of thousands of dollars that you could get a handle really of what your key issues are, what your controls are in place. And I think even sometimes it'd actually start thinking about would we actually go down that path if there were those potential showstoppers?
Richard Robinson (09:23):
Well, you might remember that, and it was a long time ago now, but in Queensland, the power company who had a switch yard next to the railway line, that was the proposal from a sighting and where the power lines were. But obviously earth return currents with metal rails around means you can propagate a hazard a long way unexpectedly. And in the end they just decided the easiest thing was to relocate it far enough away, sell the site, buy a new one a bit further away. Yes, you had to run power lines to and from it, but that hazard was basically gone. And that was a planning solution. And the only reason why it could happen is because they asked early.
Gaye Francis (10:00):
Yes. So I think for us, if you can do this due diligence stuff early in your project or early in your organisation and it's proactive rather than reactive, a lot easier to do. And you often got all your stakeholders on side as well. And it's a process that's then not in your face.
Richard Robinson (10:25):
Well, I always find it strange because we try to publish things, but the only things we're allowed to publish are the ones that went well by definition, because particularly if you're dealing with governments, they will never let you publish. And yet the ones we spend most of our time on, probably the government projects that haven't gone as well as they should. And yet the ones where we were involved early
Gaye Francis (10:45):
Just went smoothly.
Richard Robinson (10:47):
Anyway.
Gaye Francis (10:48):
And I think it is important that even though we help organisations facilitate the process in a proactive manner, the decisions that come out of it and the way forward, the organisation has to run with.
Richard Robinson (11:01):
I suppose we should actually mention in passing, we're still doing that classes at Swinburne Uni, the post-grad unit in engineering on project due diligence. You always slightly mystify the next time it pops up because it always happens in school holidays.
Gaye Francis (11:13):
It does happen during school holidays, but that's alright. So yeah, they've got students going through their post-grad course. It's an engineering course, isn't it?
Richard Robinson (11:23):
It's post-grad engineering.
Gaye Francis (11:24):
And we always do the project due diligence stuff with them and get them to do an assignment. So it's something that we certainly encourage and encourage our clients and our students to do in a proactive manner.
Richard Robinson (11:36):
And it always interests me because some of the students get it...
Gaye Francis (11:42):
Straight away.
Richard Robinson (11:42):
Straight away and it just becomes obvious to them. And other people, for example, try to use the Risk Management Standard, hazard and risk rather than criticality and control and come badly unstuck. Even though once we've explained it...
Gaye Francis (11:55):
It's so obvious.
Richard Robinson (11:56):
Well, we continue to think it's so obvious. <laughs>
Gaye Francis (11:58):
That's right. All right. So we just wanted to outline the difference between proactive and reactive due diligence today and that we are getting questions around what the value of doing some of the processes are. And as you can see, we still believe in them heavily. So thanks for joining us today, Richard, and we'll see you next time. Thank you everyone.
Richard Robinson (12:20):
Thanks Gaye.