The inquiry
1.1
On 28 September 2022, the Senate and the House of Representatives established the Joint Select Committee on National Anti-Corruption Commission Legislation (the Committee) to inquire into the provisions of the following two bills:
the National Anti-Corruption Commission Bill 2022 referred to as ‘the NACC Bill’; and
the National Anti-Corruption Commission (Consequential and Transitional Provisions) Bill 2022 referred to as ‘the NACC (C+TP) Bill’ (together, the Bills).
1.2
The Senate and the House of Representatives required the Committee to report on or before 10 November 2022.
1.3
Details of the inquiry were advertised on the Committee’s webpage and via social media. The Committee wrote to a number of organisations and individuals inviting them to make a submission. The Committee also issued a media release on 5 October 2022 inviting submissions on the provisions of the Bills. The Committee called for submissions to be received by 14 October 2022.
1.4
While read and considered, the Committee refrained from publishing several submissions. This included evidence from individuals who shared their personal experiences dealing with corruption matters or their role in alerting authorities to corruption.
1.5
The Committee was cautious in relation to evidence that contained possible adverse reflections, allegations of possible corruption or comments with the potential to disrupt current or pending legal proceedings. In general, the Committee expected submissions to address provisions of the Bills. The purpose of the Committee was to inquire into the provisions of the Bills, rather than to investigate or make known allegations of corruption or to review the handling of historic corruption matters.
1.6
The Committee invited a range of government agencies, Australian anti-corruption and integrity bodies, current and former commissioners, current and former inspectors, civil society organisations, academics, law societies, unions and professional associations to participate in the inquiry.
1.7
Due to the Committee’s short reporting deadline, this report relies upon draft transcripts of public hearings (known as ‘proof Committee Hansard’). Errors or omissions are possible and readers are encouraged to check finalised transcripts when they become available on the Committee’s website for verification.
Provisions
1.8
On 28 September 2022 the Attorney-General, the Hon Mark Dreyfus KC MP, introduced the Bills and an Explanatory Memorandum to the House of Representatives.
1.9
In introducing the Bills, the Attorney-General explained that they are intended ‘to eliminate corruption in the federal public sphere, and restore trust and transparency in our democratic institutions’.
1.10
The NACC Bill contains 13 parts:
Part 2 – Key concepts used in this Act
Part 3 – The National Anti-Corruption Commission
Part 4 – Protections for disclosers under this Act
Part 5 – Referring corruption issues
Part 6 – Dealing with corruption issues
Part 7 – Investigating corruption issues
Part 8 – Reporting on corruption investigations
Part 9 – Public inquiries
Part 10 – Oversight of the National Anti-Corruption Commission
Part 11 – Confidentiality, consultation and information sharing
Part 12 – Administrative provisions for the National Anti-Corruption Commission
1.11
The NACC (C+TP) Bill is, among other things, intended to provide arrangements for existing investigations – currently being undertaken by the Australian Commission for Law Enforcement Integrity (ACLEI) – to be given to the proposed National Anti-Corruption Commission (NACC).
1.12
A submission from the Attorney-General’s Department provides a summary of the provisions of the Bills and, in addition, the submission from ACLEI outlines a range of transitional matters.
1.13
Selected extracts of the Bills can be found in Appendix B.
NACC functions and powers
1.14
The NACC Bill establishes the office of the Commissioner, along with up to three Deputy Commissioners who are granted powers to investigate serious or systemic corrupt conduct affecting the federal public sector.
1.15
This includes the ability to investigate:
Commonwealth Ministers and parliamentarians;
persons engaged under the Members of Parliament (Staff) Act 1984;
the heads and employees of Commonwealth agencies, government contractors and their employees;
members of the Australian Defence Force;
statutory office holders and appointees, officers and directors of Commonwealth companies; and
people or bodies providing services, exercising powers or performing functions on behalf of the Commonwealth.
1.16
Clause 8 of the NACC Bill defines ‘corrupt conduct’ to include any conduct of a person (including a public official) that adversely affects, or could adversely affect, the honest or impartial exercise or performance of any public official’s powers, functions or duties. Corrupt conduct would also include any conduct of a public official that:
constitutes or involves a breach of public trust;
constitutes, involves, or is engaged in for the purpose of abuse of the person’s office as a public official;
constitutes or involves the misuse of information acquired in the person’s capacity as a public official; or
constitutes, involves, or is engaged in for the purpose of corruption of any other kind.
1.17
The Commissioner could investigate both criminal and non-criminal conduct, and conduct occurring before or after the NACC’s establishment.
1.18
The Commissioner would only be able to commence an investigation in relation to a corruption issue if the Commissioner is of the opinion that the corruption issue could involve serious or systemic corrupt conduct. The NACC Bill’s Explanatory Memorandum states that this includes, but is not limited to, conduct that could constitute a criminal offence.
1.19
The NACC Bill defines a corruption issue as an issue of whether a person has engaged, is engaging, or will engage in corrupt conduct.
1.20
The Commissioner would have the power to conduct a preliminary investigation. The purpose of preliminary investigations is to gather information to confirm the existence of a corruption issue and to determine whether it could involve serious or systemic corrupt conduct.
1.21
The Commissioner would be able to exercise a range of powers under the NACC Bill and other legislation to undertake their functions.
1.22
The Commissioner could hold hearings as part of an investigation into a corruption issue or a public inquiry. Hearings would, by default, be held in private. The Commissioner would have the discretion to hold public hearings in relation to an investigation or public inquiry where the Commissioner decides that exceptional circumstances justify holding the hearing in public and it is in the public interest to do so.
1.23
The Commissioner would also have powers to:
compel the production of documents or information;
obtain a warrant to enter and search premises;
enter certain Commonwealth premises without a search warrant;
exercise limited powers of arrest to ensure attendance at a hearing.
1.24
The NACC Bill contains provisions to ensure the NACC’s independence, including that:
the Commissioner would be able to receive complaints or referrals from any source, including the public;
the Commissioner will have discretion in the way they handle corruption issues and conduct corruption investigations and public inquiries;
the appointments of the Commissioner and Deputy Commissioners will be subject to approval by a multi-partisan parliamentary joint committee, following a recommendation from the Attorney-General;
the Commissioner will be appointed for a single, fixed term and will not be able to reappointed, ensuring the Commissioner has no incentive to consider the regard in which they are held by the government of the day;
the Commissioner and Deputy Commissioners will have security of tenure comparable to that of a federal judge.
1.25
The NACC will also have education and prevention functions, including the ability to conduct public inquiries into corruption risks, vulnerabilities and measures to prevent corruption in Commonwealth agencies.
1.26
The NACC (C+TP) Bill would amend other Commonwealth legislation to give effect to the NACC, including to provide the Commissioner with covert investigative powers that are currently conferred on ACLEI’s Integrity Commissioner. These include telecommunications interception powers and the ability to use surveillance devices, subject to existing thresholds for the use of those powers by law enforcement agencies.
1.27
The NACC Bill requires the Commissioner to prepare a report on a completed investigation and provide it to the Attorney-General. Reports are required to be published in some circumstances.
1.28
In addition, the Bills contain provisions that include:
protections for journalists;
presentations of annual reports;
establishing an inspector of the NACC; and
oversight by a parliamentary joint committee.
1.29
The proposed NACC, if established, would exist alongside several agencies and regimes relating to detecting criminal activity, integrity and oversight within government, including the:
Australian Federal Police (AFP);
Australian National Audit Office (ANAO); and
Australian Public Service Commission.
Overview – National Anti-Corruption Commission
1.30
Multiple organisations and individuals have a long history of advocating for the establishment of a national anti-corruption commission, and have made significant contributions to the debate over a number of years – including most recently consulting with the Attorney-General’s Department to inform the design of the NACC.
1.31
The evidence received by the Committee addressed important issues on topics of considerable debate – thoughtful and well considered views were expressed, and the Committee thanks those who provided submissions or appeared at hearings to answer questions.
1.32
The Attorney-General’s Department also noted that it has drawn on lessons from state and territory anti-corruption commissions and ACLEI, and the Committee particularly thanks those Commissioners and Inspectors (both current and former) who made submissions or appeared at hearings – their practical experience was an invaluable contribution to the Committee’s work.
1.33
It has been necessary to carefully consider the competing viewpoints expressed about different issues raised by the Bills, noting that there are few areas in which a clear consensus emerges. The Committee notes however that the vast majority of submissions and witnesses, as a general principle, were in favour of establishing the NACC, and were supportive of several key aspects of the proposed legislation.
1.34
The Australia Institute’s National Integrity Committee noted that the NACC Bill meets many of the basic principles it considers necessary to ensure that the NACC will be effective, including being independent from Government, having broad jurisdiction and having full investigative powers. The Governance Institute of Australia similarly stated that the NACC Bill includes many provisions that reflect the principles its members consider fundamental to the establishment of an effective anti-corruption body.
1.35
Transparency International Australia welcomed the proposed definition of corrupt conduct, which it considered was simpler, broader, more flexible and less technical than most previous Australian precedents, and the strong corruption prevention, educative and integrity-building functions of the NACC. The Centre for Public Integrity believe that the NACC Bill ‘proposes an integrity commission which will be fit for purpose in almost all material respects’.
1.36
The Accountability Round Table pointed to several features of the NACC Bill including the NACC’s proposed investigative powers and reporting requirements that preserve procedural fairness, noting that ‘the Bill creates the NACC, an important proactive reform of existing integrity mechanisms worthy of widespread support’.
1.37
Both the Law Council of Australia (Law Council) and the Australian Federal Police Association supported the consistent approach to processes, powers and requirements when dealing with corruption issues across law enforcement and the public sector. The Law Council also welcomed the oversight function of the NACC by way of a parliamentary joint committee and an independent Inspector.
1.38
There was also broad-based support for the referral mechanisms in the legislation – the Australian Lawyers Alliance noted that anyone can make a referral regarding a corruption issue, including members of the public, a feature which was also endorsed by the Australian Human Rights Commission.
1.39
The Committee’s attention was repeatedly drawn to the important role a national anti-corruption commission would have in improving trust in the public sector through accountability and oversight. The Australian Human Rights Commission noted that corruption at its worst can undermine democracy and the rule of law, and can undermine public trust in government. The Australian Council of Trade Unions submitted that ‘for the sake of accountability and public confidence, there needs to be a body whose sole focus is the identification and investigation of public corruption’, and were of the view that the NACC would be such a body.
1.40
While supportive of establishing a national anti-corruption body, several submissions and witnesses qualified their support as being attended by various concerns being resolved, such as the definition of corruption, the NACC’s ability to hold (or not hold) public hearings and the scope of the role of the Inspector. On these and other points, there were divergent views on specific aspects of the Bills.
1.41
The Committee notes that the Prime Minister, Ministers, Senators and Members of the House of Representatives will be subject to the NACC, as is appropriate. It is also important to note that the NACC’s jurisdiction will cover over 7,000 members of the Australian Federal Police, 84,000 members of the Australian Defence Force, over 248,000 Australian Public Servants, as well as hundreds of thousands of contractors, sub-contractors, and anyone exercising a power under a law of the Commonwealth. The Committee’s consideration of the evidence before it required it to strike the right balance having regard to the scope of the NACC’s jurisdiction.
1.42
The Committee also notes that a number of issues which were raised in both submissions and during the course of the Committee’s hearings and deliberations have not been canvased in this Report. In some instances, these issues were the subject of different views which were ventilated in the evidence provided to the Committee. As always, these issues may be raised in the course of the debate when the Bills are considered by the Parliament.
1.43
Readers are encouraged to consult the text of the Bills, Appendices A and B, public hearing transcripts and submissions for additional contextual information, technical detail and to understand the range of views expressed during the inquiry.
The Committee’s views
1.44
The Committee’s views on the NACC Bill and the NACC (C+TP) Bill are summarised in the next sections as follows:
Accountability and reporting
Jurisdiction
1.45
The NACC Bill provides the Commissioner with jurisdiction to investigate ‘serious or systemic’ corrupt conduct by individuals carrying out official functions on behalf of the Commonwealth.
1.46
The Committee heard evidence relating to various aspects of the NACC’s jurisdiction. In particular, the Committee considered:
whether the words ‘or that could adversely affect’ should be removed from the first limb of the definition of corrupt conduct in paragraph 8(1)(a);
whether the NACC’s jurisdiction should extend to third party conduct that adversely affects public administration, but does not involve corruption of a public official;
whether ‘corruption of any other kind’ should be removed from the definition of corrupt conduct in subclause 8(1)(e);
the ability of the NACC to investigate past conduct; and
whether the definition of ‘corruption issue’ should include an issue of whether a person will engage in corrupt conduct as contained in paragraph 9(1)(c).
1.47
The Explanatory Memorandum explains that the definition of corrupt conduct in clause 8 (see full text of clause 8 in Appendix B) will be central to the operation of the NACC Bill and to the Commissioner’s jurisdiction.
1.48
Clause 8 of the NACC Bill defines corrupt conduct in the following terms:
a.
any conduct of any person (whether or not a public official) that adversely affects, or that could adversely affect, either directly or indirectly:
i.
the honest or impartial exercise of any public official’s powers as a public official; or
ii.
the honest or impartial performance of any public official’s functions or duties as a public official.
b.
any conduct of a public official that constitutes or involves a breach of public trust;
c.
any conduct of a public official that constitutes, involves or is engaged in for the purpose of abuse of the person’s office as a public official;
d.
any conduct of a public official, or former public official, that constitutes or involves the misuse of information or documents acquired in the person’s capacity as a public official;
e.
any conduct of a public official in that capacity that constitutes, or is engaged in for the purpose of corruption of any other kind.
1.49
The Explanatory Memorandum states that clause 8 is intended to reflect long-standing standards of conduct by public officials and their existing duty, rather than establish a new standard of conduct by public officials or alter the relationship between those officials and the public.
1.50
The Committee received evidence in relation to the scope of clause 8, and whether the provision as presently drafted captures conduct colloquially referred to as ‘pork-barrelling’.
1.51
The Australian Lawyers Association noted its support for the NACC’s broad investigative threshold of ‘corrupt conduct that is serious or systemic’, and said:
The potential for this threshold to capture more indirect (though no less insidious) forms of corruption known as ‘elements of grey corruption’ (examples include influencing politicians through large donations, ‘pork-barrelling’, hiring expensive lobbyists), is highly commended by the [Australian Lawyers Alliance].
1.52
The Committee’s attention was also drawn to the Operation Jersey report of the NSW ICAC. The former Commissioner of the NSW Independent Commission Against Corruption (NSW ICAC), the Hon Peter Hall KC, appearing in his private capacity, stated that whilst there may be a question of precise wording to avoid unintentionally capturing acceptable forms of conduct, he supported an amendment to the NACC Bill that would expressly capture pork-barrelling within the definition of corrupt conduct, noting that:
There is a need to address this question of electioneering promises, where there is currently – it seems – not always but in many cases – a lack of any proper business case or analytical attempt to truly determine what is in the public interest.
1.53
Mr Greg Melick AO SC in his evidence before the Committee stated that pork-barrelling was, in his view, the type of conduct that should be covered by an organisation such as an anti-corruption commission. The Community and Public Sector Union agreed that the NACC should have the ability to look at ‘grey-area’ corruption risk, and expressed the qualified view that the NACC Bill seemed broad enough to capture such matters.
1.54
The Attorney-General’s Department informed the Committee that pork-barrelling or breaches of the ministerial code would be covered by the NACC Bill as presently drafted – specifically indicating that “if a power with particular rules is given to someone to exercise for a particular purpose and then it’s used for an improper purposes, that’s covered by the definition of ‘corrupt conduct’, as a breach of public trust or the dishonest or partial exercise of functions.
Definition of ‘corrupt conduct’ – clause 8(1)(a)
1.55
During the inquiry, the Committee heard that the words ’or that could adversely affect’ in clause 8(1)(a) may be vague or unnecessary.
1.56
The Law Council suggested that that phrase could be omitted due to the operation of subclause 8(10), which provides that conduct comprising conspiracy or an attempt to commit or engage in conduct covered by subclause 8(1) is itself corrupt conduct. The Law Council submitted:
The potentially indeterminate scope of ‘could adversely affect’ introduces the risk that a Commissioner’s decision may be politicised, with regard to whether particular conduct amounts to ‘corrupt conduct’ within the meaning of sub-clause 8(1). In this context, it is desirable that the Commissioner has greater objective specification by reference to which key definitional concepts can be ascertained.
1.57
Professor Alan Lawton shared the Law Council’s view that inclusion of the phrase ‘or that could adversely affect’ is too vague.
1.58
On the other hand, the Attorney-General’s Department regarded both subclause 8(1)(a) and subclause 8(10) to be necessary inclusions. The Department said the phrase ‘or that could adversely affect’ is a standard clause taken from state and territory anti-corruption commission legislation. The Department added:
Section [8](10) works in tandem with 8(1)(a). It's attempting conduct that could adversely affect. They work together to make sure that conduct that's undertaken with that as a possibility or an intention can be captured.
1.59
The Department advised:
The concept of ‘could adversely affect’ contained in paragraph 8(1)(a) is relevant to determining the potential impact of the relevant conduct on the honesty and impartiality of a public official, whereas subsection 8(10) is intended to capture situations where a person might attempt, but fail, to engage in corrupt conduct (as outlined in the Explanatory Memorandum for the NACC Bill, see paragraph 2.62). When taken together paragraph 8(1)(a) and subsection 8(10) mean that an attempt to engage in conduct that could adversely affect the honesty or impartiality of a public official would be covered.
1.60
The Department provided the following example of conduct where a person was ‘attempting to engage in conduct’ that ‘could adversely affect’ a public official’s honesty or impartiality:
a potential supplier for a government procurement sends a text message offering a bribe to a public official who is responsible for evaluating a tender (conduct that could adversely affect the impartiality of the public official),
the public official does not receive the message because it was sent to the wrong number (in which case, the potential supplier has attempted, but not succeeded, to engage in corrupt conduct), and
there is nothing to suggest that the public official would have accepted the bribe and made a dishonest or partial decision if the official had received the offer of a bribe (emphasis added).
1.61
The Department said it is important the NACC can investigate conduct by a person that is intended to have a corrupting effect on a public official irrespective of whether the public official acted corruptly.
1.62
Transparency International Australia agreed with retaining the phrase ‘or that could adversely affect’ in subclause 8(1)(a) as it would enable the NACC to have jurisdiction to look at ethical conduct, rather than focus on legality.
Committee views
1.63
The Committee does not recommend that the words ‘or that could adversely affect’ be removed from clause 8(1)(a).
1.64
Dr Haines, Deputy Chair of the Committee, and Senator David Pocock expressed the view that conduct colloquially referred to as ‘pork barrelling’, namely any conduct that involves the allocation of public funds and resources to targeted electors for partisan political purposes, should be included within the remit of ‘corrupt conduct’ and considered that the Government should make an amendment to the Bill to make this clear.
1.65
The Coalition Committee Members expressed the view that clause 8(1)(a) as drafted was problematic insofar as it included the phrase ‘or that could adversely affect’. Those Members considered that this phrase introduces uncertainty into the definition of corrupt conduct, appears superfluous (as conspiracy is covered elsewhere), and risks politicising the Commissioner’s decision-making as to what constitutes ‘corrupt conduct’. They noted that the Law Council of Australia recommended that the phrase ‘could adversely affect’ be deleted from clause 8(1)(a).
Third party conduct
1.66
The Attorney-General's Department explained that the definition in clause 8(1)(a) does not cover external frauds against the Commonwealth and that where third-party conduct does not or could not affect the honest or impartial discharge of a public official’s duty. There are existing arrangements for dealing with external criminal activity that is not intended to involve any corruption of a public official. The Department said, for example, that a cyberhack on a government system where there is no involvement of any insider or attempt to involve an insider with access to information would not be covered by the definition.
1.67
Some submissions expressed a view that the definition of corrupt conduct should be expanded to reflect Justice Gageler’s minority opinion in Cunneen. Justice Gageler considered that the term ‘adversely affect’ only requires conduct to have had the potential to limit or prevent the proper exercise of official functions.
1.68
Professor Anne Twomey said that to follow the majority approach in Cunneen would mean the definition of corrupt conduct would not capture, for example, a member of parliament acting outside the scope of their parliamentary role who deceives public servants in relation to the grant of a mining licence or the acquisition of land on a systemic basis. Professor Twomey said this is because such conduct would not cause another public official to act dishonestly or partially.
1.69
The Centre for Public Integrity submitted:
In areas of serious or systemic corruption, it would be a major omission from the scope of an effective National Integrity Commission if the definition of corrupt conduct were to be limited to third-party corruption of public officials. It must extend to cases of dishonest and fraudulent deception of public officials, where the conduct is capable of impairing the efficacy of public administration, or public confidence in public administration.
1.70
The Accountability Round Table submitted that the definition should capture both public officials and corrupt outsiders dealing with honest public servants. The submission added that the current definition would mean corrupt third parties could conspire and attempt to corrupt public officials but not be found to have engaged in corrupt conduct if the attempt failed or it was considered unlikely to affect an outcome. The submission stated:
The effect is that the Commissioner may be prevented from dealing with situations where dishonest outsiders attempt to corrupt Commonwealth officials or transactions… It would seem desirable that all such matters remain within the definition of corrupt conduct, and the NACC’s jurisdiction, leaving it to the Commissioner to decide whether the matter is of sufficient significance to investigate it.
1.71
Submissions with concern about the application of the definition of corrupt conduct suggested including wording similar to subsection 8(2A) of the Independent Commission Against Corruption Act 1988 (NSW) (NSW ICAC Act), which reflects Justice Gageler’s minority approach in Cunneen. In that Act, subsection 8(2A) provides that corrupt conduct is also any conduct of any person that impairs, or could impair, public confidence in public administration involving a list of matters including fraud and collusive tendering.
1.72
The Committee notes that all Australian jurisdictions other than Western Australia and Tasmania adopted wording similar to section 8(2A). Transparency International Australia said the definition in clause 8 should have an additional subclause to clarify:
‘corrupting’ actions of third parties or private individuals can be investigated and reported upon even if the relevant public officials are not themselves aware that their powers or functions have been, or are intended to be, corrupted.
1.73
In relation to the suggestions discussed above, the Attorney-General’s Department advised that the NACC’s jurisdiction should not be expanded to include conduct by external parties that could impair the efficacy of public administration but that does not involve, and is not intended to involve, any wrongdoing by a Commonwealth public official. The Department said expanding the definition in this way would extend the NACC’s jurisdiction well beyond matters involving corruption.
1.74
The Department said such expansion of the definition could detract from the NACC’s focus on serious or systemic corruption and undermine existing effective arrangements for dealing with third party conduct that does not involve corruption of a public official. The Department added:
That's particularly the case because there are mandatory referral requirements as well, so, for anything that fell within the commission's jurisdiction, every agency head would need to send those matters to the commission in the first instance. I think it's fairly readily apparent how problematic that would be, were you to capture that range of conduct. For external fraud alone, you just look at the sheer volume of those investigations undertaken by the AFP and other agencies— across the whole of the Commonwealth, 1,400 matters over three years. I think it would be fair to say that the commission would be then, potentially, quite distracted from its focus on serious or systemic corruption.
1.75
The Department said conduct that does not constitute corruption but which could adversely affect public administration will continue to be dealt with by existing law enforcement and integrity agencies:
This would include, for example, external frauds against the Commonwealth, and the investigation of offences relating to individuals or businesses misleading or deceiving public officials. This will ensure the Commission is not diverted from its core purpose of tackling corruption. The Commonwealth has well-established and effective arrangements for dealing with external fraud and other conduct that adversely affects the efficacy of public administration.
1.76
The Department advised that the AFP, the Australian Criminal Intelligence Commission, the Commonwealth Fraud Prevention Centre within the Attorney-General's Department, and the Commonwealth Director of Public Prosecutions work together address systemic fraud. The Department added that collusive tendering would be covered by the Australian Competition and Consumer Commission’s jurisdiction over cartel conduct.
1.77
The AFP said if they identify systemic weaknesses in the fraud control guidelines and processes of an agency, they will engage with that agency and provide advice.
Committee views
1.78
The Committee notes that the current definition of ‘corrupt conduct’ covers third parties to some extent and that existing arrangements deal with third party conduct that adversely affects public administration but that does not involve corruption of a public official.
1.79
Dr Haines, Deputy Chair of the Committee, and Senator David Pocock expressed the view that the clause proposed by Transparency International Australia to capture the corrupt conduct of third parties should be incorporated into the definition of ‘corrupt conduct’, noting that all Australian anti-corruption commissions other than Western Australia and Tasmania adopted wording similar to section 8(2A) of the NSW ICAC Act.
1.80
Senator Shoebridge endorsed the above views of Dr Haines and Senator Pocock. In addition, Senator Shoebridge further expressed the view that the appropriate jurisdiction for the NACC must include the power to investigate corrupt officials inside government as well as corporate players outside government who use their wealth and influence to corrupt public decision making.
1.81
Senator Shoebridge considered that consistent with this, there would be real benefit in an amendment to the Bill to allow the NACC to investigate matters of possible serious or systemic corruption where an inducement has been made by a private individual or corporation but was rebuffed or identified by the relevant public servant.
1.82
Senator Shoebridge expressed the view that Government, with the large resources available to it from contracts and grants, will always be a target by unscrupulous third parties, and equally, that changes to policy settings of the Commonwealth government, whether permissive or restrictive of certain activities like resource extraction or gambling, can provide enormous private windfall profits.
1.83
Senator Shoebridge was therefore of the view that the NACC’s jurisdiction should extend to all third-party corporations or other entities who seek to, or succeed in, establishing or altering government policy. This view was on the basis that often the largest commercial gains can be made by corporations, not through contracting with the government, but by altering or maintaining government policy.
1.84
Senator Shoebridge referred to a case in point being the fossil fuel industry currently benefits from in excess of $10 billion per annum in government subsidies through the maintenance of a series of policies such as the fuel tax credit scheme, accelerated depreciation rules and concessional excise rates. Senator Shoebridge was of the view that these benefits can dwarf profits made through contracts, and that it is therefore imperative that the NACC’s jurisdiction is expanded to capture instances of potentially corrupting conduct by third parties in relation to government policies.
1.85
The Coalition Committee Members were of the view that clause 8(1) of the NACC Bill should be expanded to reflect the approach of the Explanatory Memorandum regarding conduct that would not be considered partial. They proposed that a clause 8(1)(14) should be inserted, directly reflecting the second bullet point listed at paragraph 2.4 of the Explanatory Memorandum. The Coalition Committee Members considered that this would provide essential clarity and prevent legitimate election promises from being inappropriately considered as within the definition of corruption.
Definition of ‘corrupt conduct’ – clause 8(1)(e)
1.86
Criticism from key bodies was raised in relation to clause 8(1)(e) (concerning ‘corruption of any other kind’) limb of the definition or corrupt conduct.
1.87
The Law Council submitted that clause 8(1)(e) should either be deleted from the NACC Bill, or clarified by way of including an exhaustive list of the types of conduct that would be captured. Its concerns were expressed in the following terms:
‘corruption of any other kind’, as included in the NACC Bill, is undefined and circular and would benefit from clarification in order to assist decision-makers and any person who may be subject to the NACC’s jurisdiction. It submits that paragraph 8(1)(e) currently has the potential to extend the NACC’s jurisdiction into areas that are not contemplated in the Bill and unknown to Parliament.
it is unclear that the matters identified in the Explanatory Memorandum would not already fall within the conduct described in paragraphs 8(1)(a)-(d).
1.88
The Queensland Law Society agreed with this view, adding that ‘the extension of the definition to ‘corruption of any other kind’ will make it difficult, if not impossible, for a public official to know what conduct will be captured by this category’.
1.89
The Australian Human Rights Commission expressed similar views. It submitted that:
‘corruption of any kind’ provides the Commissioner with significant discretion to expand its jurisdiction without parliamentary approval.
clause 8(3) ultimately leaves the Commissioner with considerable discretion to decide what falls within the scope of ‘corruption of any other kind’. The Commission considers that any expansion of the Commissioner’s jurisdiction, particularly in response to emerging issues of corruption, should be a matter for Parliament. Alternatively, new specific limbs of corrupt conduct could be added to the jurisdiction of the NACC using disallowable instruments, with this function exercised by the Minister.
1.90
The Law Council also identified that there are no comparable provisions to paragraph 8(1)(e) of the NACC Bill in the Crime and Corruption Act 2001 (Qld), the Independent Broad-based Anti-corruption Commission Act 2011 (Cth) (Victorian IBAC Act) or the NSW ICAC Act.
1.91
The Law Enforcement Integrity Commissioner Regulations 2017 (Cth) (LEIC Act) provides in section 6 that a staff member of a law enforcement agency engages in corrupt conduct if the staff member, while a staff member of the agency, engages in:
a.
conduct that involves, or that is engaged in for the purposes of, the staff member abusing his or her office as a staff member of the agency; or
b.
conduct that perverts, or that is engaged in for the purpose of perverting, the course of justice; or
c.
conduct that, having regard to the duties and powers of the staff member as a staff member of the agency, involves, or is engaged in for the purpose of, corruption of any other kind.
1.92
The Australian Commission for Law Enforcement Integrity’s submission noted that the NACC Bill definition of corrupt conduct is broader than the current Law Enforcement Integrity Commissioner Act 2006 (Cth) definition, in particular in relation to limbs 1, 2 and 4.
1.93
The Committee asked the Attorney-General’s Department to identify examples of conduct which would fall within clause 8(1)(e), but which wouldn’t otherwise be captured by the definitions set out in clauses 8(1)(a) – (d). The Attorney-General’s Department were unable to provide any examples or hypotheticals of conduct which would fall into this category.
1.94
The Explanatory Memorandum contains examples of the types of conduct which may fall within the clause 8 definition, without specifying which of the specific limbs would apply. For example, the Explanatory Memorandum notes that:
An allocation of grants for the purpose of gaining political advantage, or to provide a benefit to a political donor may also be considered partial and within the definition of corrupt conduct. Such a situation may meet Mahoney JA’s third and fifth limbs of partiality. There would be an expectation that grants processes are generally conducted in the public interest and without regard to political considerations. A grants allocation that favours a political donor or confers another political advantage may also be extraneous to the power to give the grant.
Committee views
1.95
The Committee considers that the definitions of corrupt conduct in clauses 8(1)(a) – (d) are sufficiently broad to capture the types of corruption which are intended to be covered by the NACC Bill.
1.96
Acknowledging the submissions of the Law Council, Queensland Law Society and Australian Human Rights Commission, the Committee is concerned that the ‘catch-all’ provision in clause 8(1)(e):
a.
renders it difficult for a public official to have a clear understanding of the types of conduct intended to be covered by the legislation;
b.
confers unnecessarily broad discretion on the Commissioner to expand the scope of the legislation into areas not intended to be captured by the Parliament.
1.97
Although the LEIC Act contains such a provision, the other section 6 limbs are significantly narrower than the definitions contained in clauses 8(1)(a) – (d) of the NACC Act, which extend to broader areas including breach of public trust.
1.98
Unlike the concerns raised in respect of clause (8)(1)(a), which in the Committee’s view were comprehensively addressed by the Attorney-General’s Department, no clear or compelling examples were provided in relation to the retention of clause 8(1)(e).
1.99
The Committee therefore recommends that clause 8(1)(e) be removed from the NACC Bill.
1.100
The Committee also recommends that for the avoidance of doubt, the Explanatory Memorandum be clarified to identify that the examples of potentially corrupt conduct described therein fall within the clause 8(1)(a) – (d) limbs. Specifically, the Committee’s view is that the conduct referred to above could readily be captured by clause 8(1)(b) which defines corrupt conduct as a breach of public trust.
1.101
Senator Shoebridge and Dr Haines noted that the position of the Department was that the existing definition of corruption may cover the misuse of grant programs, ‘pork barrelling’ and political donations as serious or systemic corruption issues. Senator Shoebridge and Dr Haines also noted the evidence of the former NSW ICAC Commissioner the Hon Peter Hall, and the report of the NSW ICAC into pork barrelling named Operation Jersey.
1.102
Senator Shoebridge and Dr Haines expressed the view that given the level of public concern regarding the alleged misuse of billions of dollars of public grant funds, there is real merit in expressly addressing this in the definition of corruption. Senator Shoebridge and Dr Haines considered that there should be no ambiguity that the NACC will have the power to investigate the allocation of public funds and resources to targeted electors or electorates for partisan purposes where it meets the threshold of serious or systemic corruption.
1.103
In addition, Senator Shoebridge noted that the definition of corrupt conduct in clause 8(1)(e) of the NACC Bill provides that it includes ‘any conduct of a public official in that capacity that constitutes, involves or is engaged in for the purpose of corruption of any other kind’, and noted the concerns raised over this definition by the Law Council of Australia and the Queensland Law Society. Senator Shoebridge did not agree with the concern that this was a broad undefined extension of the NACC’s jurisdiction.
1.104
Senator Shoebridge expressed the view that clause 8(1)(e) is expressly limited to conduct that can be defined as ‘corruption’. It was therefore difficult in his view to understand why anyone would want to remove this jurisdiction from the NACC, nor was it clear what corruption should not be subject to the NACC’s oversight.
1.105
Senator Shoebridge noted that in his view, it was important to remember that the NACC’s jurisdiction can only be exercised by the NACC where the Commission believes there is, or is likely to be, serious or systemic corruption and there is a public interest in the investigation. Senator Shoebridge considered that critics of the proposed clause 8(1)(e) have failed to address this important fact and the further legislative prescriptions on the Commission’s exercise of its powers.
1.106
Senator Shoebridge referred to the experience from other jurisdictions, most notably in relation to the Victorian IBAC, which he observed indicated that legal hurdles in a corruption commission’s founding legislation are repeatedly exploited by high wealth targets of corruption investigations. Senator Shoebridge considered that any attempts to limit this aspect of the definition will weaken the corruption test, and believed that doing so is likely to be of most benefit to targets with highly paid lawyers without delivering public interest outcomes.
1.107
In the view of Senator Shoebridge, any additional complications to this test will enable powerful and cashed-up targets more opportunities to frustrate the work of the NACC with spurious legal challenges, and they therefore did not consider that clause 8(1)(e) should be deleted.
Ability to investigate past conduct
1.108
The Commissioner would have jurisdiction to investigate serious or systemic corrupt conduct that occurred before the NACC was established.
1.109
The Attorney-General’s Department said:
For the Commissioner to undertake a criminal investigation, the conduct in question would need to have constituted a criminal offence at the time it was undertaken. For non-criminal investigations, the definition of corrupt conduct in the NACC Bill reflects long-standing expectations of public officials, including the expectation that public officials will not abuse their office or breach the public trust.
1.110
Submissions were generally supportive of the Commissioner’s ability to investigate past conduct. The Accountability Round Table noted that there had been a lot of misplaced criticism of the NACC as involving retrospectivity, and identified that any criminal proceedings arising from NACC investigations would have to be conducted under the laws in place at the time of the alleged offences.
1.111
However, some submissions expressed concern in relation to the jurisdiction over past conduct.
1.112
The Law Council suggested limiting the Commissioner’s jurisdiction over past conduct by either including an additional public interest test requirement or requiring the Commissioner not to investigate prior conduct where the conduct occurred at too remote a time to justify investigation.
Committee views
1.113
The Committee considers that the Commissioner should be able to investigate past conduct, and does not consider that any additional thresholds or other requirements should be inserted into clause 8(4). Investigations, regardless of their temporal nature, should be subject to a consistent legislative framework.
1.114
The Coalition Committee Members expressed the view that whilst past conduct should be able to be investigated by the NACC, there should be a public interest test requirement. They referred to the evidence of the Law Council of Australia in support of this amendment, and noted that it was in line with their policy on investigating past conduct by former judicial officers.
Definition of ‘corruption issue’ – clause 9(1)(c)
1.115
Clause 9 in the NACC Bill defines a ‘corruption issue’ as an issue of whether a person:
has already, at some time in the past, engaged in corrupt conduct as defined in clause 8,
is currently engaging in corrupt conduct, or
will, at any time in the future, engage in corrupt conduct.
1.116
In the Explanatory Memorandum the definition of ‘corruption issue’ is described as a key concept that would establish the scope of the NACC’s jurisdiction. The Explanatory Memorandum states:
The Commissioner would only be empowered to deal with a corruption issue. A corruption issue is a question about potential corrupt conduct (see clause 8) that arises for potential investigation on the basis of an allegation or other information that suggests a person may have engaged in corrupt conduct, or is engaging or will engage in that conduct. The purpose of the investigation would be to test any allegation and, where appropriate, make an assessment on the corruption issue, that is, to determine whether the person engaged in the alleged corrupt conduct or is engaging or will engage in that conduct.
1.117
The Attorney-General’s Department said clause 9 operates in conjunction with the definition of corrupt conduct in clause 8:
Sections 8 and 9 work together to link through to how the commission then exercises its powers and functions, so it's more a technical operation between the two. They're not expanding out the definition, per se. It's just that what the commission does is deal with corruption issues. The intention of section 9 is to make sure it can look into corruption in different temporal aspects.
1.118
The Law Council said that clause 9(1)(c) should be removed entirely, as its inclusion may be unnecessary given the definition of ‘corrupt conduct’ extends to conduct constituting conspiracy or attempt to engage in corrupt conduct. The Law Council added:
…there are likely to be significant issues arising from requiring an assessment to be made that a person will engage in such conduct, and with that person being subsequently accused, investigated and potentially penalised for conduct which has not occurred.
1.119
The Attorney-General’s Department said that clause 9(1)(c) is fundamental to how the NACC uses its powers and relates to the operation of mandatory referral obligations:
…the importance of section 9 is it's an issue about 'whether'; that is where the emphasis is in that clause. Otherwise, you end up with a situation where things like the 'dealing with corruption issues' provisions, if you had just 'corrupt conduct' there, you would have to identify that it was corrupt conduct before you could then investigate whether there was corrupt conduct, if you like. It would make the commission's powers non-functional, so section 9 does very important work in making it clear it's about the issue of 'whether' there is.
1.120
Mr Bruce McClintock SC agreed that it is necessary to retain clause 9(1)(c). Mr McClintock said conspiracy and attempt do not exhaust all possibilities of future conduct:
Both concepts have highly technical legal definitions which undoubtedly will be applied by the courts which would restrict the reach of the provisions. A further reason is that such a definition is necessary to give power to the National Anti-Corruption Commission to enable it to intervene prior to the actual commission of an act of corrupt conduct. That is a clear public benefit.
Committee views
1.121
The Committee considers that clause 9(1)(c) should be retained in its current form.
1.122
The Coalition Committee Members expressed the view that clause 9(1)(c) of the NACC Bill allows the Commission to investigate possible future ‘corrupt conduct’, and that this raises issues with respect to determining whether a persons will engage in corrupt conduct, and if a person is accused and investigated for such conduct, how a person may face penalties for corrupt conduct that did not occur.
1.123
The Coalition Committee Members were of the view that clause 9(1)(c) should be deleted, and noted that the Law Council of Australia and Queensland Law Society supported the removal of this clause.
Independence
1.124
Part 10 of the NACC Bill provides for two separate mechanisms to oversee the NACC:
a.
a Parliamentary Joint Committee on the NACC (PJC-NACC); and
b.
an Inspector of the NACC.
1.125
This section considers the PJC-NACC. The Inspector’s role is addressed in ‘Oversight’ below.
1.126
Pursuant to clause 172 of the NACC Bill, the PJC-NACC would consist of 12 members: six Senators appointed by the Senate and six members of the House of Representatives. The six members to be appointed by each of the Senate and House of Representatives must consist of three members of Government, two members of the Opposition, and one member of the Parliament who is a member of neither the Government nor the Opposition.
1.127
Clause 173 of the NACC Bill provides that there must be a Chair of the PJC-NACC, who must be a member of the Government elected by the members of the PJC-NACC. The Explanatory Memorandum states that ‘this is consistent with arrangements for other legislated joint committees, such as the Parliamentary Joint Committee on Intelligence and Security’. At meetings of the PJC-NACC at which the Chair is present, the Chair would have a deliberative vote, and would have a casting vote if votes are equal.
1.128
The Explanatory Memorandum notes that ‘similar functions are conferred on comparable Parliamentary Joint Committees, for example the Parliamentary Joint Committee on Law Enforcement and the Parliamentary Joint Committee on the Australian Commissioner for Law Enforcement Integrity’.
1.129
To preserve the independence of the NACC, the PJC-NACC is not authorised to reconsider decisions or recommendations made by the Commissioner, or review decisions made or operational activities carried out (and associated matters).
1.130
The Committee heard differing views regarding the PJC-NACC, in particular in relation to:
a.
its budgetary review and monitoring function; and
b.
its power to appoint Commissioners, Deputy Commissioners and Inspectors.
Budget and additional funds
1.131
The Attorney-General’s Department noted that ‘the Government has fully funded the Commission, committing $262.6 million over four years to support its establishment and operation’.
1.132
As noted above, the functions of the PJC-NACC include to review the NACC’s budget and finances and report to the Parliament on the sufficiency of the NACC’s resourcing to effectively perform its functions. The Explanatory Memorandum states that:
This would ensure a regular mechanism for external review of the sufficiency of the NACC’s budget and staffing levels, ensuring the government and Parliament have clear advice on the sufficiency of the NACC’s budget and staffing levels, ensuring the government and Parliament have clear advice on the sufficiency of the NACC’s budget over time. It would also be an additional safeguard to hold future governments accountable for budget decisions regarding the NACC.
1.133
The Committee heard differing views about whether the PJC-NACC’s budgetary oversight function was sufficiently independent or otherwise appropriate.
1.134
The Hon Peter Hall KC, expressed the view, with reference to his experience in the NSW context, that:
funding must be objectively independent of the executive government.
1.135
The Hon Robert Redlich, Commissioner of the Victorian Independent Broad-Based Anti-Corruption Commission (Victorian IBAC), similarly expressed the view that:
Consideration of funding for Independent Officers of Parliament ought to be the responsibility of an independent statutory commission/tribunal, similar to the current Victorian Independent Remuneration Tribunal, with all evidence, reasoning and recommendations to the Treasurer being tabled in Parliament to promote full transparency.
1.136
The Hon Dennis Cowdroy AO KC described his experience of identifying – after the ACT Integrity Commission was founded – that the budget allocation was inadequate. He indicated that the ACT Commission approached the government and had no difficulty in securing the funding required.
1.137
The Accountability Round Table considered that the Parliamentary Budget Office should review and evaluate the content and adequacy of the NACC’s budget and finances annually, and the Centre for Public Integrity submitted that accountability institutions like the Commission should be funded via an Independent Tribunal. The Centre for Public Integrity proposed alternatively that the Minister should be required to table in the Parliament a statement of reasons for any deviation from a funding recommendation by the PJC-NACC.
1.138
The Attorney-General’s Department noted that the budgetary arrangements in respect of the NACC reflect those applicable to all Commonwealth integrity agencies:
I'd say that agencies are funded in general for their workload, usually. But also, as you would expect, given that we've got a democratically elected government in parliament and that appropriations are dealt with and put forward by the government for all Commonwealth entities, the same process would be followed in this instance. The same arrangements apply to all Commonwealth integrity agencies, irrespective of the nature of inquiries they're undertaking.
1.139
The Auditor-General also provided information to the Committee about the budgetary setting process for the Australian National Audit Office (ANAO), including that the ANAO has a statutory obligation to inform the Expenditure Review Committee of the agency’s request in relation to its budget position in a proactive manner.
1.140
In response to a question on notice regarding the scope within the NACC Bill’s provisions for draft budget estimates or forward-looking estimates to be considered by the PJC-NACC (akin to the process for the ANAO), the Attorney-General’s Department provided the following response:
Paragraph 177(1)(g) of the NACC Bill provides the Committee with a broad function to review the Commission’s budget and finances. Clause 176 of the Bill provides for the powers and proceedings of the Committee to be determined by resolution of both Houses of the Parliament.
Provided that the Houses of the Parliament resolve to provide the Committee with the powers to call witnesses and require the production of documents, this would allow the Committee to require the Commission to provide information on the Commission’s budget and finances, and to determine the time in which the Commission must respond. This is broad enough to allow the Committee to request forward-looking information on the Commission’s future funding requirements and budget sufficiency, and to require that information be provided in advance of the Budget if the Committee is so inclined.
The Commission’s ability to produce draft Budget estimates (prior to their release as part of normal processes) would be subject to ordinary considerations relating to public interest immunity.
1.141
The Committee considers that the scope of clause 177 is sufficiently broad to allow the PJC-NACC to adopt a forward-looking budget estimates process, akin to that attending the ANAO. The provision as presently drafted also ensures that the Committee can consider the adequacy of the NACC’s budget at any stage, including pro-actively or retrospectively.
1.142
The Committee also notes that the proposed funding model for the NACC is consistent with the manner in which appropriations are dealt with for all Commonwealth entities.
1.143
The Committee therefore does not recommend any changes to the provisions of the NACC Bill regulating the oversight of the NACC’s budget.
1.144
Dr Haines, Deputy Chair of the Committee, and Senator David Pocock, noted that the requirement for budgetary independence for the NACC differs from other Commonwealth integrity agencies given the subject matter of the NACC’s functions, and the vital public interest in ensuring transparency over the adequacy of the NACC’s funding.
1.145
In light of the compelling evidence from experienced Commissioners of the NSW and Victorian anti-corruption commissions regarding the importance of budgetary independence to protect the functions of the NACC, Dr Haines and Senator Pocock saw value in ensuring the Government of the day is transparent about providing appropriate funding for the NACC by strengthening oversight of the budget of the NACC by implementing one or more of the following measures:
a.
requiring the Minister to table in Parliament a statement describing any difference between the Commission’s request for funding and the funding appropriated by the Government, as recommended by the Centre for Public Integrity;
b.
requiring the PJC-NACC’s review of the NACC’s budget to take place on a statutory timetable of every 12 months;
c.
adopt a similar statutory obligation to the ANAO, including that the ANAO has a statutory obligation to inform the Expenditure Review Committee of the Agency’s request in relation to its budget position in a pro-active manner.
1.146
Senator Shoebridge endorsed Dr Haines’ and Senator Pocock’s views on budgetary independence. Senator Shoebridge further noted the commitment of $262 million to the NACC over 4 years in the most recent budget, but expressed the view that there is no express independent budget process in place to ensure adequate funding is provided moving forward. Senator Shoebridge considered that the structure of the PJC-NACC does not adopt best practice for recommending and reviewing budgetary independence, and that whilst the PJC-NACC has the power under clause 177 of the NACC Bill to ‘review the NACC’s budget and finances’, it does not include the comparable provisions for the Public Accounts and Audit Committee in relation to the ANAO’s budget. Relevant provisions are as follows:
PUBLIC ACCOUNTS AND AUDIT COMMITTEE ACT 1951 – SECT 8
Duties of the Committee
(1) The duties of the Committee are:
[…]
(j) to consider draft estimates for the Audit Office submitted under section 53 of the Auditor-General Act 1997; and
[…]
(l) to make recommendations to both Houses of Parliament, and yo the Minister who administers the Auditor-General Act 1997, on draft estimates referred to in paragraph (j); and
[…]
AUDITOR GENERAL ACT 1997 – SECT 53
53 Joint Committee of Public Accounts and Audit may request draft estimates for Audit Office
(1) The Joint Committee on Public Accounts and Audit may request the Auditor-General to submit the Committee draft estimates for the Audit Office for a financial year before the annual Commonwealth budget for that financial year.
(2) The Auditor-General must comply with the request in time to allow the Committee to consider the draft estimates and make recommendations on them before the budget.
1.147
Senator Shoebridge considered that the ability to proactively consider the budget bids of an integrity agency before they are taken through the otherwise secretive Expenditure Review process of the Executive is crucial to provide budget independence. He noted that while the Attorney-General’s Department has indicated that there is nothing to expressly restrict the PJC-NACC from seeking the draft estimates, in his view the lack of an express power and obligation to do so is problematic.
1.148
He therefore saw value in the model that applies to the ANAO, and noted that that agency acknowledged that this process was effective and responsible and has protected the financial independence of the ANAO for decades.
1.149
Senator Shoebridge was of the view that these same provisions should be included in the NACC Bill, noting that they support independence, transparency and will not impose significant additional burdens on the system.
Appointments
1.150
The PJC-NACC would approve or reject the Minister’s recommendation for the appointment of the Commissioner, a Deputy Commissioner and the Inspector.
1.151
The Committee notes that some submitters and witnesses considered that appointments to those roles should be subject to a vote requiring a special majority of the PJC-NACC, or alternatively, a majority including either at least one member of the opposition or both independents.
1.152
Transparency International Australia submitted that a special majority of the PJC-NACC should be required to approve the proposed appointments of the Commissioner, Deputy Commissioners and the Inspector, rather than a simple majority (e.g. Government members alone with casting vote) as is presently the case.
1.153
The Committee received and heard evidence from current and former Commissioners and Inspectors of state and territory anti-corruption bodies, whose views about the necessity of an independent body for appointments diverged.
1.154
The Hon Robert Redlich expressed the view that:
IBAC supports the recommendations of both the COAT and the Grattan Institute that appointments to Tribunals and similar positions need to be open, merit-based and transparent, with selection based on an independent panels assessment of applicants’ merit against publicly available criteria, and is also supportive of the Grattan Institutes recommendation that such processes be legislated.
The fact that the balance of power in both the Committee and the IOC in Victoria rests with the Government of the day has the potential to adversely impact public confidence in the independence of such vital institutions. For this reason, IBAC considers that the Bill ought to include an express provision such as that outlined in the COAT Best Practice Guide:
“Appointments are made in the public interest without regard to a political or other purpose outside the objects of the Act”.
1.155
The Hon Ann Vanstone KC, Commissioner of the South Australian Independent Commission Against Corruption, stated in response to a question about the composition of the Committee required to sign off on appointments, that:
Of course, I was appointed by the recommendation of the Attorney to the government, and our statutory officers committee approved my appointment, so I'm not in a position to claim that there should be some sort of different mechanism whereby the government is denied the opportunity of appointing a commissioner. I suspect that in the long run it wouldn't make much difference, frankly. I think there are a small band of people in Australia who will be attracted to the work of integrity agencies and will have the requisite experience and knowledge, and I suspect, as I said, that in the long run it won't make much difference which route is taken. They'll pick themselves, in effect.
1.156
Mr Bruce McClintock also described his experience, noting that he did not have a strong view about the matter either way:
Based on my experience I have to say that the model in New South Wales and in the Northern Territory is a government chair. The government has the majority in the reps or the legislative assembly and therefore has the power. I have honestly never noticed any political bias whatever in their conduct or supervision of my office and of the ICAC—not at all. I have only ever seen a desire on the part of the members of the committee to do the very best they can by the agencies in question. I have not agreed with everything that they have said, but I've never had any cause to doubt their sincerity or to think that the fact there is a government majority or a government chair has impacted on their role at all. In many ways, depending on what has actually been happening with the agency, you will find government members are the more hostile towards the agency than the opposition or the crossbench members.
I think that is one of those areas that looks significant now but probably will not turn out to be significant. I could be wrong. Perhaps something might be said in favour of removing the possibility right now, but based on my experience I don't have a strong view about it. I had appeared in parliamentary committees as a witness before commencing to deal with the New South Wales one in 2017, and one of the things I learned is what a powerful instrument for democracy the committee system is. I have been really, really impressed. I don't think there would be any difference in this place than there would be in New South Wales. I really don't. I'm not quite sure whether that was the answer you wanted.
1.157
The Committee expects that the process for appointing Commissioners, Deputy Commissioners and Inspectors to the NACC will be consultative and collaborative, to ensure that any appointments have the broad-based support and endorsement of the Parliament.
1.158
The Committee notes the differing perspectives on this issue, and does not recommend any changes to these provisions in the NACC Bill.
1.159
Dr Haines, Deputy Chair of the Committee, and Senator David Pocock, noted that under the NACC Bill as it stands, the Chair of the NACC will always be a member of the Government, and has a deliberative vote and if required the casting vote. This concentrates the power of the Executive in the Chair on important decisions, including the appointment of Commissioners.
1.160
Dr Haines and Senator Pocock saw value in strengthening the independent oversight of the NACC by the PJC-NACC by implementing one or more of the following measures:
a.
requiring a ‘special majority’ of members to approve the nomination of the Commissioner, the Deputy Commissioners and the Inspector, with at least two non-Government Members of the Committee voting in favour of the appointment, as recommended by Transparency International Australia;
b.
requiring at last two thirds of members to approve the nomination of the Commissioner, the Deputy Commissioners and the Inspector, with at least two non-Government Members of the Committee voting in favour of the appointment.
1.161
The Coalition Committee Members were of the view that a super majority (9/12) of the PJC-NACC should be required to appoint the Commissioner and the Inspector, with a safeguard of a House override if a stalemate occurs – they considered that bi-partisan confidence in the positions of Commissioner and Inspector is essential.
1.162
Senator Shoebridge endorsed the views of Dr Haines and Senator Pocock on the PJC-NACC. Senator Shoebridge further expressed the view that in order for the NACC to function effectively, it requires a system of independent Parliamentary oversight. He considered that the current model with a Government dominated committee fails to deliver this. Allowing the Government to have half the membership of the committee and the casting vote of the Chair means the Government of the day will have effective control of the committee. This means it will be harder for the committee to function as a truly independent body for oversight purposes.
1.163
Senator Shoebridge referred to the evidence of the Hon Robert Redlich, who stated in his evidence to the Committee:
It's less than satisfactory, in my respectful view. The bill proposes, as I follow the arithmetic, that the parliamentary committee of the NACC comprise six members of the party in government at any given point of time, four members of the opposition and two members from neither the governing party nor the primary party in opposition, and, in addition, that the chair of the committee should be a member of the party in government. With respect, that is an unsatisfactory formulation of the composition of the parliamentary committee, because it exposes the independent officers of the department, such as the Integrity Commissioner, and it exposes the commission to the risk, that is always there, of political interference.
1.164
Senator Shoebridge saw merit in these observations, and expressed the view that a more balanced structure would be provided by the inclusion of a non-government Chair, rotating through non-government parties across the term of a Parliament.
Commissioner own motion investigations
1.165
Clause 40 of the NACC Bill provides that the Commissioner may deal with a corruption issue that is either referred to the Commissioner, or which the Commissioner becomes aware of in ‘any other way’.
1.166
The Explanatory Memorandum expresses an intention that the words ‘any other way’ ensure that the Commissioner can deal with corruption issues of their own initiative. The Attorney General’s Department also stated at a hearing before the Committee that the Commissioner would have ‘discretion to commence investigations on its own initiative’.
1.167
The importance of own motion investigations was recognised in a submission from the NSW Council of Civil Liberties, which observed that this was:
critical to the independence of the NACC and its ability to act as an effective check on corruption. Without such a power, the NACC could not be considered a properly independent body.
1.168
However, the Committee benefited from the submission and testimony of the Centre for Public Integrity which identified that:
While the Explanatory Memorandum is clear that this provision is intended to empower the Commission to also act on its own motion, it is unusual for the legislation not to include a specific own motion power. Insofar as this is a critically important power, it would be preferable to include a separate own motion provision (as state and territory commission legislation does).
Committee views
1.169
The Committee agrees with the submissions and testimony which identified that this is a ‘critically important power’, which ensures that the Commissioner can decide to pursue an investigation regardless of the circumstances in which information came into their possession or knowledge.
1.170
The Committee therefore recommends that words to the following effect be inserted in clause 40(1)(b) of the NACC Bill:
a.
The Commissioner may deal with a corruption issue that:
i.
is referred to the Commissioner; or
ii.
the Commissioner becomes aware of in any other way, including that the Commissioner may deal with a corruption issue on their own initiative.
Comprehensive powers
Powers to hold hearings
1.171
A key issue during the Committee’s inquiry related to the NACC’s powers to hold public and private hearings.
1.172
The Committee notes diverse views were heard, with different positions presented on the following issues:
the default setting for hearings to be held in private or public;
the threshold test underpinning the Commissioner’s ability to hold a public hearing; and
the factors to be considered in deciding to hold a public hearing, and whether consideration of these factors should be discretionary or mandatory.
1.173
Clause 63 of the NACC Bill provides the Commissioner with powers to summon persons to appear before the Commission at a hearing and answer questions.
1.174
Subclause 73(1) of the NACC Bill contains a presumption that hearings will be held in private. Under subclause 73(2), the Commissioner may decide to hold a hearing, or part of a hearing, in public if the Commissioner is satisfied that it would be in the public interest and that exceptional circumstances justify doing so.
1.175
Subclause 73(3) sets out a non-exhaustive list of factors the Commissioner may have regard to in deciding whether to hold a hearing, or part of a hearing, in public. These are:
a.
the extent to which the corruption issue could involve corrupt conduct that is serious or systemic;
b.
whether certain evidence is of a confidential nature or relates to the commission, or to the alleged or suspected commission, of an offence;
c.
any unfair prejudice to a person’s reputation, privacy, safety or wellbeing that would be likely to be caused if the hearing, or the part of the hearing, were to be held in public;
d.
whether a person giving evidence has a particular vulnerability, including that they are under the direct instruction or control of another person in a relative position of power;
e.
the benefits of exposing corrupt conduct to the public, and making the public aware of corrupt conduct.
1.176
Clause 74 of the NACC Bill requires certain evidence to be given in private, if giving the evidence would breach a secrecy provision, or would disclose:
legal advice or legally privileged communications;
information that the Commissioner is satisfied is ‘sensitive information’;
information that is covered by a certificate issued by the Attorney-General under clause 235 of the NACC Bill, on the basis that the public disclosure of the information would be contrary to the public interest on certain, specified grounds; or
‘intelligence information’.
1.177
The Attorney-General’s Department submitted that private hearings will often be more appropriate than public hearings, for example, where:
the hearing is being conducted at a relatively early stage of an investigation, where a commission is seeking to establish key facts; or
the person appearing before a commission is a whistleblower or witness of fact, rather than the subject of the investigation, and the risks to the person’s reputation, safety or wellbeing from holding a public hearing outweigh the benefits of a public hearing.
Public and private hearings
1.178
The Committee received evidence in support of the NACC Bill as drafted in relation to clauses governing hearings.
This is particularly relevant to ensure procedural fairness and the integrity of criminal investigations, should a matter subsequently proceed to a criminal prosecution…We suggest the NACC Bill does appropriately allow for this factor to be taken into consideration by the NACC Commissioner.
1.180
While some submissions expressed support for hearings to be held in public by default, the Committee notes that Australian jurisdictions generally default to private hearings.
1.181
Mr Greg Melick, noted that in Tasmania ‘the hearing is in public, unless we determine it appropriate to have it in private’. He added:
But my view is that hearings should be held in private unless there are exceptional circumstances. …when you commence an investigation, you don't know where it's going… A witness in a public hearing could come out with something completely unexpected, which would be incredibly unfair and prejudicial to the person being investigated.
1.182
The Law Council noted public anti-corruption hearings incorporate extraordinary powers of compulsion, no right to silence or privilege against self-incrimination, no rules of evidence, no underlying guarantee of legal representation, and no standard of proof for findings and opinions made by the Commissioner. As such, the Law Council’s position is that hearings should generally be conducted in private, unless the Commissioner considers that a private hearing would be unfair to the person or contrary to the public interest.
1.183
In addition to procedural fairness considerations, the Committee heard concerns regarding wellbeing, mental health and the need to not cause undue damage to a person’s reputation and career as important considerations for holding hearings in public or private. The South Australian Bar Association said:
Corruption Commissions across the country have extraordinary powers. Terrorism suspects are given more rights when criminal charges are brought against them than a public servant who is brought before an anti-corruption commission. Without adequate safeguards, corruption commissions have the capacity to operate as a Star Chamber and to have consequences that are significant and irreparable. These is no right to silence. The right against self-incrimination is lost. If you decline to answer questions you can be held in contempt and then gaoled.
1.184
The Queensland Law Society submitted that while public hearings may ‘operate to deter corrupt conduct’, they can have lasting consequences for individuals, ‘even in circumstances where the investigation results in no adverse findings or criminal charge’. The submission added that the threshold should be ‘sufficiently high to negate them becoming political and media ‘show trials’.’
1.185
The Community and Public Sector Union said:
The [Community and Public Sector Union] recognises the importance of the NACC’s ability to hold public hearings and investigations, however the NACC must be required to have due regard to protecting unfair prejudice to a public servant’s reputation, privacy, safety or wellbeing when called to give evidence. The [Community and Public Sector Union] notes that such factors form part of the Bill’s relevant considerations in determining whether a hearing is to be held in public. It is critical the legislation retains such safeguards in relation to the exercise of discretion to holding public hearings.
1.186
The Committee heard that the ability to hold public hearings in appropriate circumstances is a critical power that is necessary for a corruption body to be effective and to be seen to be effective. Reasons given for why public hearings are important included the following:
improving transparency, accountability and public trust;
public education and exposure of allegations of corruption;
allowing witnesses to vindicate their reputation when they have been the subject of unsubstantiated claims;
encouraging witnesses to come forward; and
1.187
In his evidence to the Committee, Mr Greg Melick said:
In my view, the rare times in which you should have a public hearing are, firstly, when there's no chance of criminal proceedings flowing therefrom; secondly, when you consider that the public hearing may bring to light evidence that people aren't aware of and cause other people to come forward; and, thirdly, and probably most importantly, when it's for the purpose of educating the community.
1.188
Mr John Hatzistergos, Chief Commissioner, NSW ICAC, said that public hearings can be a way of encouraging people to bring new evidence forward. He said:
The classic example of that was Operation Dasha. You might recall that was an investigation that started off in relation to affairs at Canterbury council and then morphed into an investigation extending to members of parliament. That all emerged during the course of the public enquiry; it was not information that we had acquired initially when we started that operation.
1.189
Mr Hatzistergos added: ‘I beg to differ with people who think you can make findings against people— serious findings—'in private’.’
1.190
The Committee notes that clause 76 allows a witness to request a private hearing, however there is no provision for a similar right for a witness to request a public hearing. Professor Anne Twomey, for example, submitted that such a right should be provided, in the event a witness wishes to openly respond to an allegation made against them.
1.191
The Coalition Committee Members expressed the view that it would be unfair to apply court-like transparency without court-like rules of evidence. In their view, default public hearings would risk compromising national security, the prospect of future criminal trials, and would unnecessarily magnify the stress and shame placed on individuals (and their families).
1.192
A major concern of the Coalition Committee Members with public hearings is the impact to a person’s mental health, particularly the possibility of suicidal ideation or suicide as a result of appearing before a public hearing where one’s identity, integrity and person may be tarnished. Coalition Committee Members noted in particular that Australian Defence Force members will be subject to the NACC’s jurisdiction (unlike in some state and territory anti-corruption commissions), and this raises particular concerns in their view. They pointed to evidence of the Australian Psychological Society which they considered particularly persuasive in this regard:
With the ADF members, we see high rates of PTSD and trauma in that group anyway, so they might be a group that is at higher risk and likely to have more severe mental health issues.
Just on the identity: someone’s job and position and profession is core to their identity, and, when that identity is attacked, it attacks the core of that person, and it’s that attack that leads to the decline in mental health because then the person is left asking: ‘Who am I? What is my purpose? What is my role?’. When it’s within a public hearing, I think that there is a lot of shame around that, and that kind of public hearing, or social media or media, sort of amplifies that shame.
1.193
For these reasons, the Coalition Committee Members support the retention of the ‘exceptional circumstances’ test, with further safeguards.
1.194
The Coalition Committee Members also expressed the view that the decision to hold a public hearing should be required to be approved by the Commissioner and a Deputy Commissioner, and to be notified to the Inspector.
1.195
The Coalition Committee Members considered that requiring both the Commissioner and Deputy Commissioner to sign off on such a decision would align the NACC with the NSW ICAC Act, which has a very similar provision. The Members considered that introducing such a provision could reduce the risk of ‘personal idiosyncrasy’ and ensure the NACC is protected when decisions to hold public hearings are made.
1.196
The Coalition Committee Members noted that in Victoria, IBAC is required to inform the Victorian Inspectorate of its intention to hold public hearings and the reasons why. They considered that this ensures appropriate oversight of issuing notices for public hearings, as the Victorian Inspectorate is provided with IBAC’s reasoning for holding a public hearing before summons are issued, and allows the Inspectorate to scrutinise IBAC’s reasoning.
1.197
The Coalition Committee Members noted that this view was wholly or partially supported by Dr James Renwick CSC SC, the Victorian Inspectorate, The Centre for Public Integrity, The Samuel Griffith Society and the Australia Institute’s National Integrity Committee.
‘Exceptional circumstances’ threshold
1.198
The Committee heard from a range of views on the ‘exceptional circumstances’ threshold for public hearings in clause 73.
1.199
The Committee heard that the ‘exceptional circumstances’ and ‘public interest’ tests for public hearings in the NACC Bill appears to draw upon aspects of section 117 of the Victorian IBAC Act. The NSW ICAC Act, by comparison requires that it only be in the ‘public interest’ to conduct a public inquiry, and provides a non-exhaustive list of factors which are required to be considered when determining this question.
1.200
Conversely, section 35 of the Northern Territory’s Independent Commissioner Against Corruption Act 2017 (NT) requires that examinations must be held in private, and section 3(3) of the Independent Commission Against Corruption Act 2012 (SA) require that an examination for the purpose of an investigation into corruption must be held in private.
1.201
Some submissions drew attention to the incidence of public hearings in NSW as compared to Victoria. The 2020-2021 Annual Report of the NSW ICAC noted that in that year, the Commission conducted 85 compulsory examinations over 72 days and three public inquiries over 68 days. The 2020-2021 Annual Report of the Victorian IBAC noted that in the same year, IBAC conducted 47 days of private examinations and held 31 days of public examinations.
1.202
The Australia Institute’s National Integrity Committee’s submission noted that the NSW ICAC held 45 public hearings from 2012 to 2021, releasing 44 public reports over this period. Over the same period, the Victorian IBAC held only five public hearings and released 15 public reports. It also noted however that Victoria’s IBAC is responsible for taking complaints about misconduct by Victoria Police personnel, whereas in NSW, most police conduct is not within the jurisdiction of the ICAC – and that therefore, a one-to-one comparison of budget, staff and the ratio of private examinations to public hearings between IBAC and ICAC is not possible.
1.203
The Law Council raised there has been some judicial consideration of the exceptional circumstances and public interest test under the Victoria IBAC Act. Of particular relevance was the decision of R and M v IBAC, determined by the Supreme Court of Victoria Court of Appeal and upheld by the High Court of Australia. With respect to ‘exceptional circumstances’, Priest, Beach and Kaye JJA found that ‘as a matter of ordinary usage, in order to be ‘exceptional’, circumstances must be highly unusual, and quite rare’.
1.204
Some evidence supported the default setting of private hearings and the ‘exceptional circumstances’ test. The Australian Federal Police Association’s submission noted:
…the definition of ‘exceptional circumstances’ will evolve over time, and initially that there might not be an agreed consensus on what qualifies as ‘exceptional’. Common sense discussions will play a large part in forming a ‘benchmark’.
1.205
The Australian Federal Police Association also supported greater clarity being provided in the Bill as to the definition of ‘exceptional circumstances’, so that it is clear that the definition applies in a uniform manner to all persons covered by the Act, and so that the test can’t be ‘watered down’.
1.206
A number of submitters and witnesses commented on the ‘exceptional circumstances’ test and the potential for this threshold to undermine public trust in the NACC and the principle of transparency.
1.207
Professor Twomey submitted that as ‘exceptional circumstances’ is a ‘very high hurdle, it can confidently be predicted that almost all hearings will be in private’.
1.208
The Hon Robert Redlich submitted that:
The NACC must be permitted to hold public examinations without a requirement for exceptional circumstances, so long as there is a specific provision that the Commissioner cannot call a witness unless satisfied that there is no unreasonable damage to reputation and that there will be no damage to the witness’s welfare.
1.209
The Committee also heard concerns about the vagueness of the term ‘exceptional circumstances’, which is not currently defined in the NACC Bill.
1.210
The Committee was advised that the lack of certainty about how to satisfy the requirement may mean that a decision to hold a public hearing may result in ‘tactical litigation or inaccurate political expectations’. The lack of certainty about what would be required to satisfy the requirement may mean that a decision by the Commissioner to hold a public hearing may be subject to judicial review, resulting in additional delay and costs.
1.211
In this regard, the Committee was assisted by the submission of Dr James Renwick, who considered that the risk of a successful challenge to hold a public hearing is small, given that the Commissioner’s satisfaction of the clause 73(2) provisions would be a jurisdictional fact, and High Court authority (Minister for Immigration and Multicultural Affairs v Eshetu [1999] HCA 21 at [137]) states that:
where the criterion of which the authority is required to be satisfied turns upon factual matters upon which reasonable minds could reasonably differ, it will be very difficult to show that no reasonable decision-maker could have arrived at the decision in question.
1.212
Additionally, the Committee notes that a similar provision exists in the Victorian IBAC Act. Of the 10 public hearings held by IBAC from 2014-2015 to 2021, only one case has substantively considered the exceptional circumstances threshold as a preconditions to public examinations. It is worth noting that in that case, other grounds of the application included a challenge to whether the relevant legislation authorised any examination of persons under investigation with respect to matters the subject of the investigation, and a challenge to the Commissioner’s conclusion that the public interest threshold aspect of the public hearings test was met.
1.213
A number of submissions and witnesses suggested that if the ‘exceptional circumstances’ threshold was retained, greater clarity should be provided in the NACC Bill to define what is meant by the term. The Community and Public Sector Union indicated that they were open to the idea of there being some greater clarification in the legislation in relation to defining ‘exceptional circumstances.’
1.214
Transparency International Australia submitted that if the term was retained, it should be defined to mean:
on balance the circumstances are such that it is (a) either necessary or preferable, and (b) appropriate, for evidence to be given in public rather than in private (or similar).
1.215
The Attorney General’s Department was questioned on when the ‘exceptional circumstances’ test was added to the draft legislation. In response the Attorney General’s Department indicated in the public hearing that they had referred the issue to the Attorney-General, and he was considering a public interest immunity claim.
Safeguards
1.216
In relation to the ‘exceptional circumstances’ test, the Committee heard that greater consideration should be given to strengthening safeguards that ensure evidence is given in private where a public hearing might prejudice a person’s safety or wellbeing, or actual, planned or likely criminal proceedings.
1.217
Transparency International Australia suggested that the ‘exceptional circumstances’ requirement could be removed if the factors in clause 73(3) were mandatory considerations rather than factors the Commissioner ‘may’ take into account. This position was also considered and endorsed by the Law Council in a hearing before the Committee.
1.218
Safeguards suggested to the Committee included making it mandatory (not discretionary) that the Commissioner must (not may) consider all the factors in clause 73(3) when deciding whether to hold a public hearing.
1.219
This mandatory approach is taken in both the existing LEIC Act (subsection 82(4)) and in some state anti-corruption commissions, including in New South Wales.
1.220
The Committee was asked to consider the need for balance between the objectives of the NACC, and various rights of those being investigated, including the right to reputation and the prohibition on interference with privacy, and right to reputation.
1.221
Transparency International, for example, submitted that the NACC Bill should make it clearer that evidence cannot be taken in public where the person has been or will be charged with a related criminal offence, or the Commissioner considers it likely they will refer the matter for consideration of prosecution.
Committee views
1.222
The Committee has benefited from the diverse viewpoints about the circumstances in which public hearings should be held, and notes that this is a matter about which reasonable and thoughtful minds plainly differ.
1.223
On balance, the Committee considers that the thresholds for public hearings as set out in clause 73(2) strike the right balance between ensuring that public hearings can be undertaken by the Commissioner in appropriate circumstances (unlike in some jurisdictions where only private hearings are permitted), taking into account the need for private hearings to protect the reputations and mental health of witnesses called to give evidence, as well as the preservation of the right to a fair trial.
1.224
The Committee also considers that the factors set out in clause 73(3) should remain discretionary considerations, to preserve the independence and flexibility of the Commissioner, noting that different circumstances will call for different weighting to be applied to each of the matters listed.
1.225
The Committee notes that clause 278 of the NACC Bill contains express provision for the Minister to cause a review to be undertaken of the first five years of the operation of the Act. This will provide an opportunity for consideration of whether the thresholds and factors are operating as intended, or whether amendments are required to recalibrate the architecture attending public versus private hearings.
1.226
Dr Haines, Deputy Chair of the Committee, and Senator David Pocock, considered that the threshold for public hearings with the ‘exceptional circumstances’ criteria was not compellingly justified by evidence received by the Committee from the Government and received little support from witnesses or public submissions. Further, Dr Haines and Senator Pocock considered that the public interest threshold is sufficient to guide the Commissioner’s discretion in whether to hold public hearings, and recommended that clause 73(2)(a) be amended to remove the first limb of this current test.
1.227
Dr Haines and Senator Pocock were of the view that the criteria in clause 73(3) should become mandatory considerations to safeguard the reputations of people involved in public hearings, and that making these mandatory factors would address widely-held concerns about the consequences of a decision to make a hearing public, especially regarding unfair prejudice to a person’s reputation, privacy, safety or wellbeing. In Dr Haines and Senator Pocock’s view, it is also clearer and well defined than the ‘exceptional circumstances’ standard, which is undefined. Dr Haines and Senator Pocock did not consider that making these mandatory would hinder the Commissioner’s discretion to apply different weighting to each factor, noting that mandatory consideration is a feature of the exercise of many administrative decision-making powers.
1.228
Dr Haines and Senator Pocock did not consider that it is sufficient to rely on a review of the Act in five years’ time to address any problems arising from these clauses.
1.229
Senator Shoebridge did not support the exceptional circumstances test for public hearings, and considered that the bulk of the submissions in the hearings similarly did not support the test. Senator Shoebridge expressed the view that the evidence on this matter was extremely one-sided with broad agreement from civil society on the risks of setting the test too high and the potential limitation this would create on the Commission’s effectiveness.
1.230
Senator Shoebridge also noted the evidence of the current Victorian IBAC and NSW ICAC Commissioners which from his perspective unambiguously supported a far less restrictive approach to public hearings and the removal of the ‘exceptional circumstances’ test. Senator Shoebridge considered that this evidence from the two current commissioners of the two largest anti-corruption commissions should not be readily dismissed by the Committee, as it was powerful and direct from the coal-face of corruption fighting.
1.231
Senator Shoebridge considered that the overwhelming weight of the evidence was that the test for the threshold for public hearings should match that in NSW where hearings can be heard in public if the Commission, having the best access to all the relevant information, determines that is it in the public interest to do so, and referred to the following evidence of Mr John Hatzistergos:
The other issue that has been raised is public hearings versus private hearings. I'm a strong supporter of public hearings. I believe that they're important because they make the organisation accountable and they provide an opportunity for other people to come forward. We've had investigations which have commenced in public, and as a result of that information other people have come forward and we've been able to go into other areas which have raised significant issues of corruption. It also, I think, ensures transparency and accountability for the agency and justifies the purpose if the case, ultimately, is made for change.
1.232
Senator Shoebridge expressed the view that further legal hurdles and thresholds in the legislation will be exploited by high wealth targets to the detriment of the NACC’s work and corruption prevention.
1.233
Senator Shoebridge noted that in the event that the Parliament does not support removing the ‘exceptional circumstances’ test for public hearings, in his view, there is a real benefit in clearly defining the test to limit the legal uncertainty and promote the public interest. Senator Shoebridge considered that the evidence of the Community and Public Sector Union was of assistance in this regard.
1.234
Senator Shoebridge considered that the Community and Public Sector Union evidence received in the hearings indicated a useful way to provide clarification and certainty for the exceptional circumstances test. Their recommendation was that the term be defined in the Bill as being satisfied when ‘it is preferable or appropriate for evidence to be given in public’. In the view of Senator Shoebridge, this would provide clarity and certainty and limit the litigation risk for the NACC, and also have the benefit of promoting more rather than less public hearings with the very clear benefits to the NACC and the public that would ensue.
1.235
The Coalition Committee Members were of the view that the discretions for public hearings in clause 73(3) should be mandatory. They noted that the Commissioner is not required to consider the impact of a public hearing ‘on a person’s reputation, privacy, safety or wellbeing’. The Coalition Committee Members considered that making it mandatory for the Commissioner to consider the relevant factors will ensure ‘sufficient consideration’ is given to ‘the impact of a public hearing on […] a person’s safety or particular vulnerability’.
1.236
The Coalition Committee Members noted that this amendment is supported or supported in the alternative by the Queensland Law Society, the Australian Human Rights Commission and the Australia Institute’s National Integrity Commission.
1.237
The Coalition Committee Members were also of the view that the ‘prejudice against a fair trial’ provision in clause 227(3)(k) of the NACC Bill should be added as an addition to clause 73(3).
1.238
The Coalition Committee Members considered that not prejudicing a fair trial should be a paramount consideration, and that a clause 73(3)(f) should be inserted, whereby regard must be had to whether a hearing ‘would prejudice the fair trial of any person or the impartial adjudication of a matter’, reflecting the existing provision in clause 227(3)(k).
Coercive and covert powers
1.239
The Committee notes that to undertake its functions, the NACC will be able to exercise significant coercive and covert powers under the NACC Bill and other legislation.
1.240
Under Part 7 of the NACC Bill, the Commissioner would have the ability to compel the production of documents or information (see clause 58 in Appendix B), obtain warrants to enter and search premises, enter certain Commonwealth premises without a search warrant, seize evidence and exercise limited powers of arrest to ensure attendance at a hearing.
1.241
The Commissioner would also have covert investigative powers such as telecommunications interception powers and the ability to use surveillance devices, subject to existing thresholds for the use of those powers by law enforcement agencies. These arrangements are provided for in the NACC (C&TP) Bill.
1.242
The Committee notes that strong and comprehensive information-gathering powers are necessary to enable the Commissioner to undertake its investigation and inquiry functions. The Committee also notes the significant and intrusive nature of such powers, and the need for appropriate oversight and protections.
1.243
The Committee heard from a wide range of organisations and individuals regarding their views on existing arrangements for the exercise of such powers and the sufficiency of safeguards contained in the NACC Bill.
1.244
The Committee notes concerns have been raised in relation to:
journalist source protections;
the issuing of warrants for the exercise of covert investigative powers; and
search powers and the operation of parliamentary privilege.
Extension of journalist source protections
1.245
The Committee notes that Part 4 of the NACC Bill contains safeguards for the protection of the identities of journalists’ informants.
1.246
Clause 31 of the NACC Bill provides protections for the identities of journalists’ informants. The Explanatory Memorandum notes that protecting the identity of journalists’ sources would assist to uphold the public interest associated with a free press.
1.247
As presently drafted, clause 31 applies if:
a.
a person (the ‘informant’) gives information, whether directly or indirectly:
i.
to another person who works in a professional capacity as a journalist; and
ii.
the information is given in the normal course of the journalist’s work as a journalist; and
b.
the journalist reasonably believes that the informant has provided the information on the express or implied understanding that the informant’s identity would not be disclosed.
1.248
In those circumstances, clause 31(2) provides that neither the journalist, nor the journalist’s employer, is required to do anything under the Act that would disclose the identity of the informant or enable that identity to be ascertained. This means that the NACC will not be able to compel journalists and media organisations to identify their sources:
in response to a notice to produce; or
under questioning at a hearing.
1.249
The Committee received submissions and heard evidence from a number of media and news organisations which identified a gap in clause 31. Australia’s Right to Know identified that:
under section 31, the protection only applies to the journalist to whom the information is imparted and their employer. It does not extend to those in the editorial chain, or other participants in the publishing process. As currently drafted, the protection under section 31 can be circumvented by asking one of these other individuals (e.g. an editor or an assistant to the journalist) about the identity of the source, who will be compelled to answer as they are not able to rely on the protection. If they refuse, they will be caught by the contempt provisions.
1.250
The Australian Broadcasting Corporation (ABC) similarly noted submitted that:
Further, the protection ought be extended to include the journalist’s editorial colleagues who have been informed by the journalist of the informant’s identity. Section 31(2) ought to be amended to extend the protection for journalists’ informants to include all editorial staff with knowledge of the informant’s identity.
Committee views
1.251
The Committee recommends that clause 31 of the NACC Bill be amended to expressly extend the protection of journalists’ sources to all staff within the relevant news organisation with knowledge of the informant’s identity. The Committee refers the Attorney-General to the testimony of the Media Entertainment and Arts Alliance (MEAA) which indicated that the MEAA code of conduct applies to members of the MEAA who are ‘media workers’, which encompasses journalists, journalists’ photographers, subeditors and other media workers, and to the response provided by Australia’s Right to Know to a question on notice, which proposes drafting which would achieve this result in the following terms (proposed changes are underlined):
Protection of informant’s identity
(2) Neither None of the following persons are is required to do anything under this Act that would disclose the identity of the informant or enable that identity to be ascertained:
(a) the informant;
(b) the journalist;
(c) nor the journalist’s employer;
(d) a member of the editorial staff of the journalist's employer; or
(e) a member of the legal, administrative, production or support staff of the journalist's employer.
(3) If the journalist is a staff member of a Commonwealth agency, the reference in subsection (2) to the journalist’s employer is taken to include a reference to the head of the agency.
Journalists and warrant powers
1.252
The NACC Bill provides for an additional public interest test that would apply where the NACC seeks a search warrant relating to a journalist or their employer, and where the evidential material sought relates to the alleged commission of a secrecy offence by another person. The officer issuing the warrant would be required to have regard to the public interest in issuing the warrant, and balance this against the public interest in protecting the source’s identity and in facilitating the exchange of information between journalists and members of the public so as to facilitate reporting of matters in the public interest.
1.253
The Attorney-General’s Department stated in its submission:
This safeguard is separate to broader measures to respond to the recommendations of parliamentary committees in their recent reports on press freedoms, but is consistent with the recommendations for additional protections in those reports. The government may revisit the drafting of these provisions as part of broader work that is underway to respond to those reports, to ensure a consistent approach is taken across all relevant laws.
1.254
The Committee heard from representatives of state and territory-based anti-corruption bodies who indicated that their legislation does not contain an equivalent public interest test or other protections for journalists.
1.255
The Committee received submissions from the media industry emphasising the need to protect the confidentiality of journalists’ sources, and expressing the view that the protections under the NACC Bill fall short of what is required.
1.256
Australia’s Right to Know submitted that protections for journalists’ informants under clause 31 of the NACC Bill do not extend to the issuing or execution of search warrants. The submission said:
If a journalist refuses to answer questions or produce documents which would identify their source relying on section 31, or the NACC suspects that the journalist will respond as such, they can simply seek and execute a warrant, obtaining copies of materials identifying the informant. Under the current form of the NACC Bill, the journalist cannot prevent the NACC from taking or utilising such information.
1.257
Free TV Australia said that the ‘drafting should aim at ensuring that these warrants would only be issued in very exceptional circumstances’.
1.258
The Attorney-General’s Department advised that there may at times be a need to execute a warrant without giving advance notice. Alternatively, where the NACC is of the opinion that it does not need to manage this risk, the NACC could instead issue a notice to produce. The Department said:
The reason for a search warrant is usually that there's a particular need to go in and search for evidence directly. Part of that could be that there's a concern about loss or destruction of evidence.
1.259
The Committee notes that clause 124 does not include any right to challenge the warrant at any stage. Australia’s Right to Know noted that it has made previous submissions to the Parliamentary Joint Committee on Intelligence and Security (PJCIS) in relation to the inquiry into the impact of the exercise of law enforcement and intelligence powers on the freedom of the press. One of the five key principles it identified for how warrants relating to journalists should be issued was that the application for the warrant should be the subject of a contested hearing.
1.260
The PJCIS inquiry report acknowledged the arguments made by submitters in relation to contested hearings for warrants to apply to those carrying out professional obligations as a journalist. However, the PJCIS noted that it could not ignore the concerns raised by law enforcement that the establishment of a contested warrants process along the line suggested by the ARTK may carry significant risks in relation to the outcome of an investigation or prosecution. The Attorney-General’s Department also made reference to the PJCIS’s consideration of this issue and noted that it had not recommended the adoption of contested warrants.
Committee views
1.261
The Committee considers that the extension of additional protections for journalist sources in clause 31 of the NACC Bill appropriately acknowledges the important role the media and their sources play in holding public officials accountable.
1.262
It is also commendable that the NACC Bill goes further than other jurisdictions by introducing a significant public interest test as a mandatory consideration for a decision-maker issuing a warrant against a journalist in certain circumstances.
1.263
The Committee notes that the Attorney-General has acknowledged that ‘improved protections for press freedom are needed’ and indicated that the Government intends to progress further legislative reform as a priority – including responding to important reports on press freedom from the PJCIS and the Senate Standing Committee on Environment and Communications, from the last Parliament.
1.264
The Committee acknowledges the Attorney-General Department’s evidence which emphasised that warrants against journalists were only to be executed in limited circumstances, and that the power is directed towards circumstances in which there is a concern about evidence being lost or destroyed.
1.265
The issue of contested hearings has been carefully considered by the PJCIS, and the Committee agrees with the conclusion expressed in the inquiry’s report that introducing such a requirement could significantly undermine law enforcement activities.
1.266
Having regard to these matters, the Committee does not recommend any amendments to the provisions of the NACC Bill in relation to issuing search warrants against journalists.
1.267
Senator Shoebridge considered that in order to strike the proper balance between scrutiny and protecting journalist sources, there was value in a provision allowing a journalist to challenge a warrant to access their source material or other data.
1.268
Senator Shoebridge referred to:
the evidence of MEAA, who argued for the substantial need to ensure journalists’ ethical obligations are not breached by the NACC. He referred in particular to their evidence that ‘between 1989 and 2007, some seven journalists were convicted because they observed their ethical obligation to protect the identity of a confidential source. Three of those journalists were imprisoned’.
the evidence of the Australia’s Right to Know Coalition, which recognised that the NACC Bill provides important protections for journalists, but raised concerns that these did not provide genuine protection. He referred in particular to their concerns about ‘the warrant provisions and other secrecy provisions in the NACC Bill, and other existing legislative provisions… that interact with the NACC Bill and NACC processes’.
the evidence of Free TV, who he considered shared these concerns, and in particular the lack of public interest in the issuing of warrants given the critical role of journalism in democracy. He noted the view that warrant scheme proposed in the Bill was identified as fundamentally undermining a journalist’s ability to protect their sources, since it would provide access to documents, calls, emails and digital communication. Senator Shoebridge pointed to the evidence of Free TV which referred to the contested warrant scheme in the UK as the best-practice model that appropriately balances the competing interests.
1.269
In noting this evidence, Senator Shoebridge was of the view that the test for a warrant should be significantly strengthened – specifically, that where the NACC seeks a warrant for the production of material from a journalist or media organisation the NACC Bill should provide that, unless there is prima facie evidence of a material risk of the material being destroyed or placed beyond the reach of investigators, the journalist or media organisation is granted the ability to contest the warrant. He noted that equivalent laws operate in the UK and are now an accepted part of the legal framework there that respects the crucial and independent role of the media in our democratic systems.
1.270
Further to this point, Senator Shoebridge considered that the limitation on the projections for journalists from search warrants in clause 124 of the NACC Bill is unreasonably restrictive. He noted that while subclauses 124(2A) and (2B) require a court or tribunal considering a warrant to search a journalist to take into account the public interest in protecting the role of a journalist, the provisions carry a serious limitation. The proposed clause 124(2A)(b) limits these protections to only where “the evidentiary material relates to an alleged offence against a secrecy provision by a person other than the journalist.’
1.271
Senator Shoebridge noted that this issue was raised by Australia’s Right to Know, who informed the Committee that clauses 124(2A) and (2B) do not go far enough to protect journalists.
1.272
In Senator Shoebridge’s view, the role of a journalist, and the public interest considerations in protecting their ability to maintain confidential sources, is not limited to matters where there is a potential breach of a secrecy provision. For this reason, he saw value broadening these protections by deleting the proposed clause 124(2A)(b).
1.273
Dr Haines, Deputy Chair of the Committee, shared these concerns.
Power to issue warrants
1.274
Authorised persons of the NACC will have access to certain covert investigative powers available to other law enforcement agencies under existing legislation. This will occur through the NACC (C+TP) Bill substituting references to ACLEI in existing law enforcement legislation to the NACC. These covert investigative powers include:
data surveillance device, listening device, optical device, tracking device, device prescribed by regulation and computer access powers under the Surveillance Devices Act 2004 (the SD Act); and
telecommunications interceptions, stored communications, telecommunications data (metadata) and international production orders under the Telecommunications (Interception and Access) Act 1979 (the TIA Act).
1.275
The Attorney-General’s Department told the Committee these powers will enable the NACC to obtain information about corruption that would otherwise be unobtainable.
1.276
The Committee notes the NACC will have access to covert powers on the same basis as ACLEI, state anti-corruption commissions and other law enforcement agencies, including with respect to thresholds, safeguards and oversight. For example, the NACC will be able to apply for a telecommunications interception warrant, where it is investigating a ‘serious offence’ within the meaning of the TIA Act (being an offence generally punishable by a maximum penalty of at least seven years’ imprisonment).
1.277
The issuing authorities for such warrants to the NACC is provided for in the existing frameworks under the SD Act and TIA Act. Both Acts allow for eligible judges of a Court or nominated members of the Administrative Appeals Tribunal (AAT) to issue warrants. For example, section 13 of the SD Act allows the Minister to nominate a Deputy President, senior member or member of the AAT to issue warrants under Part 2 Division 1 of the SD Act. AAT member appointees must have been enrolled as legal practitioners for not less than five years.
1.278
The Committee notes evidence concerning the appropriateness of AAT members issuing warrants that authorise the NACC’s use of covert powers.
1.279
For example, the Law Council submitted that electronic surveillance warrants should only be issued by judicial officers, and not by tribunal members. The Law Council considers that a requirement for a judicial officer to authorise the issuance of an electronic surveillance warrant provides a greater degree of independence, both substantive and perceived, in the authorisation process.
1.280
The Australian Human Rights Commission submitted:
Given the NACC will be investigating corruption issues in the public sector, it may be more appropriate for warrants to be granted by eligible Judges, rather than an AAT member. Whilst the Commission recognises that a nominated AAT member grants these warrants in their personal capacity, they are otherwise a member of the executive branch of government. Accordingly, the Commission recommends that warrants for the NACC issued under these Acts should only be granted by eligible Judges and not AAT members.
1.281
The Attorney-General’s Department advised:
We've adopted entirely the existing framework in the Telecommunications (Interception and Access) Act. The AAT members have been able to issue those warrants, if they've had the requisite legal qualifications, since 1997, and they do so for all enforcement agencies and all existing anticorruption commissions. […]
It’s a framework that has worked well for almost 30 years, and those members of the AAT have particular qualifications, so it’s not an issue that has been raised by us.
1.282
The Department further advised:
Removing the ability for nominated AAT members to issue such warrants would significantly increase the workload of eligible Judges.
1.283
In this regard, for the 2020-21 period, this would mean that each eligible Judge would on average be required to issue up to 92 warrants to maintain existing electronic surveillance capabilities. This would put additional strain on the Federal Court system, with Judges spending significant additional time issuing warrants rather than hearing matters.
1.284
The AFP discussed their experience with exercising such warrants:
For over 30 years we've been dealing with experienced people from the AAT in terms of a sign-off on those warrants. […]
In terms of AAT members, that's an issue for the government in terms of who's appointed. We in effect apply the legislation. Under the legislation as it currently exists, we can and we have—and we have for a long time—applied for telephone intercepts and surveillance device warrants from an AAT member. The other important point to make is: ultimately, whatever we do in relation to these matters, once we bring them before the court, the court oversights our actions in relation to what's occurred.
1.285
Mr Greg Melick AO SC said he was comfortable with warrants being signed off by AAT members, so long as they are legally qualified. Mr John Hatzistergos also told the Committee that the NSW ICAC goes to the AAT in NSW to seek approval for telecommunications intercepts and certain information connected to that, and observed that ‘we haven’t had an issue as far as that’s concerned’.
1.286
It is also worth noting that the Attorney-General’s Department indicated that there is a review of electronic surveillance laws underway which considers issuing authorities and arrangements more broadly. In response to a question on notice, the Department noted that:
altering the arrangements by which the Commission may access electronic surveillance powers, including by requiring interception warrants to only be issued to the Commission by eligible judges and not nominated members of the AAT, would fragment the authorisation process for these powers;
the Government is currently considering holistic reforms to Australia’s electronic surveillance framework. The suitability of AAT members as issuing authorities for warrant may be considered as part of these reforms.
Committee views
1.287
The Committee considers that it is important that the process for approving warrants under the Bills complements the existing electronic surveillance framework.
1.288
The Committee’s view in this regard is further supported by the evidence from agencies which conveys the strong impression that the AAT’s role in issuing warrants has worked well for 30 years, and no significant issues were identified with the existing regime. Additionally, any abrogation of the AAT’s role in this regard is likely to significantly impact the workload of the Courts, and has the potential to delay or otherwise impede the NACC’s investigative functions.
1.289
Having regard to these matters, the Committee does not recommend any amendments to the provisions of the Bills in relation to which entities can issue warrants.
1.290
The Coalition Committee Members expressed the view that with respect to telecommunications interception and surveillance powers, only a superior court judge should be eligible for appointment as an issuing authority for all types of surveillance warrants.
1.291
They considered that only permitting superior court judges to issue surveillance warrants would ensure greater independence of the process (both perceived and in practice).
1.292
The Coalition Committee Members pointed to two justifications for such an amendment – first, that AAT members are subject to the NACC (unlike superior court judges), and second, that AAT members do not have tenure, presenting an increased risk for compromise of sensitive information.
1.293
The Coalition Committee Members noted the support of the Law Council of Australia for this amendment.
Search powers and parliamentary privilege
1.294
Clause 274 of the NACC Bill expressly preserves parliamentary privilege as it relates to the Commissioner’s and the Inspector’s access to information.
1.295
Parliamentary privilege relates to:
…the special rights and immunities which apply to the Houses, their committees and their Members, and which are considered essential for the proper operation of the Parliament. These rights and immunities allow the Houses to meet and carry out their proper constitutional roles, for committees to operate effectively, for Members to discharge their responsibilities to their constituents, and for others properly involved in the parliamentary processes to carry out their duties and responsibilities without obstruction or fear of prosecution.
1.296
The Committee notes this is consistent with the approach taken in the LEIC Act, and for comparable bodies, such as the ANAO.
1.297
The Attorney-General’s Department submitted:
It is anticipated that the Commissioner and Inspector would seek to develop a memorandum of understanding [MOU] with the Parliament on the process to be followed where the Commission seeks to investigate conduct involving a member of the Parliament or parliamentary staff.
1.298
The Committee notes the AFP’s experience of establishing an arrangement with parliament around parliamentary privilege and the exercise of search powers. The AFP submitted:
…parliamentary privilege may be a significant consideration in any investigation by the NACC relating to a Member of Parliament or their staff. The NACC will require a practical arrangement with the Parliament (similar to the 2021 MOU on the Execution of Search Warrants in relation to a Member of Parliament). This MOU outlines the agreed approach as to how the AFP undertakes particular operational activity that intersects with the work of the Parliament, and ensures parliamentary privilege is appropriately regarded, while not preventing law enforcement from investigating serious criminal offending. Critical to the success of any investigation is the ability to collect relevant evidence. We note the former Government agreed to re-negotiate outstanding matters in the current Parliament. The AFP anticipates any new agreements relevant to the NACC may directly or indirectly impact the AFP’s approach into the future.
1.299
The Committee is of the view that the NACC should look to establish a similar approach to the handling of parliamentary privilege via a memorandum of understanding with the Parliament.
Accountability and reporting
Reporting obligations
1.300
The NACC Bill specifies four types of reports that would be completed by the Commissioner and the Inspector of the NACC. These are:
protected information reports;
1.301
Investigation reports would be prepared by the Commissioner once a corruption investigation is complete. In these reports the Commissioner would be able to make findings of fact; however, would not be able to make determinations of criminal liability.
1.302
Pursuant to clause 149(2)(a) and clause 149(4) of the NACC Bill respectively, if the Commissioner forms the opinion that a person whose conduct has been investigated either has or has not engaged in corrupt conduct, the Commissioner must set out that opinion in the report.
1.303
Where an opinion, finding or recommendation that is critical (either expressly or impliedly) of a Commonwealth agency, a State or Territory government entity or any other person is to be included in an investigation report, the Commissioner must give the head of the agency, the head of the entity or the other person concerned a statement setting out the opinion, finding or recommendation and a reasonable opportunity to respond.
1.304
Clause 159 of the NACC Bill provides that a person must be advised of the outcome of a corruption investigation if the Commissioner makes a finding that the person has engaged in corrupt conduct. The Commissioner may advise a person of the outcome of an investigation if the Commissioner forms an opinion or makes a finding about the corruption issue other than a finding that the person has engaged in corrupt conduct.
1.305
The Commissioner may advise a person of the outcome of a corruption issue raised by the person in a referral, including by providing them with a copy of all or part of the investigation report.
1.306
For investigations that included one or more public hearings, the Minister would be required to table the report in the Parliament. Conversely, the Minister would not be required to table a report for investigations that included only private hearings. However, the Bills do not generally affect the privileges and immunities of the Parliament and, therefore, the Minister may still table reports using parliamentary privilege, even though not required by the Bills.
1.307
Further, the Commissioner would be able to publish a report (either the whole report or in part) where the Commissioner is satisfied it is in the public interest to do so. The Explanatory Memorandum states that this would:
…allow for transparent reporting where a report is not required to be tabled by the Minister or Prime Minister, but the Commissioner is of the opinion that it is in the public interest to make the findings of the report public. This would be consistent with the objects of the NACC Bill, which include educating and providing information about corruption and the detrimental effects of corruption on public administration and the Australian community.
1.308
The Explanatory Memorandum states that this approach would be consistent with existing arrangements for the tabling of reports prepared by ACLEI.
1.309
The Committee heard evidence in relation to the publication of investigation reports, and the circumstances in which the Commissioner is required to provide a copy of all or part of a report to certain persons.
1.310
Professor AJ Brown made some observations in relation to the publication of reports and proposed some suggestions in relation to recipients of reports. He stated that:
It’s so difficult to define when the commission should be lumbered with the responsibility of preparing and publishing a report, because there’s a workload involved and it’s not always justified to publish a report – as opposed to provide it to the relevant persons for action – and to go through the rigmarole of publication. There will always be cases where yes, corruption is found and, yes, it may even satisfy that required threshold of ‘serious and systemic’. But the action is underway and – for various reasons, including to protect people’s reputations – it doesn’t necessarily justify publication.
The principle that the commission should report to the relevant persons should extend to ‘should report to the person who made the referral’ unless there’s a reason not to.
1.311
The Australian Psychological Society agreed that an exoneration report where a report states a finding that no corrupt conduct has occurred would assist the individual concerned to understand, and would therefore be helpful to their mental health.
1.312
The Law Council submitted that the Commissioner ought to be required to inform an exonerated person that they have been ultimately cleared of wrongdoing in a timely way in advance of the publication of any report (regardless of whether it will be made public).
1.313
Mr Greg Melick indicated that in Tasmania, there is no formal process for notifying those subject to an investigation that there has been no finding of corruption, but noted that if a complainant publicises their complaint, ‘normally a dismissal will be publicised’.
1.314
The Hon Robert Redlich informed the Committee about the arrangements present in Victoria in relation to the IBAC’s capacity to publish reports, and noted that ‘if the commission has reached the view that someone has not engaged in corrupt conduct, if it were able to do so, it would be desirable that it makes that clear in any published report’.
Committee views
1.315
The Committee recommends that the Attorney-General give consideration to an amendment to clause 159(2) of the NACC Bill, to require the Commissioner to advise a person of the outcome of a corruption investigation if the Commissioner investigates the conduct of the person and has formed the opinion or made a finding that the person has not engaged in corrupt conduct. Consideration should be given to whether this should be qualified so that if a person is subject to multiple ongoing investigations, the Commissioner is not obliged to provide the report in those circumstances.
Inquiry reports
1.316
In addition to dealing with corruption issues, the NACC Bill would enable the Commissioner to conduct public inquiries into corruption risks, vulnerabilities and measures to prevent corruption in Commonwealth agencies. Public inquiries would focus on broader systemic issues in the Commonwealth public sector rather than a specific corruption issue concerning the conduct of an individual.
1.317
The Commissioner would be required to prepare a report after completing a public inquiry. These reports must not include specific instances of corrupt conduct or a particular corruption issue, sensitive information, or clause 235 certified information.
1.318
The Committee notes that inquiry reports would contribute to the NACC’s functions to provide education and information in relation to corruption risks and prevention strategies.
Protected information reports
1.319
Where the Commissioner has excluded sensitive information (or information certified in clause 235) from an investigation report or an inquiry report under clause 151 or 164, the Commissioner would be required to prepare a protected information report. These reports would set out the excluded information and the reasons for excluding the information from the investigation report. The protected information report would be provided to the Minister and would be protected from disclosure to the public.
1.320
Similarly, the Inspector would be required to prepare a protected information report where the Inspector has excluded information from the NACC investigation under clause 217. Information in this report would be provided to the Commissioner, the Chief Executive Officer, the Minister and certain other relevant recipients specified in clause 220, without disclosing its content to the public.
Annual reports
1.321
The NACC Bill would require annual reports to be prepared by the Commissioner and the Inspector to be presented to the Parliament each financial year.
1.322
Detailed information about public investigations and public inquiries would be included in specific reports; not annual reports.
1.323
In relation to reporting of investigations conducted by the NACC, the Committee notes the annual reporting requirements set out in clause 271 of the NACC Bill, and in particular, subclause 271(2)(b) that states that the annual report must include:
A description of the corruption investigations conducted by the Commissioner during that year that the Commissioner considers raise significant issues for, or reflect developments in, Commonwealth agencies.
1.324
This requirement would apply to all corruption investigations, including those which only involve private hearings.
Publication of information obtained through private hearings
1.325
The NACC Bill provides that the Commissioner has the power to hold public or private hearings, but the default position is in private.
1.326
Public hearings could occur if the Commissioner was satisfied that exceptional circumstances would justify holding the hearing (or part) in public and if the Commissioner was satisfied that it would be in the public interest.
1.327
However, the Committee notes that the publication of information obtained through private hearings rests with the discretion of the Minister and the Commissioner. This is because investigation reports are only required to be tabled (and therefore made public) when a public hearing has been held in the course of an investigation.
1.328
The Committee considered and noted the reporting requirements set out in the LEIC Act for ACLEI, by way of comparison to the accountability and reporting measures proposed in the NACC Bill.
1.329
Similar to the proposed reporting requirements for NACC investigations, the LEIC Act sets out requires the Integrity Commissioner to complete a report at the end of an investigation.
1.330
Under section 209 of the LEIC Act, the Integrity Commissioner may disclose information to the public relating to an investigation if satisfied it is in the public interest. In practice, ACLEI relies on section 209 to publish investigation reports both when findings of corrupt conduct are made and not made.
1.331
These reports must set out:
(a) the Integrity Commissioner’s findings on the corruption issue; and
(b) the evidence and other material on which those findings are based; and
(c) any action that the Integrity Commissioner has taken, or proposes to take, under Part 10 in relation to the investigation; and
(d) any recommendations that the Integrity Commissioner thinks fit to make and, if recommendations are made, the reasons for those recommendations.
1.332
The Integrity Commissioner must provide the report on the investigation to the Minister who administers the LEIC Act and a copy to the head of the law enforcement agency to which the corruption issue relates. Investigation reports are published on ACLEI’s website.
1.333
The Attorney-General’s Department provided the Committee with a detailed comparative table comparing the NACC Commissioner and ACLEI Integrity Commissioner’s obligations in relation to reporting, tabling and publication of investigation and inquiry reports.
1.334
The Committee recognises the importance of transparent reporting for the NACC and its investigations—whether they be conducted in public, in private or both.
1.335
The Committee considers that the publication of reports would assist to ensure the NACC acquires and sustains trust and public confidence in its activities.
Protections
1.336
A number of submissions and witnesses asked the Committee to consider:
the interaction of non-disclosure notations with measures relating to the wellbeing and mental health of witnesses called to appear at a NACC hearing;
the adequacy of protections for whistleblowers; and
how the Bills may impinge upon certain rights and immunities.
Disclosure provisions
1.337
The NACC Bill provides for non-disclosure notations where hearings, investigations or inquiries are held in private, and creates an offence for breaches of these notations. The Explanatory Memorandum notes that ‘non-disclosure notations would ensure the Commissioner can limit the spread of information relating to investigations or inquiries being held in private’.
1.338
The Explanatory Memorandum acknowledges that the Commission’s power to restrict a person’s ability to disclose certain information and material would limit the right to freedom of expression.
1.339
Pursuant to clause 96(1) of the NACC Bill, the Commissioner must include a non-disclosure notation in a notice to produce or private hearings summons if the Commissioner is satisfied that not doing so would reasonably be expected to prejudice:
a.
a person’s safety or reputation; or
b.
a person’s fair trial, if the person has been charged with an offence or such a charge is imminent; or
c.
a NACC Act process; or
d.
any action taken as a result of a NACC Act process.
1.340
Clause 96(2) of the NACC Bill provides that the Commissioner may include a non-disclosure notation in a notice to produce or private hearings summons if the Commissioner is satisfied that:
a.
not doing so might prejudice:
i.
a person’s safety or reputation; or
ii.
a person’s fair trial, if the person has been charged with an offence or such a charge is imminent; or
iii.
a NACC Act process; or
iv.
any action taken as a result of a NACC Act process.
1.341
A person commits an offence if they disclose information about a notice or summons, or any official matter connected with a notice or summons where a non-disclosure notation is included and has not been cancelled. Such a disclosure is a strict liability offence attracting a penalty of 5 years’ imprisonment.
1.342
The NACC Bill contains some exceptions, which permit a disclosure to be made to a legal practitioner, or in any circumstances permitted by the notation.
1.343
The Attorney-General’s Department explained that ‘the commissioner can allow the disclosure of information in an open-ended range of circumstances that could include’ disclosure to a mental health professional and to family members.
1.344
The Committee acknowledges that the NACC Bill currently provides scope for the Commissioner to permit disclosure of information which is the subject of a non-disclosure notation in certain circumstances.
1.345
However, concerns were raised by a number of submitters and witnesses that the process for obtaining this consent could unduly impact on the mental health of a witness, particularly in circumstances where urgent mental health support may be required, but the Commissioner has yet to make a determination in relation to the matter.
1.346
Dr Davis-McCabe of the Australian Psychological Society explained that requiring a person to take the step of seeking the Commissioner’s consent to disclose information to a mental health professional could act as a barrier that may prevent some people from seeking treatment.
1.347
The Hon Ann Vanstone drew the Committee’s attention to a provision in the Independent Commissioner Against Corruption Act 2012 (SA) (SA ICAC Act) which expressly permitted disclosure of certain information in all circumstances to certain categories of persons. Section 54(3) of the SA ICAC Act provides that a person who receives information knowing that the information is connected with a matter that forms or is the subject of a complaint, report, assessment, investigation, referral or evaluation under the Act must not disclose that information unless:
a.
the person is authorised in writing by the Commissioner or the Director of Office for Public Integrity, or by a person approved by the Commissioner or the Director of Office for Public Integrity under this section to give an authorisation; or
b.
the disclosure of that information is for the purpose of—
i.
dealing with a matter referred under this Act by the Commission or the Office; or
ii.
a criminal proceeding, a proceeding for the imposition of a penalty or disciplinary action; or
iii.
a person obtaining legal advice or legal representation or for the purposes of determining whether a person is entitled to an indemnity for legal costs; or
iv.
a person obtaining medical or psychological assistance from a medical practitioner or psychologist; or
v.
a person advising their employer; or
vi.
a person advising their business partners or others with whom a relevant fiduciary relationship exists; or
vii.
the management of a workers compensation claim; or
c.
the information relates to the person and is disclosed by the person to a close family member of the person.
1.348
Section 114(3)(d) of the NSW ICAC Act also permits disclosure to a registered medical practitioner or registered psychologist in relation to the provision by that health practitioner of medical or psychiatric care, treatment or counselling (including but not limited to psychological counselling) to a person required to give evidence by a summons.
1.349
The Law Council recommended that clause 98 of the NACC Bill should be amended in line with section 114 of the NSW ICAC Act. Similarly, the Queensland Council for Civil Liberties recommended that there should be an exception for disclosure in a therapeutic setting or to immediate family members.
Committee views
1.350
The Committee recommends that the Attorney-General consider including a provision in the NACC Bill in similar terms to those identified in the equivalent SA and NSW legislation, permitting the disclosure of information which is otherwise subject to a non-disclosure notation to a medical practitioner or psychologist.
1.351
Whilst the preservation of confidentiality in relation to this potentially sensitive category of information is an important consideration, the Committee shares the concerns of those organisations who have identified the potential for witnesses to be subjected to unnecessary distress where they are prohibited by default from sharing certain information with medical and mental health practitioners.
1.352
Medical and mental health practitioners are subject to patient confidentiality requirements and would therefore not be permitted to disclose the information to any other persons. Additionally, that category of persons would be subject to the provisions rendering the further disclosure of that information (outside of the permitted circumstances) an offence. The Committee is therefore of the view that the addition of such a provision will not undermine the confidentiality of information subject to non-disclosure notations.
1.353
The Coalition Committee Members were of the view that the non-disclosure notation exemption should be extended to family members as well as medical practitioners, noting that the non-disclosure notation can be issued on a low threshold and through delegation. In this regard, they noted the evidence of the Australian Psychological Society that:
I think that it can be very distressing for a person to not be able to talk about things or discuss how they're feeling with family or friends. Actually, we might see those people as possibly being at the highest risk. We know that those who don't have family support or those who are likely to internalise everything and not talk about it can suffer more complex mental health and suicidal ideation than those who have family support in place. So my answer to that is ’it's going to be quite distressing for that individual.
Whistleblower protections
1.354
Part 4 of the NACC Bill provides protections for persons who refer allegations or information raising corruption issues to the NACC. The key protections offered are:
a.
immunity from criminal, administrative and civil liability;
b.
protection from enforcement of contractual or other remedies against a person due to their disclosure;
c.
criminal offences for taking, or threatening to take, reprisal action that causes detriment to whistleblowers who provide information to the NACC.
1.355
The Committee notes that there is significant cross-over between the proposed regime for whistleblower protections in the context of the NACC Bill, and the whistleblower regime that is otherwise provided for by the Public Interest Disclosure Act 2013 (Cth) (PID Act).
1.356
The NACC Bill replicates the reprisal and immunity provisions of the PID Act, but critically extends the scope of the protections to:
a.
all persons, including those who are not public officials; and
b.
all information provided for the purposes of the NACC Bill, regardless of whether that information concerns disclosable conduct (within the meaning of the PID Act).
1.357
The Attorney-General’s Department submission provides a useful summary of other protections for whistleblowers in the Bills:
a.
Part 2 of Schedule 1 of the C&T Bill will amend the PID Act to ensure that protections contained in the PID Act are extended to cover public officials who make a PID directly to the NACC;
b.
all disclosers will be able to provide information to the NACC anonymously;
c.
the staff of the Commission will be subject to strict confidentiality requirements when recording or sharing information that is capable of identifying a person who has disclosed information to the Commission, under Part 11 of the NACC Bill;
d.
the Commissioner and Inspector will also be able to impose restrictions on the further disclosure of information shared with other parties, including for the purposes of protecting the identity of a person who has provided information in connection with an investigation (clause 233).
1.358
The Committee acknowledges that the Attorney-General has publicly stated that in the coming months, the Government will be strengthening the PID Act to ensure Australia has effective protection of whistleblowers, and that these separate reforms are intended to be in place when the NACC commences operations.
1.359
The Attorney-General’s Department also stated that:
The Government is separately progressing a range of initiatives to strengthen the broader Australian Government integrity framework, including: improving protections for whistleblowers by progressing reforms to the Public Interest Disclosures Act 2013 (PID Act) to address issues identified by Mr Philip Moss AM in his 2016 review of that Act, followed by considering the establishment of a Whistleblower Protection Commissioner or Authority.
1.360
The Committee received considerable evidence in relation to whistleblower protections. It was broadly agreed amongst organisations and individuals that adequate safeguards for whistleblowers were an essential component of a well-functioning commission. Transparency International Australia noted that:
effective protection of public and private sector whistleblowers (employees and other insiders) is instrumental to the successful operation of the NACC, and to the credibility of the Commonwealth’s anti-corruption efforts.
1.361
Whilst the protections in the NACC Bill were generally supported, the Committee heard from a number of organisations and individuals who considered that broader reforms were required to enhance whistleblower protections in Australia.
1.362
The Australian Lawyers Association encouraged the Government to:
continue to work towards a comprehensive whistleblower regime to promote the exposure of corrupt conduct and indeed any harmful conduct that would otherwise be difficult to uncover and to investigate all aspects of the treatment of whistle-blowers.
1.363
The Law Council also considered that the Government should work towards a comprehensive whistleblower regime, and welcomed the Attorney-General’s commitment that he will be, in the coming months, strengthening the PID Act.
1.364
The Community and Public Sector Union noted that ‘whistleblower protections in the PID Act have some substantial deficiencies’ and considered that the PID Act should be reformed. The Community and Public Sector Union further noted that:
those reforms to the PID Act should be informed by the recommendations of the Moss Review in 2016 and the Parliamentary Joint Committee on Corporations and Financial Services inquiry into whistleblower protections in the corporate, public and non-profit sectors.
1.365
A number of witnesses and submitters indicated their support for an independent Whistleblower Protection Authority across the public and private sectors, including the Human Rights Law Centre. The Committee also heard evidence from the Dutch Whistleblowers’ Authority in the Netherlands, and appreciated the insights offered into how such an agency might operate, albeit in a different context.
Committee views
1.366
The Committee considers that the effective operation of the NACC depends upon individuals who are aware of corrupt conduct referring such matters to the NACC without fear of reprisal.
1.367
As to the current provisions of the NACC Bill, the Committee does not recommend any amendments, and considers that the protections which extend to all persons who refer a matter to the NACC are important for protecting whistleblowers.
1.368
The Committee notes the commitment of the Attorney-General to implement broader reforms to whistleblower protections which extend beyond corruption matters to a more extensive range of conduct. Having regard to the submissions and testimony received, the Committee notes its support for wider-ranging whistleblower protection reforms which are intended to be in place when the NACC commences operations, including by strengthening the provisions of the PID Act.
1.369
The Committee also considers that the review of whistleblower laws should specifically consider the establishment of an independent Whistleblower Protection Commission, and notes the evidence received by the Committee (including that set out above) in support of such a step.
1.370
Senator Shoebridge, Dr Haines and Senator Pocock considered that whatever the outcome on the NACC Bill, the work to restore integrity will not be nearly done until whistleblowers are fully protected. Senator Shoebridge, Dr Haines and Senator Pocock emphasised that those protections must be in place by the time the new integrity commission opens its doors, and that this includes implementation of the Moss report, as well as provisions for a fully resourced and independent Whistleblowers Commission. Senator Shoebridge, Dr Haines and Senator Pocock considered that the evidence of a variety of civil society representatives, not least of which was Transparency Australia, in this regard was compelling.
Abrogation of privileges: privilege against self-incrimination
1.371
The privilege against self-incrimination means a person can refuse to answer a question or produce a document if it would incriminate them. An abrogation of the privilege against self-incrimination removes that privilege, meaning that a person cannot refuse to comply to give evidence or produce material.
1.372
Clause 113 of the NACC Bill provides for the abrogation of the privilege against self-incrimination. As such, a person would be unable to refuse to comply with a summons or a notice to produce on the grounds that doing so may incriminate them.
1.373
The Committee heard evidence expressing a range of perspectives on the appropriateness of this abrogation, and whether safeguards on the use of self-incriminating evidence are sufficient. The Explanatory Memorandum notes a range of legislative safeguards in place in relation to the use of self-incriminatory evidence, including ‘use immunity’ as outlined below.
Use immunity
1.374
Clause 113(2) provides for a direct use immunity, which acts as a safeguard to the abrogation of the privilege of self-incrimination. A use immunity means that self-incriminatory answers, information, documents and things provided by a person will not be admissible in evidence against them in most criminal, civil penalty, and confiscation proceedings.
1.375
The NACC Bill also outlines exceptions to direct use immunity. In summary, these include:
confiscation proceedings, if the answer or information was given, or the document or thing was produced, at a time when the proceeding had not commenced and was not imminent; or
proceedings for an offence against Part 7 of the NACC Bill; or
proceedings related to certain offences in the Criminal Code Act 1995 (Cth).
1.376
In relation to these exceptions, the Explanatory Memorandum notes:
Authorisation of the use of self-incriminatory investigation material in these limited circumstances is appropriate in order to achieve the legitimate objective of facilitating the effective investigation of a corruption issue or NACC corruption issue that could involve corrupt conduct that is serious or systemic.
1.377
The Committee notes that the intention of these exemptions is to ensure the Commissioner and Inspector can enforce compliance with a notice to produce or summons to attend a hearing.
1.378
The Attorney-General’s Department advised that the abrogation of the privilege against self-incrimination is justified in this context, due to the significant risk posed to the community by corrupt conduct.
Derivative use immunity
1.379
Derivative material is any evidence, information, document or thing obtained directly or indirectly from investigation material.
1.380
As outlined above, current provisions in the NACC Bill only provide for protection in the form of ‘use immunity’. This does not extend to the material derived from self-incriminatory material; that is, the NACC Bill does not provide for a derivative use immunity.
1.381
The Explanatory Memorandum notes this approach is consistent with the current LEIC Act. Further, the importance of derivative materials ‘where appropriate’ is intended to ensure the Commissioner fulfils their statutory functions of detecting, preventing and investigating corrupt conduct that could be serious or systemic.
1.382
Clause 106 of the NACC Bill also preserves the power of the courts to make orders that are necessary to ensure a fair trial of the witness. Such an order could include limiting the possession or use of derivative material.
1.383
The Committee heard evidence regarding the abrogation of the privilege against self-incrimination, with concerns focused on the careful consideration that needs to be given when abrogating such important principles.
1.384
The Committee was advised to consider the inclusion of a derivative use immunity within the NACC Bill. For example, the Law Council submitted that ‘the privilege against self-incriminated may be justifiably abrogated only to the extent that a derivate use immunity is provided.’ The Law Council also suggested the abrogation of self-incrimination should be conditioned on the exhaustion of all other less coercive avenues to obtain information by the NACC.
1.385
While some views indicated that derivative use immunity should be provided for in the NACC Bill in response to the abrogation of the privilege of self-incrimination, the Committee also heard alternative views suggesting that the inclusion of derivative use immunity is not suited to the NACC Bill.
1.386
The Committee heard that providing for derivative use immunity in the NACC Bill would be contrary to the interests of justice and inconsistent with the majority of state and territory models.
1.387
The Attorney-General’s Department said that the approach in the NACC Bill is consistent with the majority of anti-corruption legislation in the states and territories. The Department also highlighted that consequences of abrogating the privilege on witnesses are limited to the extent it is necessary and proportionate to the risk of corrupt conduct on the community.
1.388
The Department noted previous experiences under the former National Crime Authority Act 1984 as an example of the inappropriate use of derivative use immunity for examination material. In this context, the Department submitted, derivative use immunity undermined the capacity of the National Crime Authority to assist in the investigation of serious criminal activity.
1.389
In response to the suggestion that the abrogation of privilege against self-incrimination should be conditioned upon the exhaustion of all other less coercive powers, the Attorney-General’s Department advised that NACC Bill clauses 58(4) and 63(3):
…impose a higher threshold for the exercise of the Commissioner’s investigative powers in circumstances where the abrogation of the privilege is more likely to affect the fair trial of a witness.
1.390
The Committee notes that this is a higher threshold than the test for an ordinary notice to produce or summons and provides additional assurance that the powers of the Commissioner are balanced in the NACC Bill.
1.391
The Committee heard a range of views both in favour and against the NACC Bill’ s approach to self-incrimination and use immunities.
1.392
The Committee recognises the unique challenge of balancing individuals interests and the right to a fair trial, with the public interest of investigating and exposing serious and systemic corruption, and believes the NACC Bill strikes the right balance.
Abrogation of privileges: legal professional privilege
1.393
Legal professional privilege protects confidential communications between lawyers and their clients. The NACC Bill provides for the abrogation of legal professional privilege.
1.394
Clause 114 outlines this abrogation in the context of providing investigation material in response to a direction to produce, a notice to produce or at a hearing. The abrogation would apply to any person, including a company, a Commonwealth agency or someone’s legal representative.
1.395
The Committee notes that a directive from the NACC compelling a person to disclose communications (including legal advice and information ordinarily protected by legal professional privilege) has the potential to impact on a person’s right to a fair trial.
1.396
The Attorney-General’s Department stated that this abrogation of legal professional privilege will not apply to:
advice or communications related to a person’s compliance with a direction or notice to produce, or their attendance or reasonably anticipated attendance, at a hearing; or
legal advice given, or communications made, for the purposes of, or in the course of, a person’s work as a journalist in a professional capacity.
1.397
The Explanatory Memorandum states:
The measures in the NACC Bill that abrogate legal professional privilege in certain contexts are reasonable, necessary and proportionate to achieve the legitimate objective of facilitating the effective investigation of corruption issues and NACC corruption issues, conducting a public inquiry, or an investigation into a complaint made about the NACC.
1.398
The Law Council submitted that the abrogation of legal privilege in clause 114 should be reconsidered as a matter of priority, stating it would both abrogate the fundamental common law privilege and limit the right to a fair trial as per Article 14(1) of the International Covenant on Civil and Political Rights.
1.399
The Law Council recommended:
Clause 114 should be redrafted to remove the abrogation of legal professional privilege and to provide for an independent third party, such as a court, to determine claims made in relation to legal professional privilege. At the very least, steps should be taken to protect the disclosure of privileged material in investigation reports.
1.400
In addition, the Law Council noted its concern regarding clause 115, which may require a legal practitioner to disclose personal particulars of their client apart from anything that may be subject to legal professional privilege. The Law Council submitted that the requirement to reveal identifying client information undermines the integrity of the confidential information and could discourage clients from obtaining proper legal advice.
1.401
Alternatively, the Committee heard the views in support of the abrogation of legal professional privilege, and in some cases, extending the abrogation. For example, the Centre for Public Integrity noted that while the abrogation is appropriate, clause 74 should be amended to afford the Commissioner discretion to hear such evidence in a public hearing, rather than impose a mandatory requirement that it be heard in private.
1.402
The Explanatory Memorandum notes that legal professional privilege is only abrogated where necessary and in limited contexts:
If legal professional privilege was not abrogated in these contexts, people engaging in serious or systemic corrupt conduct would be able to prevent the NACC from accessing information that would otherwise enable an investigation or inquiry under the NACC Bill to progress. This could impede the Commissioner or the Inspector’s ability to properly investigate allegations of serious or systemic corruption, which could hamper the public’s confidence in the ability for the NACC and the NACC’s oversight mechanisms to function effectively.
1.403
The NACC Bill contains limitations and safeguards on the abrogation of this privilege; the Attorney-General’s Department advised that clause 74 of the NACC Bill requires evidence disclosing legal advice or legally privileged communications to be heard in private – given its particularly sensitive nature.
1.404
The Committee notes the discussion of this topic in the Law Council submission and their suggested alternative options to protect the disclosure of privileged information.
1.405
On this issue, the Committee also notes the Attorney-General’s Department’s view that while the NACC Bill will preclude a person from refusing to answer a question or comply with a notice to produce on the basis of legal professional privilege, the Bill will not otherwise affect claims of privilege over that information. This ensures that:
…while the Commissioner would be able to obtain and rely on legally privileged material for the purposes of a corruption investigation, including in a private hearing, a person could later claim the privilege to resist:
the admission of the material in a subsequent prosecution or other proceeding
the publication of the material, including in an investigation report, or
the disclosure of the material, for a purpose unrelated to the corruption investigation.
1.406
The Committee recognises that legal professional privilege is a sensitive topic in which there were a range of views expressed, and considers that the NACC Bill provisions in this regard are appropriate.
1.407
The Coalition Committee Members were of the view that the Australian Human Rights Commission should review and seriously consider each of the six recommendations made by the Law Council of Australia concerning privileges and protections, including but not limited to the abrogation of the privilege against self-incrimination (clause 113) and legal professional privilege (clause 114-115).
Judicial review
1.408
The NACC (C&TP) Bill ensures that findings of the Commissioner can be reviewed under the Administrative Decisions (Judicial Review) Act 1977 (the ADJR Act). A judicial review can be sought in relation to findings and decisions under Part 8 of the NACC Bill and, more broadly, judicial review is possible under the Judiciary Act 1903 or in the High Court’s original jurisdiction.
1.409
A range of submissions welcomed the availability of judicial review for NACC decisions.
1.410
However, there certain decisions of the NACC are excluded from the operation of the ADJR Act and, as such, would not be eligible for judicial review under this Act.
1.411
Part 2 of the NACC (C&TP) Bill works to amend Schedule 1 of the ADJR Act. These amendments exclude the following provisions of the NACC Bill from the operation of the ADJR Act:
provisions in part 6 (dealing with corruption issues);
provisions in part 7 (investigating corruption issues); and
clauses 161 (the power to conduct public inquiries), 162 (the power to invite submissions to public inquiries), 209 (the Inspector may deal with NACC corruption issues), 210 (how the Inspector deals with NACC corruption issues) and 213 of the NACC Bill (how the Inspector may conduct investigations).
1.412
The Law Council commented on the exclusion of the above interim decisions from judicial review, submitting that judicial review should be available for at least substantial interim decisions of the Commissioner, such as the decision to hold a public hearing.
1.413
The Law Council suggested that not all exclusions listed above can be accurately described as administrative processes. More detail can be found in the Law Council’s submission.
1.414
The Explanatory Memorandum outlines the reasons for these exclusions:
If a person were able to seek review of decisions made under these provisions, this could significantly impede the NACC’s ability to fulfil its statutory functions. Enabling a person to seek review of these intermediate decisions could also cause lengthy delays that could prejudice NACC Act processes. It is therefore appropriate to exclude these provisions of the NACC Bill from the operation of the ADJR Act.
1.415
The Committee also notes that these amendments do not limit the ability of a person to seek a judicial review in the High Court’s original jurisdiction or under the Judiciary Act 1903 (Cth).
1.416
The Coalition Committee Members were of the view that the amendments to the ADJR Act in the NACC (C&TP) Bill (Schedule 1, Part 2), excluding review under the ADJR Act of a large number of powers of the proposed NACC and NACC Inspector, should be removed.
1.417
They noted that the NACC (C&TP) Bill provides a list of classes of decisions which are excluded from review by the Federal Court, including provisions in Part 6, Part 7, clauses 161, 162, 209, 210 and 213, and noted that the rationale for this exclusion is that allowing judicial review of these provisions may ‘significantly impede’ the NACC’s functions. They also noted that other provisions in the NACC Bill remain justiciable and an individual can seek review under the Judiciary Act 1903 (Cth) or under s 75(v) of the Commonwealth Constitution.
1.418
The Coalition Committee Members expressed the view that ensuring the availability of judicial review is a necessary means of oversight of the NACC, particularly as judicial review allows for procedural fairness. They also considered that it was strange that the Explanatory Memorandum argues that restricting judicial review in this way will avoid delays to investigations, yet reviews under the Judiciary Act are also likely to lead to delays in investigations. They noted that the Law Council supported the removal of these provisions.
Oversight
Role of the inspector
1.419
Part 10 of the NACC Bill provides for two separate mechanisms to oversee the NACC:
a.
a Parliamentary Joint Committee on the NACC; and
b.
an Inspector of the NACC.
1.420
The Explanatory Memorandum notes that the Inspector would be a standing oversight mechanism designed to investigate corruption issues that arise in relation to the NACC itself (clause 184(1)(a) – (d)) and investigating complaints about the conduct of the NACC or its staff (clause 184(e)).
Oversight of the NACC’s exercise of covert powers
1.421
There is presently no provision in the NACC Bill authorising or requiring the Inspector to undertake an audit function, through which the NACC’s use of coercive powers would be routinely reviewed.
1.422
The Committee notes that both the Explanatory Memorandum and the evidence of the Commonwealth Ombudsman provides some reassurance that the use of covert surveillance powers is subject to review by an independent third party. The Consequential Bill provides for the Ombudsman to oversee the NACC’s use of the following powers and mechanisms:
a.
controlled operations under Part IAB of the Crimes Act 1914;
b.
surveillance devices and computer access powers under the SD Act;
c.
telecommunications interceptions, stored communications, telecommunications data (metadata) and international production orders under the TIA Act; and
d.
the NACC’s access to the industry assistance framework under Part 15 of the Telecommunications Act 1997 to obtain reasonable assistance from communications providers to support the NACC’s powers.
1.423
Whilst the Commonwealth Ombudsman possesses the above listed powers, the Ombudsman acknowledged that his office does not undertake ‘real-time monitoring’.
1.424
The Committee received a number of submissions and heard from a number of witnesses who proposed that the scope of the Inspector’s role be expanded to include a pro-active audit function in relation to the NACC. Whilst there was divergence as to the precise extent of the audit function, most submitters and witnesses who addressed the matter supported an audit function which facilitated the pro-active review of the use of coercive powers.
1.425
In particular, the Committee was assisted by the contribution of the Victorian Inspectorate which oversees the Victorian IBAC. The Victorian Inspectorate noted that the most significant difference between the oversight function proposed by the NACC Bill and the arrangements in Victoria is that the NACC Bill does not require the NACC to notify the Inspector of the use of coercive powers, as IBAC is required to do.
1.426
The Victorian IBAC Act contains a number of provisions which require IBAC to report to the Victorian Inspectorate in relation to the following matters:
a.
the issuing of witness summonses, including the name of the person summonsed and the reasons why the summons was issued;
b.
the issuing of arrest warrants, including the name of the person named in the warrant and the reasons in summary form as to why the IBAC has applied for the issue of an arrest warrant; and
c.
examinations, specifically that IBAC is required to give a copy of the video recording or any transcript of the examination of a person who has been examined.
1.427
Ms Cathy Cato, Executive Director, Legal and Integrity, Victorian Inspectorate explained in her appearance before the Committee that in practice, within three days of a relevant power being exercised, the Victorian Inspectorate is provided with a report explaining the purpose of the exercise of that power. Upon receipt of a report, the Inspectorate can consider the exercise of the power, including its relevance to the investigation and IBAC’s compliance with legislative requirements. The Inspectorate does not review all referred matters, and instead undertakes a triage process to enable it to look at the ‘most risky’ instances of uses of coercive powers. The Inspectorate will provide feedback to IBAC in relation to those matters.
1.428
The Victorian Inspectorate noted that reviews of the use of coercive powers provide assurance that statutory requirements are complied with and that IBAC’s powers are only used where they assist the agency to achieve the purposes of its investigation.
1.429
Mr Bruce McClintock proposed a number of amendments to clause 184 and the role of the Inspector, including an extension of the role to confer an audit function on the Inspector ‘to ensure that the NACC is conducting its operations lawfully and fairly’.
1.430
Transparency International Australia similarly called for the enhancement of the functions of the Inspector as set out in clause 184, including ‘adding a function of auditing the policies, procedures and practices of the Commission relating to its exercise of its coercive powers (including its public hearings procedures)’.
Committee views
1.431
As to the scope of the Inspector’s oversight function, the Committee recommends that the Attorney-General consider expanding the remit of the Inspector to include a pro-active audit function limited to the review of the NACC’s use of coercive powers.
1.432
Specifically, the Committee recommends that consideration be given to requiring a report to be delivered to the Inspector within 3 days by the NACC following:
a.
a witness summons being issued, including reasons why the witness was summonsed;
b.
an arrest warrant being issued, including reasons why the NACC applied for the issued of the arrest warrant.
1.433
The Committee does not presently consider that the audit function should extend to a review mechanism in relation to the Commissioner’s decision to hold a public hearing. Having regard to the extensive debate surrounding the issue of the exceptional circumstances threshold for public hearings and the Committee’s ultimate conclusion in that regard, requiring that a further step be taken before a public hearing can occur would not be appropriate.
1.434
The Committee otherwise considers that the Inspector has sufficient discretion to determine which mandatory reports should be reviewed, and that the Inspector will provide feedback to the NACC in relation to those matters promptly.
Complaints review mechanism
1.435
Clause 184(e) of the NACC Bill contains an express power for the Inspector to investigate external complaints about the conduct and activities of the NACC or its staff members, where this falls short of the standard of corrupt conduct. The Explanatory Memorandum details the flexibility offered by the current drafting of the provision as follows:
The NACC Bill would not specify any requirements for referring complaints about the NACC to the Inspector. Neither would it prescribe any requirements for the Inspector to deal with complaints, or to deal with them in a particular way. This ensures the Inspector has appropriate flexibility to determine the best approach to dealing with any NACC complaints it receives, using the powers conferred by Division 4.
1.436
The circumstances in which it is envisaged that the Inspector may investigate a complaint about the NACC or its staff include where the matter does not involve corrupt conduct, but where:
a.
the NACC or its staff may have exercised the NACC’s powers unfairly or without proper authorisation; or
b.
witnesses may be dissatisfied with their treatment during a corruption investigation.
1.437
The Attorney-General’s Department responded to a question on notice which asked for consideration as to whether a recent example of a complaint investigated by the Victorian Inspectorate in relation to the Victorian IBAC could be investigated by the Inspector pursuant to clause 184(e). That example raised issues regarding IBAC’s handling of complaints made by an individual, including the appropriateness of its referral of complaints back to Victoria Police for investigation, the absence of any written assessment or analysis of welfare risks and communication issues and delays. The Department have advised that the NACC Bill would enable the Inspector to investigate matters of that nature – either as a complaint or as a NACC corruption issue.
1.438
The Inspector would have full discretion to decide whether to deal with a complaint it receives about the NACC or its staff, and would have the power to:
a.
direct the Commissioner or an agency head to produce information, documents or things;
b.
issue a notice to produce to any person, but not a post-charge or post-confiscation application notice;
c.
hold hearings, including issuing summonses and requiring persons to answer questions or produce information, documents or things;
d.
apply for orders to hold a person in contempt of the Inspector; and
e.
enter and search Commonwealth premises without a warrant.
1.439
However, for the purposes of investigating a complaint the Inspector would not be able to use:
a.
the Commissioner’s coercive search powers to apply and enter and search any premises (aside from a Commonwealth premises); or
b.
the Commissioner’s covert investigation powers, for example under the TIA Act and the SD Act.
1.440
Additionally, the Inspector would not have the power:
a.
to issue post-charge and post-confiscation application notices to produce and summons; and
b.
to apply for warrants requiring the delivery of travel documents or the arrest of witnesses.
1.441
The Inspector would have the same reporting requirements and discretions for both NACC corruption investigations and complaint investigations. The investigation reports would be required to set out:
a.
the Inspector’s findings or opinions on the NACC corruption issue or the complaint;
b.
a summary of the evidence and other material on which those findings or opinions are based;
c.
any recommendations that the Inspector thinks fit to make; and
d.
if recommendations are made, the reasons for those recommendations.
1.442
As to the contents of an investigation report, the Inspector could make recommendations as they see fit, including on the following matters:
a.
taking action in relation to a person, in accordance with relevant procedures, with a view to improving their performance;
b.
terminating the employment of a person in accordance with relevant procedures;
c.
taking action to rectify or mitigate the effects of the conduct of a person;
d.
adopting measures to remedy deficiencies in the policy, procedures or practices that facilitated the employment or engagement of an unsuitable person.
1.443
The Committee received a range of evidence about the adequacy of the current scope of the Inspector’s powers and role in relation to what might best be described as ‘maladministration’, as opposed to corruption issues or the narrower category of the use of coercive powers.
1.444
Some submitters and witnesses, whilst acknowledging that clause 184(e) of the NACC Bill confers power to investigate complaints, considered that the Inspector should also be responsible for ‘oversight of the performance of the NACC, including how long its inquiries take’.
1.445
Mr Bruce McClintock considered that there was a practical difficulty arising from the wording of the Inspector’s function of dealing with complaints in clause 184(1)(e), in that the provision does not define the nature of the complaints the Inspector can deal with.
1.446
Mr McClintock indicated that this could lead, in his experience, to NACC employees bringing complaints about matters such as workplace bullying and harassment, which are not the intended role of the Inspector.
1.447
The Committee relatedly heard evidence from existing agencies within the Commonwealth’s integrity jurisdiction, including the Commonwealth Ombudsman, Auditor-General and the Australian Public Service Commission. In particular, the Commonwealth Ombudsman identified that:
I think that the general intention with respect to the oversight role of my office for administrative practices is that it’s about a belt-and-buckles approach. It’s ensuring that complaints can go to the inspector, and the inspector will focus on particularly significant allegations. But there may be less-significant complaints, and it’s important that all complaints can in fact be considered and investigated by some form of body with oversight…if there are things that arise that don’t constitute matters that the inspector wants to look at then my office has jurisdiction to look at them.
I anticipate that a body of this nature will attract a range of different complaints, and many of those complaints might be matters that, on the face of it, are not matters that the inspector would necessarily prioritise, but it’s still important to look at those matters.
1.448
The Commonwealth Ombudsman specifically identified in its submission that its office would have jurisdiction to investigate ‘administrative actions’ of the NACC. This is because the NACC fits the definition of a ‘prescribed authority’ within the meaning of the Ombudsman Act 1976 (Cth), being a body established by an enactment for a public purpose. The Commonwealth Ombudsman identified specific examples of what might fall within the definition of ‘administrative action’ and therefore its jurisdiction as including:
a.
complaints about delays in the NACC taking action or communicating with complainants; and
b.
administrative practices in relation to a hearing.
1.449
The Commonwealth Ombudsman informed the Committee that he expected that a memorandum of understanding would be entered into with both the Inspector and the NACC – so that ‘everything can be considered and looked at – that nothing falls into the cracks’.
1.450
The Australian Public Service Commission provided detail about their remit and drew the Committee’s attention to the existence of:
a.
employment principles which govern the relationship between Australian Public Service agencies, as employers, and their employees; and
b.
a code of conduct which sets out clear rules relating to the professional conduct of [Australian Public Service] employees, with failure to meet the obligations under that code of conduct potentially resulting in a misconduct investigation that can have consequences for employment.
1.451
The Attorney-General’s Department also referred to the overlap in functions between the Auditor-General and the Commonwealth Ombudsman on the one hand, who cover a range of matters relating to the oversight of the NACC’s functions within the scope of their existing powers – and the role of the Inspector on the other hand, who could investigate a wide range of matters where they were the subject of a complaint.
1.452
Clause 213 of the NACC Bill empowers the Inspector to perform an investigation (in relation to either a complaint or a NACC corruption issue) in such manner as the Inspector thinks fit. The Committee understands that this broad-based discretion includes the ability of the Inspector to refer any complaint which it does not intend to investigate itself to another Commonwealth integrity agency, where appropriate.
Committee views
1.453
The Committee accepts that the limits imposed on the Inspector’s investigative powers in dealing with a complaint (as opposed to a NACC corruption issue) are appropriate and reflect the proportionality of the powers to investigate, balanced against the seriousness of the conduct under investigation.
1.454
As to the operation of the complaints mechanism, the Committee considers that the current drafting of the relevant provisions confers appropriate discretion on the Inspector to undertake investigations, including into the categories of conduct raised in various submissions.
1.455
The Committee does not consider that any further amendments are required to clarify or otherwise ‘expand’ the scope of the Inspector’s role in relation to the investigation of complaints. Clause 184(e) confers a broad discretion to investigate a range of matters where they are raised by way of a complaint, including by the Inspector undertaking an investigation, or by the Inspector referring a complaint to another integrity agency pursuant to section Clause of the NACC Bill.
1.456
The Committee anticipates that where matters are raised which fall into the category of a workplace complaint or issue, the Inspector will be readily able to exercise their discretion to refer the matter to the Australian Public Service Commission in appropriate cases. Similarly, for matters of lesser seriousness which nevertheless are worthy of further investigation, the Commonwealth Ombudsman has expressly identified its ability to receive referrals of that nature.
1.457
It would be appropriate for these agencies to consider adopting Memorandums of Understanding to facilitate cooperation and set out clear guidelines for complaint referrals.
1.458
Senator Shoebridge considered that the evidence of Mr Bruce McClintock on the appropriate role of an anti-corruption commission inspector was powerful and compelling, and that this was especially so given his ongoing experience in that role with two existing commissions.
1.459
Senator Shoebridge expressed the view that the mischief in the current Bill is that the Inspector’s role is misdirected as being a mini-NACC for NACC, checking for any alleged serious or systemic corruption within the NACC. Senator Shoebridge noted Mr McClintock’s evidence was that the Inspector is better directed at overseeing the ongoing work of the Commission rather than being focused on alleged corruption in the Commission, although that may form a very small part of their work.
1.460
Senator Shoebridge was of the view that the Inspector’s role is better directed to ensuring that the workings of the NACC ensure procedural fairness, that its coercive powers are appropriately targeted and that its procedures and practice address the objects and purposes of the NACC Bill. He noted that in this regard, Mr McClintock proposed an amended legislative solution for the Inspector as set out below, and expressed the view that there is real merit in this model which should be closely considered by Parliament as the Bill progresses.
1.461
Mr McClintock’s drafting for this clause is as follows, and Senator Shoebridge saw value in the inclusion in these provisions in the NACC Bill to strengthen the role of the Inspector:
184 Functions of the Inspector
(1) The Inspector has the following functions:
(a) to audit the operations of the NACC for the purpose of:
(i) monitoring compliance with the laws of the Commonwealth:
(ii) detecting agency maladministration and officer misconduct.
(b) to investigate complaints of agency maladministration or officer misconduct made in relation to the conduct or activities of:
(i) the NACC; or
(ii) an officer or staff member of the NACC;
(c) to provide relevant information and documents to the Committee;
(d) to receive public interest disclosures (within the meaning of the Public Interest Disclosure Act 2013) and to deal with those disclosures; (e) to report, and make recommendations, to both Houses of the Parliament on the results of performing the functions mentioned in paragraphs (a) to (e).
(2) The Inspector also has such other functions conferred on the Inspector by this Act or by any other Act.
(3) In this Part “agency maladministration” has the following meaning: any conduct (by way of action or inaction) of the NACC--
(a) that is unlawful (that is, constitutes an offence or is corrupt conduct or is otherwise unlawful), or
(b) that, although it is not unlawful--
(i) is unreasonable, unjust, oppressive or improperly discriminatory in its effect, or
(ii) arises, wholly or in part, from improper motives, or
(iii) arises, wholly or in part, from a decision that has taken irrelevant matters into consideration, or
(iv) arises, wholly or in part, from a mistake of law or fact, or
(v) is conduct of a kind for which reasons should have (but have not) been given, or
(c) that is engaged in in accordance with a law or established practice, being a law or practice that is, or may be, unreasonable, unjust, oppressive or improperly discriminatory in its effect.
(4) In this Part “officer misconduct” means any conduct on the part of an
officer or staff member of the NACC, which, if engaged in by the NACC, would amount to agency maladministration.
Other matters
Eligibility for appointment to Commissioner
1.462
The Committee heard evidence regarding the eligibility criteria for appointments to the role of Commissioner of the NACC.
1.463
Several witnesses were asked whether they considered that former politicians should be excluded from such appointments, consistent with the approach in the ACT integrity legislation.
1.464
Some witnesses considered that former politicians should not be eligible for appointment to the role of Commissioner.
1.465
Others raised the issue that a blanket exclusion could rule out individuals who had been elected to political office some time ago, and noted that such individuals have historically subsequently been appointed as judicial officers and carried out their roles in a non-partisan and independent manner.
1.466
A different view was taken by other witnesses, one of whom suggested that it would depend upon the other qualities and experience of the person.
1.467
The Committee does not consider that an express exclusion for individuals who have held public office from appointment to the role of Commissioner is necessary. The assessment of an individual’s qualifications and experience requires a greater degree of nuance which would be unduly constrained by such a provision.
1.468
Senator Shoebridge considered that it was universally accepted that the appointment of Commissioners must, so far as possible, be an a-political exercise. He noted that looking that the provisions of other state and territory anti-corruption commissions for best practice in this regard, the Committee’s attention was drawn to the ACT Integrity Commission. Senator Shoebridge noted in particular that its founding Act in section 26 provides that:
26(3) In addition, the Speaker must not appoint a person as the commissioner if the person—
(a) is or has been the inspector of the commission; or
(b) is or has been a member of—
(i) the Legislative Assembly; or
(ii) the Parliament of the Commonwealth; or
(iii) the legislature of a State or another territory.
1.469
Senator Shoebridge was of the view that if the goal of the Parliament in passing the NACC Bill is to restore faith in politics and in a genuinely independent NACC, then it was important to prohibit the appointment of current or former members of Parliament as Commissioners. He considered that while it is certainly possible to picture former politicians who could rise above their political and partisan past to act, in practice, as an independent Commissioner, this exercise is also about perceptions of independence and the critical task of restoring trust in politics.
1.470
For those reasons, Senator Shoebridge saw the value in the NACC Bill including similar provisions to those found in section 26(3) of the Integrity Commission Act 1988 (ACT), which expressly prohibit the appointment of former members of any Parliament or Legislative Assembly as Commissioner.
Recommendations
1.471
The Committee recommends that clause 31 of the NACC Bill be amended to expressly extend the protection of journalists’ sources to all staff within the relevant news organisation with knowledge of the informant’s identity.
1.472
The Committee recommends that the Attorney-General consider expanding the remit of the Inspector to include a pro-active audit function limited to the review of the NACC’s use of coercive powers.
1.473
The Committee recommends that words to the following effect be inserted in clause 40(1)(b) of the NACC Bill:
1.474
‘The Commissioner may deal with a corruption issue that:
is referred to the Commissioner; or
the Commissioner becomes aware of in any other way, including that the Commissioner may deal with a corruption on their own initiative.’
1.475
The Committee recommends that the Attorney-General consider including a provision in the NACC Bill in similar terms to those identified in the equivalent South Australia and New South Wales legislation, permitting the disclosure of information which is otherwise subject to a non-disclosure notation to a medical practitioner or psychologist.
1.476
The Committee recommends that clause 8(1)(e) be removed from the NACC Bill.
1.477
The Committee also recommends that for the avoidance of doubt, the Explanatory Memorandum be clarified to identify that the examples of potentially corrupt conduct described therein fall within the clause 8(1)(a) – (d) limbs.
1.478
The Committee recommends that the Attorney-General give consideration to an amendment to clause 159(2) of the NACC Bill, to require the Commissioner to advise a person of the outcome of a corruption investigation if the Commissioner investigates the conduct of the person and has formed the opinion or made a finding that the person has not engaged in corrupt conduct.
1.479
Consideration should be given to whether this should be qualified so that if a person is subject to multiple ongoing investigations, the Commissioner is not obliged to provide the report in those circumstances.
Senator Linda White
Chair
9 November 2022