Chapter 2 - Examination of the Annual Report

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Chapter 2 - Examination of the Annual Report

The role of the Australian Commission for Law Enforcement Integrity

2.1 Section 15 of the Law Enforcement Integrity Commissioner Act 2006 (LEIC Act), sets out the functions of the Integrity Commissioner. In summary these functions are to:

detect, investigate and prevent corruption in law enforcement agencies;
maintain and improve the integrity of staff members of law enforcement agencies; and
collect and process intelligence on corruption in law enforcement.[1]

Compliance with reporting requirements

2.2 Each annual report must be prepared in accordance with reporting requirements set out in the organisation's founding legislation (the LEIC Act) and the relevant regulations formed under this Act – the Law Enforcement Integrity Commissioner Regulations 2006 (the LEIC Regulations). In addition, as a matter of policy, each annual report should comply with the reporting requirements set out in the Joint Committee of Public Accounts and Audit approved guidelines: Requirements for Annual Reports.

2.3 A comprehensive compliance index is included in the Annual Report and cross-references compliance with these requirements. Each is described in brief below.

Founding legislation

2.4 The annual reporting requirements for ACLEI are set out in section 201 of the LEIC Act and require that the Integrity Commissioner provides the Minister – for presentation to the Parliament - a report on the performance of the Integrity Commissioner's functions during each financial year. The Annual Report must include the following:

the prescribed particulars of:
1. corruption issues notified to the Integrity Commissioner under section 19 during the financial year; and
2. corruption issues raised by allegations or information referred to the Integrity Commissioner under sections 18 and 23 during that year; and
3. corruption issues dealt with by the Integrity Commissioner on his or her own initiative during that year; and
4. corruption issues investigated by the Integrity Commissioner during that year; and
5. corruption issues that the Integrity Commissioner referred to a government agency for investigation during that year; and
6. ACLEI corruption issues investigated during that year; and
7. certificates issued under section 149 during that year;
a description of investigations conducted by the Integrity Commissioner during the financial year that the Integrity Commissioner considers raise significant issues or developments in law enforcement;
a description, which may include statistics, of any patterns or trends, and the nature and scope, of corruption in:
1. law enforcement agencies; and
2. other Commonwealth government agencies that have law enforcement functions; that have come to the Integrity Commissioner’s attention during that year in the performance of his or her functions;
any recommendations for changes to:
1. the laws of the Commonwealth; or
2. administrative practices of Commonwealth government agencies; that the Integrity Commissioner, as a result of performing his or her functions during that year, considers should be made;
the extent to which investigations by the Integrity Commissioner have resulted in the prosecution in that year of persons for offences;
the extent to which investigations by the Integrity Commissioner have resulted in confiscation proceedings in that year;
details of the number and results of:
1. applications made to the Federal Court or the Federal Magistrates Court under the Administrative Decisions (Judicial Review) Act 1977 for orders of review in respect of matters arising under this Act; and
2. other court proceedings involving the Integrity Commissioner; being applications and proceedings that were determined, or otherwise disposed of, during that year.[2]

Law Enforcement Integrity Commissioner Regulations 2006

2.5 Regulations 17 to 23 set out the prescribed particulars of the corruption issues outlined in section 201(2) of the LEIC Act.

Joint Committee of Public Accounts and Audit approved guidelines

2.6 Each year the Department of Prime Minister and Cabinet publish Requirements for Annual Reports. These annual reporting requirements are approved by the Joint Committee of Public Accounts and Audits under sub-sections 63(2) and 70(2) of the Public Service Act 1999. The requirements cover a range of mandatory and suggested matters.

Financial Management and Accountability Act 1997

2.7 The Financial Management and Accountability Act 1997 (FMA Act) sets out the framework for the proper management of public money and public property by the Executive arm of the Commonwealth. Under section 49 of the FMA Act the chief executive is required to prepare annual financial statements in accordance with the Finance Minister's Orders (FMOs).

Exemption from reporting

2.8 As a prescribed agency under the FMA Act, ACLEI would normally be subject to the above requirement. However, because the LEIC Act had not been enacted at the time of the 2006 Budget, funding to establish ACLEI was appropriated to the Attorney-General's Department for 2006-07. Financial reports for the 2006-07 year were included in the consolidated financial reports of the Attorney-General's Department.

2.9 On 2 August 2007, the Minister for Finance and Administration issued a direction under section 51(2) of the FMA Act exempting ACLEI from the requirement to provide separate financial statements for the 2006-07 reporting period.

Compliance with other government requirements

2.10 In addition to the above annual reporting obligations, ACLEI has fulfilled the following requirements:

Publishing of information under Section 8 of the Freedom of Information Act 1982;
Reporting on contracts with greater than $100 000 value in accordance with the Senate Order for Departmental and Agency Contracts;[3]
Listing of file titles in accordance with the Senate Order for the Production of Indexed Lists of Departmental and Agency Files;[4] and
Recording of legal services expenditure in accordance with the Legal Services Directions 2005, issued by the Attorney-General under the Judiciary Act 1903.[5]

The inaugural Annual Report of ACLEI

2.11 This is the first Annual Report of the Integrity Commissioner and covers the period 30 December 2006, when the LEIC Act commenced operation, to July 2007. As Acting Integrity Commissioner, Professor John McMillan led this first six-month establishment phase up until 22 July 2007 when Mr Philip Moss commenced his five-year term as Integrity Commissioner.

2.12 As ACLEI's inaugural Annual Report, the Report was created as a 'foundation document'[6] and outlines the context within which the organisation was established, as well as reporting on performance and compliance. The first chapter of the Report provides a brief review of the history that led to the formation of ACLEI, including the path to establishing state-based law enforcement integrity agencies and the concerns with the limits of existing Commonwealth law enforcement agencies' internal complaints and integrity mechanisms.

2.13 The report emphasises that ACLEI – in contrast to some of its state counterparts – was not established in response to a Royal Commission or other form of inquiry into police corruption.[7] That is, ACLEI was established in response to serious corruption risks and not in response to perceived serious corruption practices and was the culmination of 'a steady progression towards an independent authority to investigate corruption in law enforcement'.[8] As the then Attorney-General, the Hon. Philip Ruddock MP explained:

The focus on the AFP and the ACC does not reflect a perception that these bodies currently have a significant problem with corruption. Indeed, there is no evidence of systemic corruption within either body. However, these agencies play a key role in Australian government law enforcement. Putting in place a regime of rigorous external examination now will ensure that the public can have continuing confidence in their integrity.[9]

Performance

2.14 ACLEI had one outcome and one outputin the 2006-07 reporting period:[10]

Outcome: Assurance that Australian Government law enforcement agencies and their staff act with integrity

Output: Detect, investigate and prevent corruption in prescribed Commonwealth law enforcement agencies; assist law enforcement agencies to maintain and improve the integrity of staff members

Performance measures

2.15 ACLEI's outcome and output are achieved with reference to qualitative and quantitative performance measures. The performance indicators are:

Quality measures:

Serious and systemic corruption in law enforcement is identified and addressed
The quality of internal investigations into corruption matters by law enforcement agencies is monitored
Law enforcement agency plans to prevent corruption and improve integrity are oversighted
Reports by the Integrity Commissioner are accepted by the Parliamentary Joint Committee on the Australian Commission for Law Enforcement Integrity
The public is made aware that corruption allegations can be referred to the Integrity Commissioner for investigation

Quantity measures:

Number and complexity of investigations
Amount and complexity of intelligence gathering
Proportion of recommendations stemming from investigations that are accepted by the relevant agency
Proportion of recommendations relating to potential criminal charges that proceed to prosecution
Success rate for confiscation proceedings under the Proceeds of Crime Act 2002
Number of reports/submissions to Government
Number of presentations to Government and the community on integrity in law enforcement and the role of ACLEI[11]

2.16 The committee is satisfied that the performance report included in the Annual Report corresponds with the above measures as well as meeting the performance reporting requirements set out in the LEIC Act and LEIC Regulations.

2.17 However, the committee was informed that the reporting requirements stipulated in the LEIC Regulations are not satisfactorily tailored to reflect the organisation's activities. The Integrity Commissioner, Mr Moss, explained that the Regulations were 'largely adopted from the now repealed Complaints (Australian Federal Police) Act 1981' and, consequently, are best suited to a complaints investigation agency and not a serious corruption detection and prevention body.[12]

2.18 Mr Moss went on to explain that in order to report accurately and usefully on ACLEI's performance, additional material was included in the Annual Report, which exceeded the requirements of the LEIC Regulations. Mr Moss highlighted in particular, the importance of reporting the effort of finding 'no corruption', which, he argued, 'can be as important a public benefit, by way of assurance to the Parliament and the public, as detecting the corruption'.[13]

2.19 The committee notes the limits of the LEIC Regulations and commends the Integrity Commissioner's decision to report more broadly than legally prescribed. With a review of the LEIC Act scheduled for early 2010, the committee sees no urgency in reviewing the Regulations until this time. The committee encourages ACLEI to adopt this reporting approach for the 2007/08 and 2008/09 financial years.

Performance summary

2.20 Under the LEIC Act information is received by ACLEI through:

mandatory notifications from the heads of the ACC and AFP (all potential corruption issues)
mandatory notification from the Commonwealth Ombudsman (significant potential corruption issues)
voluntary referrals (other people/agencies and people in custody)[14]

2.21 A total of eighteen matters were notified or referred to ACLEI with a breakdown of sources as follows:

AFP	5 notifications[15]
ACC (including former NCA)	7 notifications
Ombudsman	2 notifications
Other people/agencies	2 referrals
People in custody	2 referrals
Minister	0 referrals
ACLEI 'own initiative'	0 'own initiative' investigations[16]

2.22 The status of case handling of the eighteen matters as at the end of the 2006-07 reporting period was as follows:

four matters under ACLEI investigation
three matters still under assessment
three matters returned to relevant agency for investigation
two matters referred back to the relevant agency with integrity commissioner oversight
two matters not investigated as they had already been the subject of proceedings before a court
four matters - investigation was deemed unwarranted[17]

2.23 The committee sought updated information on the status of cases carried into the 2007-08 year and asked if there were any impediments to the timely completion of cases. Mr Peter Bache advised that one matter was closed and a report had been sent to the Minister. He said that it was anticipated the remaining seven cases would be finalised in 'the near future'.[18]

2.24 ACLEI witnesses reiterated the observation in the Annual Report[19] that delays to the completion of cases were due to (comprehensible) factors outside the control of ACLEI, such as 'legal issues surrounding access to files'.[20] In this sense the delays were viewed as par for the course and did not reflect problems with ACLEI's practices or signify a lack of cooperation from information sources.

2.25 However, in relation to the full spectrum of matters currently before ACLEI (those carried over as well as those referred/notified in the current financial year) the Integrity Commissioner did concede that if 'more resources were made available' to ACLEI the corruption matters currently with ACLEI could be addressed in a 'more timely way'.[21]

Increase in matters notified and referred

2.26 The committee was informed that there has been a significant increase in the number of matters notified and referred since the 2006-07 reporting year. Mr Moss stated:

The current count for the period ending 31 March 2008—that is, at the end of the third quarter of the current financial year—is 45 corruption issues. So there has been quite an increase in issues notified and referred to us since the end of the 2006-07 year. In fact, 27 matters so far in this current year, 2007-08.[22]

2.27 In additional information submitted to the committee, Mr Moss noted that the figures provided at the public hearing and quoted above suggest that the corruption issues notified and referred to ACLEI in the first three quarters of the 2007-08 year are in fact consistent with the rate of notification and referrals in the first six months of ACLEI's operation, revealing an average of nine matters in each three-month period in each financial year. Mr Moss explained that several of the corruption issues included in the 2006-07 six-month reporting period were in fact matters that had arisen prior to ACLEI's establishment.[23] Thus this back-log of cases skews or inflates the 2006-07 figures.

2.28 Further, Mr Moss advised the committee that along with an increase in the referral/notification rate, the nature of the matters notified/referred is impacting on the organisation's workload. This is evident in four ways:

Corruption issues referred or notified to ACLEl are now more likely to be about contemporaneous (and even imminent) matters, and these issues demand more timely assessment by ACLEI.
Previously, many of the cases notified to ACLEl by the ACC and the Australian Federal Police had already been subject to at least preliminary investigation by those agencies. As ACLEl began to receive more timely notification from those agencies, the burden of original assessment has shifted towards ACLEI.
As ACLEl develops, it has access to more information sources enabling better assessment of the issues before us, but this situation does increase the time taken to assess issues properly.
As ACLEl's operational knowledge of the agencies for which we have responsibility, grows and our relationships with the agencies develop, we are able to undertake broader and more meaningful inquiries than previously.[24]

2.29 Mr Moss did note that as ACLEI gains more experience and, correspondingly, an improved decision-making capacity, it is anticipated that the workload focus will shift away from case assessment leaving more time for investigations into serious and systemic corruption matters.[25]

2.30 The committee was concerned about the impact of this increased workload on the organisation's capacity to undertake investigations. Mr Moss told the committee that the increased workload combined with the current allocation of resources (noted above) was impacting negatively on the timeliness of case completion.[26]

2.31 However, Mr Moss reminded the committee that ACLEI is being established on a 'building-block' approach. He explained that the organisation is looking at the different 'elements' that will make up the agency such as the intelligence capability, investigation capability and corporate services. Mr Moss stated that 'across all of those functions I have mentioned, if resources were available, we could be developing all of those'.[27] He further noted that in 'technical areas' such as interception of telecommunications, the use of listening devices and controlled operations, the agency hadn't, as yet, begun developing these capabilities and would, in the interim, buy in capabilities as the need arises. [28]

Trends in matters referred

2.32 The Annual report documents the following four trends in the matters referred/notified to ACLEI in the 2006-07 reporting year:

Evidence before courts – allegations questioning the veracity of evidence presented by law enforcement officers
Information from people in custody
Unauthorised disclosure – alleged unauthorised access to and/or release of confidential information by law enforcement officers
Illicit drugs – allegations relating to the importation and trafficking of illicit drugs[29]

2.33 Mr Bache confirmed that the four trends noted in the Annual Report were continuing in the current financial year.[30]

Using ACLEI as a vehicle to obstruct or delay the judicial process

2.34 The Annual Report notes the potential for 'tainted evidence' by law enforcement officers to be put before the courts and explains that the powers provided to the Integrity Commissioner complement existing measures to safeguard against this.[31] However, notwithstanding the important role that ACLEI plays in safeguarding against false evidence, there is also a risk that this safeguard can be used by people to frustrate the judicial process. [32]

2.35 This risk was reiterated at the public hearing:

Importantly, there are issues of evidence before courts. It would appear from our preliminary inquiries that some people are seeing ACLEI as a vehicle for raising issues that have previously been before the court and extending their appeal process. That is something we mentioned in the annual report and that we are monitoring because, as I am sure the commissioner will say, we are mindful that we do not want to become that vehicle. We do not want to be seen to be a vehicle to obstruct or delay the judicial process.[33]

2.36 The significant likelihood of this risk occurring was confirmed by Deputy Commissioner Lawler from the AFP:

I would be able with 28 years experience as a front-line police officer and now as an AFP executive to make some commentary around that. The reality is that that has been a tactic used by accused persons to frustrate law enforcement and indeed sometimes to frustrate prosecutions. It is something that those who are experienced in this area are aware of.[34]

2.37 The committee, whilst concerned by this phenomenon, recognises that it is, to an extent, an unavoidable risk. The committee was reassured to hear that, at this stage, there does not appear to be an increase in the numbers of people making allegations of police corruption in order to frustrate court proceedings since the establishment of ACLEI:

There is no evidence to suggest there is an increased frequency of accused persons using this tactic, it is regularly used in cases involving organised crime.[35]

2.38 The committee is satisfied that ACLEI is fully cognisant of this risk and is taking appropriate steps to manage it, including – as documented in the Annual Report – plans to discuss the issue with the Commonwealth Director of Public Prosecutions and develop protocols for managing these cases.[36]

2.39 The committee further recognises that the Integrity Commissioner is mindful that management of this risk must not discourage individuals from raising their concerns with ACLEI. The committee supports the Integrity Commissioner's approach as outlined below:

The Integrity Commissioner considers that this is an inevitable risk to which ACLEI must remain alert. As a result, part of ACLEI’s investigation process includes assessing the credibility of a complaint, a small part of which is probing the reasons why a person has brought information forward, and the timing of doing so.

One aspect of ACLEI’s work is to disprove allegations that are without any substance. ACLEI’s challenge is to be able to assess information in a timely way, in order to cull allegations that are falsely or vexatiously made and that may interfere with the criminal justice process.

The Criminal Code contains penalty provisions for providing false information and statements to government officials. While these provisions apply to information provided to the Integrity Commissioner and ACLEI investigators, ACLEI must also take care not to dissuade people from coming forward in circumstances where they may individually lack substantial corroborative evidence.

For that reason, ACLEI’s preference is to encourage provision of information, and use the assessment and investigation process to establish veracity.[37]

Exercise of powers

2.40 The Annual Report provides an overview of the Acting Integrity Commissioner's use of coercive powers in the 2006-07 reporting period. This has been summarised in the table below:[38]

notices to give information (s 75(1)(A)	3
notices to produce documents or things (s 75 (1)(B)	3
summons to attend a hearing to give evidence and/or produce documents or things (s 83)	5
applications to the Federal Court for delivery of a witness’s passport or for their arrest (ss 97-101, LEIC Act)	0
applications for a search warrant (part 9, division 4, LEIC Act)	0
applications for warrants under the Telecommunications (Interception and Access) Act 1979 or the Surveillance Devices Act 2004	0
controlled operations certificates issued under part 1AB of the Crimes Act 1914.	0
applications for acquisition of an assumed identity under part 1AC of the Crimes Act 1914	0

Anti-corruption reviews

2.41 The Report notes that the 'nature of corruption is to remain undetected' and, as a result, 'targeting high-risk corruption areas has been shown to be beneficial'.[39] Undertaking anti-corruption reviews of the agencies under ACLEI's jurisdiction was highlighted as an important but as yet untouched area of activity in the 2006/07 reporting period. Mr Moss told the committee that this remained a dormant area of activity but was on the organisation's future work program:

As for anticorruption reviews, I am going to have to turn to identifying potential corruption risks in the two agencies, as I said, to be on the front foot, particularly since in January 2010, under this legislation, there is to be a review of this law which presumably will also be accompanied by a review of ACLEI’s performance. At the end of 2009, on the eve of that review, I do not want to be reporting merely that I am still in receiving and responding to referrals mode; I want to be out there understanding what the risks are and in what directions I should be proactive. So, yes, that is certainly one thing I am considering for the future. [40]

2.42 Mr Moss reported that this area of activity would most likely commence in 2008-09 and said he would provide notification of this before the end of the financial year.

Relationships with agencies under ACLEI's jurisdiction

2.43 As noted earlier in this chapter, ACLEI was established with the purpose of enhancing integrity in law enforcement at a national level and not in response to evidence of systemic corruption. This no doubt sets a positive scene for the cooperative working relationships described by the Integrity Commissioner and the agencies under ACLEI's jurisdiction.

2.44 The Integrity Commissioner was steadfast in his view that relationships were strong at agency head and officer levels between ACLEI and the agencies it oversees:

I would like to say very clearly that we have very cooperative relationships indeed between the AFP commissioner, the ACC CEO and me, and also at officer level, particularly between the executive officer of ACLEI and the head of the AFP’s PRS and their counterpart in the ACC. I am very pleased about the strength of those relationships and the extent of our cooperation.[41]

2.45 The Deputy Commissioner Lawler from the AFP described a productive working relationship:

The AFP supported the establishment of ACLEI and over the past 15 months of its operation a cooperative relationship between ACLEI and the AFP has developed at all levels. The AFP has been working closely with ACLEI to identify and treat high-level strategic risks that the AFP faces and, indeed, advance proactive anticorruption initiatives. ... The AFP’s belief is that the strength of its professional standards regime, which has always featured independent external scrutiny by the Ombudsman, reduces the risk of systemic corruption within the AFP. The AFP is pleased to have that belief tested through a constructive ongoing relationship with ACLEI.[42]

2.46 Similarly, Mr Milroy, CEO of the ACC told the committee:

The ACC has established a close working relationship with ACLEI, taking a proactive and inclusive approach to the notification of issues. We have operational systems and corruption prevention strategies that promote and ensure values and ethical standards of the agency. We consider it vital that the ACC is seen as an agency that can be relied upon at all times by government and as partners to act ethically.[43]

Adequacy of the notification process

2.47 Under section 19 of the LEIC Act, the heads of law enforcement agencies under ACLEI's jurisdiction (currently the AFP and the ACC) are required to notify the Integrity Commissioner of all potential corruption issues 'as soon as practicable' after they become 'aware of an allegation, or information, that raises a corruption issue'.[44]

2.48 The committee requested information on the adequacy of the notification process and was informed by Mr Moss that:

The ACC took a very correct approach, which we found commendable, in that they reported to us, for the 2006-07 period, matters that they had underway as corruption issues which they themselves were investigating. They included those in their notifications to us during that period. So there were a number of issues, which they had underway, which they also then referred to us, but they were not matters which we ourselves picked up. They were matters which they were handling adequately.

The AFP, similarly, are forthcoming, as they are required to be under the LEIC Act, about notification to us of corruption issues as they become aware of them.[45]

2.49 Mr Moss did note that a discussion was held with the AFP regarding timeliness of notification in a very limited number of cases and that there have been no further concerns in this regard:

We did have a discussion with the AFP at one point. We did encourage them to give us more timely notification than we had received in one or two instances—not in the general run of matters; just in one or two instances—and that was fully accepted after that discussion. We are now receiving very timely notification of matters.

One of the key aspects, under the legislation and with the establishment of ACLEI, is that an external agency is informed of corruption issues. It is not at the discretion of an agency now to become aware of such a matter and then to deal with it in its own way. It must notify me. The question of that being at the earliest instance was the point I was seeking to make. I have made that point successfully and that is now the current practice.[46]

2.50 Deputy Commissioner Lawler from the AFP pointed the committee to the formal determination,[47] signed by the Commonwealth Ombudsman and the AFP Commissioner, which sets out various categories of conduct and provides a basis for making distinctions between potential issues of misconduct and potential issues of corruption.[48] Further, he told the committee that regular meetings are held between the Manager of Professional Standards, AFP and the ACLEI executive to ensure that all relevant matters are referred to ACLEI. Deputy Commissioner Lawler noted that an independent audit of AFP complaint handling by the Commonwealth Ombudsman 'did not identify any matters that had not been appropriately referred to ACLEI'.[49]

Relationships with state counterparts

2.51 The LEIC Act provides for the Integrity Commissioner to pass on information to, and conduct joint investigations with, state law enforcement integrity agencies. For this reason it is important that sound working relationships are established between the Integrity Commissioner and the state-based integrity agencies.

2.52 Mr Moss informed the committee that he has developed 'good working relationships' with the four state-based law enforcement integrity agencies and explained that liaison with these agencies is ongoing. He further commented that a joint investigation is underway with one of the agencies and, on another case, an exchange of information relating to one of the agencies under ACLEI's oversight had occurred.[50]

Relationships with information/intelligence sources

2.53 The Annual Report notes that one of the functions of the Integrity Commissioner under section 15 of the LEIC Act is to 'collect, correlate, analyse and disseminate information and intelligence in relation to corruption in law enforcement agencies'.[51]

2.54 The Report goes on to note that ACLEI has commenced negotiations with the Australian Transaction Reports and Analysis Centre (AUSTRAC) to give ACLEI access to financial transaction information, and the Australian Electoral Commission (AEC) to secure access to electoral information.[52]

2.55 In additional information provided to the committee, ACLEI reported that discussions had commenced with a range of public and private organisations that 'could assist ACLEI's intelligence-gathering and investigative roles'. It was further reported that the majority of negotiations with agencies that had commenced in the 2006-07 reporting period had culminated in agreement – including with AUSTRAC and the AEC. ACLEI commented positively on these interactions:

ACLEI has been pleased to find that these agencies and organisations require, as a condition of access to information they might hold, adherence to procedures that are designed to ensure lawful and accountable use of the information, as well as its safe handling and storage.[53]

Governance and accountability

2.56 ACLEI has a number of internal and external governance and accountability mechanisms, which underpin ACLEI's operations and provide assurance that ACLEI is exercising its significant powers in an ethical and appropriate manner.

Internal arrangements

2.57 The committee notes that in the 2006-07 reporting period a few of the internal mechanisms were still being put in place. However, it was clear from the information provided that serious consideration had been given to the introduction of all internal mechanisms. The committee looks forward to a status report on the mechanisms briefly described below in the next annual report.

Internal Audit Committee

2.58 The Report notes that 'as part of the transition to corporate independence' the organisation is establishing an Internal Audit Committee. This committee will be chaired by the Integrity Commissioner and will include an external member. The committee will oversight fraud and risk management, occupational health and safety, financial matters and compliance with legislation and government policy directives. Along with this a fraud control plan – the ACLEI Fraud Control Plan 2007-2009 – has been developed.[54]

Ethical standards and operational security

2.59 The Report notes that a set of Agency Policy Advices are being prepared. These advices cover conflicts of interest, managing harassment in the workplace, acceptance of gifts and benefits, managing breaches of the APS Code of Conduct, whistleblowing, outside employment, email and internet policy, recruitment, use of mobile phones, and approved use of ID cards and badges.

2.60 All new staff must submit a Declaration of Private Interests and update this declaration as their circumstances change. Further, all ACLEI positions are 'Designated Security Assessed Positions'. [55]

Policies and Procedures

2.61 ACLEI produced a comprehensive set of practice notes, which set out the procedures for conducting hearings including information on the rights of witnesses. These notes are publicly available on the organisation's website. They were produced in keeping with a recommendation from the Senate Legal and Constitutional Legislation Committee.

2.62 Interim operational guidelines were introduced. They comply with the Australian Government Investigation Standards (AGIS) and cover surveillance devices, telecommunications interception, controlled operations, assumed identities, informant management, exhibit handling, forensic procedures and witness protection.[56]

Performance review

2.63 The Report notes the intention to evaluate and select a quality assurance model to enable ongoing assessment and quality improvement of ACLEI's performance.[57]

External mechanisms

2.64 Along with the Parliamentary Joint Committee on the Australian Commission for Law Enforcement Integrity, a number of external mechanisms are in place to monitor the operations and performance of the organisation and provide safeguards for the use of the Integrity Commissioner's considerable powers.

'Process accountability'

2.65 The Report explains that a range of ACLEI's powers and authorities 'require the prior approval of an external issuing officer', in the form of, for example, search warrants, warrants to use or retrieve surveillance devices or intercept telecommunications.[58]

2.66 Along with this, ACLEI is compelled by law to report on the use of certain powers to the Attorney-General and in some cases to the Parliament.

Judicial review

2.67 Like all agencies that exercise law enforcement powers, the authorities and powers of ACLEI and the Integrity Commissioner are open to judicial review.[59]

Commonwealth Ombudsman

2.68 The Report notes that the Commonwealth Ombudsman contributes to the accountability of ACLEI in three ways:

'independent review of ACLEI’s complaint handling on complaint from a member of the public;
own motion investigation into matters of ACLEI’s administration; and
monitoring ACLEI’s compliance with legislation governing use of certain intrusive and covert powers'.[60]

2.69 In the 2006-07 reporting period there were no notifications by the Commonwealth Ombudsman of investigations into complaints about ACLEI or own motion investigations. ACLEI did not use powers subject to inspection by the Commonwealth Ombudsman.[61]

Reports to Minister

2.70 Under the LEIC Act the Integrity Commissioner must provide the Minister with investigation reports. If a public hearing has been held during an investigation the Minister is compelled under the LEIC Act to present the report to both Houses of Parliament within 15 sitting days of receiving it. In the absence of public hearings, release of the report by the Minister is discretionary.

2.71 Special reports relating to the operations or the functions and powers of the Integrity Commissioner may be provided to the Minister at any time, for presentation to the Parliament.[62]

2.72 During the public hearing a concern was raised about limits on the requirement of the Minister to make investigation reports public. Further information was sought on the mechanisms that safeguard public accountability.

2.73 In response to this question on notice, ACLEI provided a summary of the reporting requirements for ACLEI investigations, which can be found at Appendix 2. Further, attention was drawn to the independent status of the Integrity Commissioner, and the powers that the Integrity Commissioner has to disclose information to the public, independent of Government:

The statutory office of Integrity Commissioner has an independent relationship with government. The Governor-General appoints the Integrity Commissioner (and any Assistant Integrity Commissioner).

Their appointments can only be terminated by the Governor-General by reason of misbehaviour or physical or mental incapacity.

ACLEI and the Integrity Commissioner are not subject to direction from the Minister. Nor does the Integrity Commissioner require the prior authority of government to exercise any of his or her discretionary powers.

While reports of the Integrity Commissioner are normally presented to the Parliament by the Minister, the Integrity Commissioner has an independent capacity to disclose information to the public (s 209, qualified by s 149 of the LEIC Act) where he or she considers it is in the public interest to do so.

As a measure to ensure the continuing independence of the Integrity Commissioner from any undue influence from any person or agency, the LEIC Act limits the tenure of the Integrity Commissioner to a total of five years (s 175(3)). The same limit applies to the appointment of any Assistant Integrity Commissioner (s 185(3)).[63]

2.74 The committee recognises that reporting of ACLEI investigations must achieve a balance between public accountability and the adequate protection of witnesses and sensitive information.[64] The committee further recognises that the Act aims to provide for this balance.

2.75 In some cases it may not be in the public interest to disclose the outcomes of an investigation and for this reason it is important that the Integrity Commissioner and the Minister have the power to withhold investigation reports (or parts of reports) from public release. At the same time, the legislative emphasis given to the independence of the statutory office of the Integrity Commissioner and, in particular, the independent capacity of the Integrity Commissioner to disclose information to the public, provides assurance that (appropriate) disclosure is ultimately isolated from political influence.

2.76 The committee is satisfied that sufficient mechanisms are in place to maintain public accountability. However, given that ACLEI has been in operation for a limited period of time, the committee believes it would be prudent to review the various investigation reporting processes within the context of the scheduled review of the operation of the Act in early 2010.[65]

Auditor General

2.77 The Auditor-General is responsible under the Auditor-General Act 1997 for providing auditing services to the Parliament and public sector entities such as ACLEI. ACLEI was not subject to a performance audit by the Auditor-General in the 2006-07 reporting period.[66]

Senate estimates

2.78 Estimates of government expenditure are referred to Senate committees as part of the annual budget cycle. The Acting Integrity Commissioner appeared before the Senate Standing Committee on Legal and Constitutional Affairs on 23 May 2007.[67]

Workplace and corporate issues

2.79 In view of the fact that ACLEI had only been in operation for six months at the end of the 2006-07 reporting period a range of initiatives are reported as being in progress or due to commence in the following (2007-08) financial year.

2.80 The public hearing provided the committee with an opportunity to seek up-to-date information on the various initiatives, to address any significant teething problems that may have arisen, and to satisfy themselves that development of the structures and processes that enable ACLEI to conduct its work are on track.

2.81 The committee focused its attention on three key areas: ACLEI's financial position, staffing matters and information and communications technology (ICT).

Financial position

2.82 As discussed in the Annual Report and reiterated in the public hearing, ACLEI was established on a 'building-block' or staged implementation approach. Mr Moss explained that under this model, allocation of resources would be determined, to some degree, as a clearer picture of the organisation's workload and supporting infrastructural requirements emerged:

[Y]ou start with our present allocation and then the assumption is that over time, as our capacity develops and as the need becomes clear, further resources would be given to us.[68]

2.83 Given the infancy of the organisation and the relatively nebulous funding approach, the committee sought further information on ACLEI's current financial position. Accordingly, the following information was provided:

ACLEI’s appropriation for 2007-08 is $2.013m. In late 2007, the balance of funds previously appropriated to the Attorney-Generals Department for the operation of ACLEI in 2007-08 were transferred to ACLEI under s 32 of the Financial Management and Accountability Act 1997.

In January 2008, ACLEI applied to the Minister for Finance for approval to budget for an operating loss in 2007-08 of $0.523m. The predicted loss results from increased employee costs associated with additional seconded staff (approximately $0.271m), increased supplier expenses arising largely from an underestimation of rental costs in ACLEI’s original funding (a shortfall of approximately $0.131m) and increased depreciation expense associated with a revaluation of capital assets transferred from the Attorney-General’s Department (predominantly Information Technology equipment and infrastructure - approximately $0.121m). The Minister for Finance has approved ACLEI’s application.

With no historical data or expenditure trends on which to base a budget, ACLEI is working on a straight line budget for 2007-08, that is, one twelfth of the annual allocation has been budgeted for each month. As at the end of March 2008, ACLEI expenditure had exceeded the original 2007-08 budget by approximately $0.131m, but has not exceeded the approved operating loss. [69]

2.84 The committee is satisfied that ACLEI is operating within its budget, taking into account the approved operating loss. The committee acknowledges the difficult task that ACLEI faces in working with restricted funds to undertake a workload of increasing and not easily calculable quantity.

Budget 2008-2009

2.85 On 13 May 2008 the Attorney-General, the Hon. Robert McClelland and the Minister for Home Affairs, the Hon. Bob Debus, announced an increase in funding for ACLEI:

The Australian Commission for Law Enforcement Integrity will receive an additional $7.5 million over four years to enable the Commission to make more timely assessments of the information it receives about potential corruption.[70]

2.86 The Budget Statement 2008-2009 for ACLEI reports that the additional annual funding will enable ACLEI to recruit 'a small number' of additional investigative staff and additional staff 'to fully establish its corporate functionality as a statutory agency'. It is further noted that a capital injection of funds has been provided to 'accommodate the expanded organisation and to procure equipment for the additional staff.[71]

2.87 The committee commends the increased allocation of funding to ACLEI in light of the concerns raised at paragraph 2.30 of this report.

Staffing matters

Staff recruitment and turnover

2.88 The Report notes a high turnover of staff in early 2007 and explains that this was due to the decision to employ staff on a non ongoing basis until the appointment of the Integrity Commissioner. As a result of the staff losses, the Acting Integrity Commissioner reviewed the original decision and decided to proceed with the recruitment of staff on an ongoing basis. Mr Moss reiterated this explanation and noted a stabilising in staff retention:

As I understand it—I was not there—that related to uncertainty about just what ACLEI would be doing, what work it would have, who was going to be the Integrity Commissioner et cetera. All those sorts of things were factors in that turnover. Since I have begun, one staff member has departed, so there has been a steadying, if you like, of the staffing situation.[72]

2.89 The Report further points to the 'competitive employment market for staff with law enforcement and investigation experience', as contributing to high staff turnover.[73] Whilst recognising that staff retention has improved, the committee emphasises that it is vital that ACLEI is able to continue to attract and retain high-calibre staff. Whilst not in itself enough to be an employer of choice, attractive workplace conditions and remuneration levels will go some way to ensuring ACLEI is in a position to recruit suitable staff. The planned negotiation of a collective agreement (discussed below) offers an opportunity to give further consideration to this matter.

Australian Workplace Agreements (AWAs)

2.90 The Report explains that with the exception of the Integrity Commissioner all ACLEI staff are employed under Australian Workplace Agreements (AWAs). In view of the changed industrial relations environment under the new Rudd Government, the committee sought information on future workplace arrangements for existing and incoming staff.

2.91 Mr Bache told the committee the intention is to negotiate a collective agreement, which will come into force when the current AWAs expire at the end of June 2009.[74] In the interim, new staff will be employed under a common law contract. Consistent with the AWAs, the contracts will expire on 30 June 2009 at which point all staff will be brought under the employment conditions of the proposed collective agreement.[75]

Information and communications technology (ICT)

2.92 The Report notes that management of information and communications technology (ICT) requirements present challenges for a small agency like ACLEI. As a result, the Acting Integrity Commissioner sought assistance from the Attorney-General's Department for ongoing ICT support.

2.93 In March 2007 a memorandum of understanding setting out the parameters and conditions of ICT support was signed by the Acting Integrity Commissioner and the Information and Knowledge Service Group of the Attorney-General's Department. Under this agreement the information and knowledge Services Group provides technical support, file back-ups and secure systems management.

2.94 The report further notes that staff of the Attorney-General's Department and ACLEI had commenced work on an internal secure ICT network to 'enable storage of classified information at higher security levels than are currently possible'.[76]

2.95 Given the sensitive nature of ACLEI's work the committee sought assurance that interim ICT arrangements had not presented significant security risks for ACLEI and requested a progress report on this initiative.

2.96 Mr Bache told the committee that the Attorney-General's Department network is 'rated at protected'. He went on to explain that ACLEI requires a network that can handle 'highly-protected material'. The initiative currently being pursued is a LAN (Local Area Network) 'to enable investigators to efficiently maintain a case management system'. Mr Bache noted that it was not expected that this would be implemented within the 2007-08 year. On questioning, Mr Bache conceded that this delay was due to competing priorities for resources:

The resources that need to be devoted to planning and implementing are largely those within our operations area and, at the moment, their priorities are with the investigation we have.[77]

2.97 However, Mr Bache did assure the committee that interim measures were being put in place to ensure information will be stored securely:

[W]e have a plan for getting an interim system in place which will enable us to store and maintain the data. The broader plan is to network that.[78]

Other issues

2.98 Two additional issues were raised during the inquiry:

the potential expansion of ACLEI's jurisdiction to cover other Commonwealth agencies with a law enforcement function; and
arrangements to deal with officers/staff working with the AFP or ACC on a secondment basis or through joint operations

Extension of ACLEI's jurisdiction

2.99 The LEIC Act was enacted with the view to eventually extending ACLEI's jurisdiction to other Commonwealth agencies with a law enforcement function. As stated in the Annual Report, other agencies may be brought under ACLEI's jurisdiction by regulation, made under section 224 of the LEIC Act.[79]

2.100 Deputy Commissioner Lawler from the AFP remarked:

There has been commentary that the jurisdiction of ACLEI could be expanded to cover other Commonwealth agencies beyond the AFP and the ACC. Whilst this decision is ultimately one for the minister, there are a number of observations I would like to make. The first is that the AFP does have a role in investigating matters that are referred to it relating to corruption within other Commonwealth agencies. However, the risks that ACLEI was created to mitigate are also present in other Commonwealth agencies and departments that have taken on a law enforcement function. This is particularly amplified given the increasing interoperability and joint investigations that occur between the AFP and these law enforcement agencies.[80]

2.101 The committee supports the widening of ACLEI's reach to other Commonwealth agencies with a law enforcement function in the longer term. However, it is vital that this is undertaken in a systematic and incremental manner with sufficient resources allocated to each stage of expansion. The extension of ACLEI's jurisdiction should not commence until ACLEI has fully established its corporate functionality as a statutory agency. The committee looks forward to giving this matter some consideration in its future work program.

Cross-jurisdictional arrangements

2.102 Those agencies currently under ACLEI's jurisdiction are frequently involved with other state and Commonwealth agencies through joint operations and/or the secondment of staff. Mr Milroy from the ACC stated:

The committee might be aware that not only do we have seconded state and territory police officers but also we have Federal Police, Customs, AUSTRAC, Centrelink—quite a large range—and tax officers who are seconded for a variety of reasons and funded by the ACC or donated by those respective agencies who are members of staff. There is a broad range of agencies involved.[81]

2.103 Deputy Commissioner Lawler from the AFP commented:

[T]his is a phenomenon that we are seeing within law enforcement in Australia and indeed around the world. That is, what we are dealing with by way of serious criminal acts, attacks on our society and our values and our way of life, and their complexity, requires close cooperation across a broad range of agencies and capabilities. It is rapidly reaching the stage where no one agency can do it all in isolation, and we rely on one another to bring different skills, attributes and capacities together. ...we are seeing this merging of and connectivity between the respective agencies.[82]

2.104 The committee sought information about ACLEI's jurisdiction over law enforcement staff in these circumstances. Mr Milroy from the ACC commented positively on the existing framework and expressed confidence in its capacity to deal effectively with officers potentially involved in corruption working under secondment or joint operation arrangements.[83]

2.105 ACLEI provided detail on the existing legislative arrangements contained in the LEIC Act:

Formal secondees to the AFP and ACC, whether they be sourced from State, Territory or Commonwealth government agencies or from State or Territory police forces, unambiguously come within the jurisdiction of the Integrity Commissioner as a result of their employment relationship. Sections 10, 29 and 30 of the LEIC Act primarily deal with issues to do with secondees.

Staff members of State, Territory or Commonwealth government agencies, or of State or Territory police forces, who are not formally seconded to, or staff members of, the AFP or ACC, are not subject to the Integrity Commissioner’s jurisdiction. This category includes staff from agencies engaged in joint operations or task forces. However, were information about corruption that relates to this category to come to the Integrity Commissioner’s notice, ACLEI may lawfully pass the information to the relevant State or Territory integrity agency (where there is one) or to the head of the officer’s agency.[84]

2.106 The committee is broadly satisfied that ACLEI's legislation has sufficient provisions to cover officers seconded to the ACC and AFP. However, the committee has provided further opportunity for commentary on this matter within the context of its inquiry into state law enforcement integrity models. Of particular interest to the committee are cases of informal secondment and the need to ensure that the highest standard for dealing with integrity matters is maintained across all jurisdictions.

Conclusion

2.107 The committee commends Professor John McMillan, for his significant achievements as Acting Integrity Commissioner in the first six-months of ACLEI's establishment and extends this commendation to the current Integrity Commissioner, Mr Philip Moss, and to his staff. The committee recognises that as the first national integrity body of its kind, those entrusted with the task of establishing ACLEI are, to an extent, dealing with uncharted territory. The committee does not underestimate the magnitude of this task.

2.108 It was clear from the evidence received that additional resources are required for ACLEI to undertake its increasing workload. The committee is pleased that this has been recognised in the 2008 Budget. The committee will monitor how these additional resources will be used and the anticipated impact on the organisation's capacity.

2.109 As ACLEI continues to establish its various functions and move to full corporate functionality the committee will monitor the following:

Developments on the implementation of workplace and corporate initiatives and internal governance mechanisms
Trends and issues in matters notified and referred

2.110 The committee is particularly appreciative of the open and cooperative manner that the Integrity Commissioner, Mr Philip Moss, has taken in his dealings with the committee. The committee recognises that a constructive relationship can only be realised if the committee approaches its role in a bi-partisan and similarly receptive way. The committee looks forward to building a productive working relationship with Mr Moss and officers from ACLEI.

Senator George Campbell

Chair

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