The nature of the activities performed by law enforcement officers at Australia’s borders means that some LEIC Act agencies operating at the border will always be working in an environment which poses significant corruption risk. Notable risks in relation to corruption-enabled border crime are associated with the importation of illicit drugs, the importation of illicit tobacco, visa fraud, and attempts to gain commercial advantage through the circumvention of Australia’s biosecurity processes.
3.1
This chapter provides a closer examination of border agency corruption, corruption risks at Australia's borders, and the challenges facing law enforcement agencies in maintaining border integrity in a constantly changing environment.
Border crime and corruption vulnerabilities
3.2
The Parliamentary Joint Committee on the Australian Commission for Law Enforcement Integrity (committee) heard from the Australian Commission for Law Enforcement Integrity (ACLEI) that the exact extent of corruption in border law enforcement agencies is unknown. There is no clear way of knowing how much corruption is occurring and how much it costs, 'due to the hidden nature of corruption and the ability of "trusted insiders"' to cover their tracks'.
3.3
Australia is ranked as the 12th least corrupt public sector out of 198 countries considered in Transparency International’s 2019 Corruption Perception Index. Although this index consistently ranks Australia as one of the least corrupt nations in the world, Australia’s ranking has continued to slowly decline since 2012, from an initial ranking of seventh on the index.
3.4
This international study correlates with annual State of the Service report surveys undertaken by the Australian Public Service Commission, which indicate there has been a rise in the number of public servants who have witnessed corruption, reported at 2.6 per cent in the 2013–14 period and rising to 4.4 per cent in the 2018–19 period. Publicly available investigation reports from ACLEI, as well as highly publicised arrests and prosecutions over recent years by the Australian Federal Police (AFP), have provided clear examples of corrupt activity related to organised crime within border law enforcement agencies.
3.5
In evidence to the committee in August 2017, the former Integrity Commissioner, Mr Michael Griffin AM, stated that:
We have uncovered officials accepting bribes…very substantial bribes… and setting people up through what is referred to as the honey pot process… – the full panoply of tools available to organised crime to identify a target and then exploit law enforcement officials across our agencies.
3.6
This integrity risk has continued, as ACLEI recently submitted to the inquiry:
Of the 146 notifications and referrals received by ACLEI in the 2018–19 financial year, 63 were from the agencies with primary responsibility for border functions.
3.7
ACLEI has also found evidence that, in addition to the infiltration and corruption instigated by serious or organised crime groups, 'there are indications also that some corrupt border officials are themselves directly involved in initiating criminal activity, as well as in concealing the crimes of others'.
3.8
The Australian Criminal Intelligence Commission (ACIC) has reported that there is limited evidence of serious and organised crime-led corruption in the wider Commonwealth public sector. However, as ACLEI's first submission to this inquiry pointed out: 'law enforcement officers subject to investigation by the Integrity Commissioner are likely to be familiar with law enforcement methods, and may be skilled at countering them in order to avoid scrutiny'. ACLEI, the ACIC, the AFP and other border law enforcement agencies have all recognised that border and law enforcement agencies have a heightened corruption risk due to the nature of their work, and the significant financial gains available to serious and organised crime groups from the movement of illicit goods and trafficking of persons across Australia's borders.
3.9
A fact sheet published by the Attorney-General's Department Measures to address organised crime at the waterfront, listed the kinds of criminal and corrupt activity that had been identified by law enforcement agencies as:
trafficking commercial quantities of illicit drugs;
providing information gained through their employment to criminal groups;
accessing containers in the terminals to collect illicit drugs for criminal groups;
playing an assisting role to other staff collecting illicit goods;
criminal syndicate members holding Aviation Security Identification Cards (ASICs) providing detailed Integrated Cargo System information to other syndicate members to enable planning and execution of robberies;
Maritime Security Identification Card (MSIC) holders assisting criminal groups by carrying out counter surveillance;
MSIC holders assisting criminal groups by taking cargo to locations not listed in any official reporting; and
border agency staff being close associates of serious and organised crime figures.
3.10
There has also been concern raised that improvements in law enforcement at Australia's borders may actually lead to the perverse outcome of a heightened corruption risk. The ACIC indicated that, in its view, greater competition amongst serious and organised crime groups for the attractive Australian illicit drugs market combined with a strengthening of law enforcement capabilities, is likely to result in 'increasingly sophisticated organised crime methodologies, including corruption of public officials'.
Identifying corruption vulnerabilities
3.11
ACLEI has undertaken significant work with border and law enforcement agencies to identify and address corruption vulnerabilities, through analysis of corruption investigations and reviews including, as mentioned in chapter 2, the fraud and corruption risk assessments undertaken by LEIC Act agencies every two years.
3.12
At the September 2020 inquiry hearing, the AFP agreed that corruption in the border environment continues to be adaptable:
AFP operational experience indicates that transnational, serious and organised crime and other serious criminal activities continue to pose a significant threat to the Australian community. The actors involved in serious crime are highly adaptable and resourceful. They will actively look for opportunities to exploit any potential vulnerabilities in Australia's aviation and maritime networks for their own criminal operations and activities.
3.13
During the course of this inquiry, the committee heard evidence in relation to the following corruption vulnerabilities:
the strong financial incentives for transnational organised crime groups to traffic illicit goods and persons into Australia;
the challenges inherent in balancing the facilitation of rapidly increasing legitimate flows of people and goods across Australia's borders with prevention of illicit movements;
inconsistencies in integrity systems, which introduce gaps and weaknesses able to be exploited by organised crime;
individuals or teams working in isolated conditions that characterise many border and related sites, including gaps in law enforcement due to limited resources at smaller facilities;
integrity and anti-corruption efforts mainly focussed on frontline border operations staff;
organisational expansion and change;
social capital as a driver of corruption;
COVID 19-related changes; and
the impact that Pacific region integrity vulnerabilities can have within Australia.
3.14
Each of these vulnerabilities is addressed in the following sections.
Organised crime and illicit trafficking
3.15
As already outlined in chapter 2, law enforcement and integrity agencies have long acknowledged that Australia is an attractive market for transnational organised crime groups. This is in part due to the established illicit markets and distribution networks already operating within Australia, which provide a degree of certainty and therefore significant profits for these operators. The former Integrity Commissioner also advised the committee that:
…[t]hough criminal methods are numerous, seeking corrupt assistance from relevant law enforcement and regulatory officials is one available option [to transnational organised crime groups]. High profit margins make this method affordable.
3.16
Within this broader context, the Australian aviation, maritime and international mail delivery sectors in particular are attractive to serious and organised crime groups. As the ACIC advised, these sectors:
…are a key link to the international illicit economy. They can facilitate the importation of illicit goods into Australia. As a result, criminal networks have an incentive to infiltrate these sectors by targeting and exploiting those in key positions in order to further their highly profitable criminal activities.
3.17
The ACIC informed the committee that in the 2016–17 period, the cost of serious and organised crime to Australia was up to $47 billion —including the costs of law enforcement as well as the general costs to the community — and half of that is 'income derived from the illicit importation of drugs and other commodities into Australia.'
3.18
The ACIC further noted:
Australia is a net user of serious and organised crime. When it comes to drugs in particular, nearly all of our drugs are imported…So you can see that this is a very large business, and it requires, essentially, to get through the ports or the airstream. To do that, it is a complex model. You cannot do that—it is impossible to do that—without some sort of corruption within the supply chain.
3.19
The Department of Agriculture, Water and the Environment (DAWE) gave evidence that organised crime is not just involved in these more 'traditional' forms of crime such as drug importation, but can also be involved in biosecurity issues:
The incentive for both importers and exporters to subvert our biosecurity rules have grown. There's no doubt about that—probably particularly on the export side. And I think it's widely accepted that there is more potential influence of both organised criminal groups and individuals to try and subvert those rules…it's clear the general risk environment has grown.
3.20
The AFP provided some insight into the kinds of corruption risks within border control agencies that can be associated with serious or organised crime groups:
Corruption is a key enabler for serious and organised crime, such as drug and weapon importation, money laundering and visa fraud. Criminal elements actively try to infiltrate agencies involved in border protection. A corrupt official may have access to information and systems that enable them to manipulate data or vulnerabilities in processes. Officials may also be able to use their positions to make or influence decisions, including what imports or passengers are screened and the granting of visas.
3.21
This is particularly relevant as agencies adopt risk-based approaches to screening of people and goods to cope with the increasing volumes of movements across borders, which is examined in more detail in the next section.
3.22
The AFP also provided insight into organised crime-related corruption vulnerabilities that may occur across the maritime supply chain, where corrupt officials can 'provide inside knowledge, access to ICT systems and/or access to remove concealments. Some private security companies contracted to protect key port infrastructure have strong associations with organised crime groups'.
3.23
Similarly, vulnerabilities to organised crime-led corruption may occur at a range of points across the aviation supply chain, including 'airport logistics and flight functions to air freight logistics, airport security, baggage handling and aircrew. Criminal infiltration enables criminal groups to exploit aviation vulnerabilities and bypass screening mechanisms, reducing the likelihood of illicit goods being detected'.
3.24
ACLEI submitted in April 2020 that the attempted corruption of border officers remains a 'real and significant threat in Australia', as border operations are 'integral to success for organised crime seeking to do business in Australia'.
3.25
ACLEI further submitted that several major ACLEI investigations 'uncovered evidence that organised crime groups actively recruit and compromise law enforcement and border officials to facilitate their illicit operations'.
Figure 3.How grooming happens
3.26
The Integrity Commissioner also raised an emerging concern in relation to visa fraud, where ACLEI had 'seen a lot of indicators of organised crime attempting to corrupt the visa issuing process, both domestically and offshore'. ACLEI's work in this area is described in greater detail below.
Increases in legitimate border movements
3.27
As outlined in chapter 2, the legitimate movement of people and goods across Australia's borders is increasing, notwithstanding the worldwide near shut‑down in people movements due to the COVID 19 pandemic, discussed later in this chapter. Home Affairs submitted:
Growing volumes of goods and people are moving through our border, placing pressure on Australia's ports and the Department’s capacity to facilitate efficient trade and travel while preventing illicit activity. Australia is also experiencing increasing volumes across its virtual borders in the trade of services, knowledge, data and ideas.
Australia’s borders are at risk from transnational, serious and organised criminal groups who seek to undermine Australia’s sovereignty by exploiting the global flow of people, goods, money and information, and profiting from illicit activities.
3.28
The services providing regulatory oversight of these movements face the challenge of accommodating these increases and managing significant volumes each year, while at the same time undertaking appropriate inspections and investigations to ensure that illegitimate movements are prevented, detected and prosecuted. The Australian Border Force (Border Force) has acknowledged the challenge of balancing high volume processing in its border operations with fraud and corruption control:
It's fair to say that there's certainly a significant increase in air and sea movement of both people and goods. The solution around that is pretty clear. We've got to move towards a risk-based profile, an intelligence system that is able to work with us, to work around the sorts of abilities to underpin and identify those…people or goods that are of risk so that we can direct highly skilled officers towards the highest risk.
3.29
Border Force has introduced a range of measures to reduce the tension between the facilitation of legitimate movements across Australian borders and preventing illicit movements. These include the introduction of new technology, for example SmartGates at airports, and expedited processing of cargo for 'trusted traders' through the Australian Trusted Trader Programme to manage increasing demand. At the same time, the Department of Home Affairs (Home Affairs,) introduced an 'intelligence-led, risk-based, targeted approach to threats'.
3.30
Home Affairs explained how the tension between fraud and corruption prevention, and productivity can affect operations:
Fraud and corruption controls will generally decrease individual decision‑making authority and impact efficiency and productivity. For example, the inclusion of a separation of duties on high volume decisions or transactions will require either an increase in staffing to manage the same volumes (efficiency) or a decrease in the number of transactions (productivity).
3.31
Home Affairs submitted that it manages its very high volume of work by delegating decision making across a large number of staff. In order to:
…compensate for the potentially lower level of prevention controls required by high volume processes, the Department has implemented two key mechanisms:
Measures that establish and support a high performance and professional culture resistant to corruption.
Quality assurance mechanisms including risk based sampling that includes fraud and corruption risk detection.
3.32
Similarly, the Department of Agriculture and Water Resources (DAWR) submitted that the environment within which it operates is both busier, with increasing trade volumes, and more complex, with an associated increase in the risk of fraud and corruption. In these circumstances, the DAWR noted that, while there are not a high number of fraud and corruption cases, 'there has been an increase in the number of matters we're referring to ACLEI, the AFP and so on'.
3.33
High volume processing in international mail centres also presents a risk. As noted in the ACIC report on illicit firearms in Australia, 'criminals find importation by mail attractive because it offers fast delivery, tracking and a reduced risk of scrutiny due to the high volume of mail entering Australia'.
3.34
The government announced a range of additional measures and funding in the 2018–19 Budget to address the increasing volumes of passengers and trade traversing Australia's borders, as well as enhance security. These include:
an additional $14.8 million over five years from 2018–19 for the cost of biosecurity clearances to address estimated passenger growth at all international air and sea ports;
trial of innovative technologies to achieve efficiencies in the biosecurity clearance of freight and passengers; and
provision of $293.6 million over four years from 2018–19 to strengthen aviation, air cargo and international mail security.
3.35
Australia Post provided evidence on the range of security and integrity upgrades they have undertaken during the course of this inquiry. These upgrades include the security improvement project which increased site security to 25 major facilities, to increase the organisation's capacity to audit persons who have access to Australia Post facilities and staff. Additionally, Australia Post improved the intelligence capabilities of the security system to inform the organisation of 'a variety of different risks, including those relating to integrity of our staff and folks with whom we work.'
3.36
In evidence to the committee in September 2020, Australia Post advised that while at the start of the COVID-19 pandemic there was a drop in volumes of international mail as air fleets around the world were grounded, in the three months prior to providing the evidence there had been a 'significant recovery in international mail coming into Australia', and Australia Post anticipated continued growth through to Christmas.
3.37
As discussed earlier in this chapter, both ACLEI and individual law enforcement agencies have noted that biosecurity and visa fraud are two areas with heightened concerns for corruption, and where such corruption is not necessarily only undertaken by organised crime groups.
Biosecurity
3.38
Biosecurity is a 'critical part of the government's efforts to prevent, respond to and recover from pests and diseases that threaten the economy and environment'. To date, the Australian Government's approach to biosecurity has enabled Australia to remain one of the few nations to remain free of the world's most serious pests and diseases. Australia's geographical isolation has assisted in this, but this advantage is 'rapidly changing as the barriers of time and distance become less relevant and international travel and trade increase'. DAWE noted that in 2018–19, over 270 000 items of biosecurity concern were intercepted on travellers.
3.39
Biosecurity functions are vulnerable to corruption where 'unscrupulous businesses may try to circumvent Australia's strong border regulations through forming corrupt or inappropriate relationships with public officials'. ACLEI noted that the majority of biosecurity related corruption does not involve organised crime groups. This can make it harder to detect this behaviour, which often comes to notice 'only when other individuals, companies or law enforcement officers observe and report the behaviour, or when there are robust systems in place to detect and analyse anomalous or abnormal activity'.
Visa fraud
3.40
As outlined above, a key concern for border-related corruption is in relation to visa processing. ACLEI noted in its 2017–18 annual report that the investigation of alleged visa fraud can raise a number of complexities related to operating internationally, such as 'legal, diplomatic and administrative challenges'.
3.41
Subsequent to raising these concerns with the committee, ACLEI was funded by the Australian Government via the Proceeds of Crime Act 2002 to establish the Visa Integrity Taskforce, to investigate allegations and intelligence about visa fraud that may involve law enforcement officers. ACLEI has reported the Visa Integrity Taskforce as experiencing 'considerable success in investigating alleged corrupt activity in visa processing'.
3.42
Beyond individual investigations, ACLEI has reported the Visa Integrity Taskforce undertakes a corruption deterrence function, by educating various agencies in how to recognise, report and investigate possible visa-related integrity concerns.
3.43
Home Affairs has concurred with this view of the success of the Visa Integrity Taskforce, and submitted to the committee that:
The Taskforce was successful in identifying alleged corrupt activity in visa processing – particularly involving off-shore locally engaged staff. The Taskforce’s findings assisted the Department to strengthen its ability to identify and investigate potential inappropriate activity in the processing of visa applications, as well as in hardening the Department’s systems and processes.
Changes in border movements: COVID 19
3.44
Evidence received by this inquiry pre-dates the COVID-19 worldwide pandemic. However, the Joint Committee on Law Enforcement is, at time of writing, conducting an inquiry into the impacts of COVID-19 on criminal activity and law enforcement. Home Affairs submitted to that inquiry that it does not appear that new integrity issues have arisen in relation to the pandemic:
Overall, the threat posed to Australia from serious and organised crime has not changed significantly during the pandemic. While some crime types reduced in risk over the short to medium term, the risk of other crime types has increased and organised crime groups have adapted their operations to continue functioning despite COVID-19 restrictions.
Complex multi-agency environment
3.45
As outlined in chapter two, Australia's border arrangements involve a complex structure of many different agencies performing different functions, often in a collaborative working environment. While this can bring with it many integrity strengths, such as external oversight, it can also bring some integrity challenges, as described in the following sections.
3.46
A recurring issue raised in this inquiry is the lack of consistency in integrity practices and systems across government agencies, and particularly across the entities—both government and private—involved in border operations, which can present a significant corruption risk. As the AFP has noted, '[corruption] controls are only as good as the weakest link, so, therefore, everyone needs a consistent approach'.
ACLEI's jurisdiction
3.47
The issue of ACLEI's jurisdiction has been examined in detail by this committee in an earlier inquiry. In relation to border integrity, the specific concern, which was considered in the 2016 inquiry, is that only part of the DAWE falls within ACLEI's jurisdiction. DAWE submitted at that time, that around one in seven of its staff fall under ACLEI's jurisdiction.
3.48
ACLEI's jurisdiction over the DAWE is established under Section 10(2E) of the Law Enforcement Integrity Commissioner Act 2006, and regulation 7 of the Law Enforcement Integrity Commissioner Regulations 2017. Initially, ACLEI's jurisdiction was limited to staff with waterfront regulatory functions or work locations that posed a high corruption risk. As of 2017, the committee was informed that:
Whether or not a staff member of the Agriculture Department falls within ACLEI’s jurisdiction will depend upon their position, duties and/or access to the Integrated Cargo System.
3.49
In relation to ACLEI's limited jurisdiction over DAWE, in 2017 the Integrity Commissioner stated that:
…only 1,200 or so of the people in that agency [DAWE] fall within our jurisdiction. That can be problematic. I have been on an operation where there have been people present who did not fall within my jurisdiction.
3.50
This is of particular concern when the Integrity Commissioner has identified that corruption may 'introduce significant biosecurity risk through lax procedures in the screening of agricultural imports'. In December 2018, the government announced that ACLEI's jurisdiction would be expanded to include the entirety of DAWE, as part of a broader initiative to introduce a Commonwealth Integrity Commission (CIC), of which ACLEI would become its law enforcement branch. At time of writing, draft legislation to establish the CIC has recently been released to inform a consultation to be conducted from November 2020 to March 2021.
3.51
The case of DAWE and ACLEI's partial jurisdiction reflects a broader concern raised by the Integrity Commissioner in relation to variations in perceptions, and management, of corruption vulnerabilities between frontline and non‑frontline officers.
Vulnerability of non-frontline staff
3.52
Traditionally, the focus of corruption detection and prevention efforts in law enforcement has been on frontline officers. ACLEI cites the assumption that corruption risk is not as great for non-operational 'back office' staff as one of its top five corruption prevention myths.
3.53
In its 2015–16 annual report, ACLEI stated that focusing on frontline staff is not sufficient or appropriate, given that:
…in reality, back office staff—such as corporate support or ‘unsworn’ public service staff—are at times more vulnerable to compromise. Back office staff can have similar or higher levels of access to sensitive information and systems as their operational colleagues...
3.54
The vulnerability to corruption of non-frontline staff in law enforcement and border agencies can be greater than that of frontline staff, given they are 'less likely to be provided with specific training to recognise attempts by organised crime to corrupt them, or their colleagues, and are therefore at risk'. This issue has already been recognised in a number of reviews and inquiries, including this committee's inquiry into the jurisdiction of ACLEI. That inquiry found that there is considerable merit in ensuring that ACLEI has jurisdiction over entire organisations and their functions, given that providing partial jurisdiction can lead to inconsistent approaches and the inability to fully investigate, detect and prosecute corrupt officials regardless of where they work within an organisation.
3.55
The focus on frontline or operational staff within agencies or with access to specific areas within air and sea ports has also been an issue in relation to the efficacy of ASICs and MSICs, which are discussed in greater detail later in this chapter. In a joint submission to the inquiry, the Maritime Union of Australia and the International Transport Workers' Federation were critical that MSICs are required by frontline staff working in specific areas within ports, but are not required for those who have:
…effective responsibility for the allocation of labour, the scheduling of ships, awarding transport logistics contracts and recruitment of employees. This is a small and identifiable group of people who have effective control of human resources and Australia's critical infrastructure.
3.56
The implications of an overly narrow focus on frontline staff can be significant. The case study highlighted in chapter 2, in relation to Operation Marca, included a Department of Agriculture staff member who was in a non‑frontline role. That staff member's involvement in corrupt activities was only able to be investigated and prosecuted due to the fact that it was a joint operation. The inquiry into the jurisdiction of ACLEI found that, had the investigation been conducted by ACLEI alone, it is possible that the DAWE staff member, and their conduct, may not have been detected, or if detected and investigated by ACLEI, may have been subject to challenge, or dismissed.
3.57
Similarly, ACLEI's Operation Galaxy, a joint investigation into the conduct of an ACIC information and communications technology (ICT) staff member, showed that ICT sections within agencies 'pose particular integrity and security challenges, because of staff members’ high levels of technical expertise, wide access to sensitive information, and the privilege to modify records and systems'.
Varying integrity focus and practices within shared working environments
3.58
The committee heard evidence about the integrity challenges presented where agencies undertake work in the same location, such as occurs in air and sea port settings and in international mail handling facilities.
3.59
Home Affairs stated that having more than one agency involved in border operations introduces corruption vulnerability:
[T]here are inherent risks involved with more than one agency being involved in frontline operations at the border, for example the Department of Agriculture and Water Resources (DAWR) controls the biosecurity at airports and seaports. Some of these risks include different levels of integrity controls, different management structures and issues in day‑to‑day processing which can present a higher fraud/integrity risk.
3.60
ACLEI described how, despite working in shared environments, 'historically, agencies have managed the risks that are within their control and have accepted the risks that are not within their control'. ACLEI also noted that the 'corruption risk at each worksite may differ from one another according to a range of factors that help dictate the level of threat—that is to say, a one size fits all approach is not always sufficient in high threat environments'.
3.61
The head of security at Gladstone Ports Corporation described two examples of circumstances that can enable corruption in the maritime environment: first, where interactions between officials and others occur in geographic isolation; and, second, 'small, isolated teams, which can form their own rules and standards, making them vulnerable'.
Varying integrity requirements between government agencies and private entities
3.62
Border operations take place at locations characterised by a wide range of parties involved in the movement of people and cargo. For example, at sea ports, government agencies 'engage with a wide variety of maritime industry participants…including ships' crews, shipping agents, provedores, stevedores, transport operators and port employees'. Airports provide a range of ancillary services, such as shopping and food outlets, which bring private entities into the border environment.
3.63
Home Affairs explained that due to the nature of its work, its staff are often located within the environment they regulate:
[T]he physical proximity and ongoing nature of the relationships between staff and these external parties is a potential risk and given the value of these assets it is likely that the Department will be subject to ongoing attempts to corrupt staff seeking to make a personal gain.
3.64
Home Affairs stated that the 'effectiveness of joint management can be constrained by commercial entity operations - Work Health [and] Safety (WHS), access to data and information holdings, access to CCTV, which in part can occur due to inadequate legislative provisions available to border agencies'.
3.65
The AFP identified the secure areas of privately owned or operated air and sea ports as presenting a challenge for investigation of crime and corruption, given that:
From an organised crime perspective, the fact is that those areas that are off limits to the public—for instance, that are under MSIC/ASIC control—are a hostile operating environment for law enforcement. It's very difficult for us to do the normal things we would do in the rest of the community. It's very difficult for us to do physical surveillance—almost impossible. It's almost impossible for us to do any electronic surveillance because of the fact that it's under the control of someone else. Introduction of any of our other covert-type activity is difficult based on the fact everyone knows everybody, and it's very difficult to penetrate that environment.
3.66
Integrity challenges can arise where management of border operations is the joint responsibility of government and private entities—for example, at licenced warehouses and depots. In relation to this, the then Integrity Commissioner told the committee:
What it means is, the point where it moves from my jurisdiction to the private sector may or may not be a weakness in the system. It depends very much on the strength of the agencies' own internal processes. The officer is…just a single representative of the department at that private premise. The issue then arises: how strong are the integrity arrangements for that officer?
3.67
ACLEI's Operation Karoola is a clear example of the corruption risk associated with private premises. The investigation, which concluded in 2017, examined the corrupt activities of a DAWE biosecurity officer conducting regulatory inspections at the premises of food importers, who used his inside knowledge to conduct a private consultancy business.
3.68
In its 2015–16 annual report, ACLEI stated that there is some evidence that local implementation of integrity systems 'can be weakened through an inconsistent approach to standards'. ACLEI particularly noted the potential impacts of 'closed environments', such as ports and airports on implementation of anti-corruption measures in government agencies.
3.69
In 2017, Gladstone Ports Corporation suggested that an integrity vulnerability at its three regional port facilities is the limited resourcing by Border Force, where there are just six or seven officers to service both the ports of Gladstone and Rockhampton, and just one or two at the Port of Bundaberg. These Border Force officers operate during business hours Monday to Friday, and are otherwise only available by contacting a call centre in Brisbane which then contacts the local Border Force office. The Port of Gladstone operates 24 hours a day, seven days a week: 'If you wanted to conduct criminal activity you would just start work at 5 o'clock in the afternoon'.
3.70
The Maritime Union of Australia and the International Transport Workers' Federation claimed that security regulation does not apply to container yards where outbound containers are packed ready for export. The Maritime Union of Australia and the International Transport Workers' Federation stated that container yards 'remain the only part of the chain of logistics not regulated consistently with national security standards', and, argued that:
…the existing security standards could easily protect the illegal activities of some crime and terrorist organisation by providing security around their containers through the entire logistic chain from unregulated packing yards through secured corridors to their unregulated destinations.
Security Identification Cards
3.71
The ASIC and MSIC schemes have been identified by all border and law enforcement agencies as presenting a key crime and corruption risk. For example, the AFP stated that:
AFP investigations have identified the importation of border controlled drugs into Australia, facilitated by trusted insiders working within the aviation environment. These employees were able to exploit processes, procedures, and their access to restricted areas within the airport because of their ASIC/MSIC status.
3.72
Unaccompanied access to secure areas of air and sea ports is restricted to holders of ASICs and MSICs. Escorted access to secure parts of airports is available to holders of Visitor Identification Cards, but the committee was informed that escorted access to secure areas of sea ports is allowed without any clearance of the visitor required.
3.73
The ASIC and MSIC schemes were established under the Aviation Transport Security Act 2004 and the Maritime Transport and Offshore Facilities Security Act 2003, which until December 2017 were under the responsibility of the then Department of Infrastructure and Regional Development, but have since moved to Home Affairs.
3.74
The schemes were originally designed to introduce minimum security requirements for people accessing secure port areas, and were focused on reducing the likelihood of terrorism. The schemes at their inception were not intended to address risks arising from serious and organised crime. Over time, as stated by the ACIC, 'gaps, weaknesses and inconsistencies in ASIC and MSIC schemes are exploited by serious and organised crime groups who seek to gain or maintain employment, disguise criminal interests and undermine access controls'.
3.75
The key issues raised in evidence to the inquiry in relation to corruption vulnerabilities of the ASIC and MSIC schemes are:
ongoing concerns in relation to the administration of the schemes;
the narrow range of criteria for denying an application or revoking a card; and
the reliance on static information to determine eligibility, and the present inability to use intelligence to determine or reconsider eligibility of applicants or card holders.
3.76
A number of inquiries into and reviews of the ASIC and MSIC schemes have been undertaken since 2004, during which issues in relation to the administration of the schemes, and the scope of the schemes to exclude people with relevant criminal histories and/or questionable associations, have been identified.
3.77
In 2017, a Senate Standing References Committee on Rural and Regional Affairs and Transport inquiry found:
…up to 20 per cent of all non-Customs staff (i.e. baggage handling, cleaners, screening staff, aircraft catering etc.) with access to the sterile areas having criminal convictions, and about half of those were serious convictions, including drug trafficking, assault and the other misdemeanours.
3.78
That committee recommended that:
…the Australian Government consider the development of a national automatic notification system for aviation-security relevant offence convictions of Aviation Security Identification Cards holders.
3.79
AusCheck, which coordinates all criminal background checks for ASIC and MSIC applications, told the committee that as of August 2017, considerable improvements to the administration of the schemes had been achieved, including a significant reduction in the number of issuing bodies (from over 200 in 2011 to 62 in 2017), and development of an ICT system to enable real‑time updates on ASIC and MSIC status to be provided to AusCheck by issuing bodies.
3.80
In October 2016, measures came into effect to improve the integrity of card issuing, enhance applicant identity verification, and expand the scope of background checking.
3.81
The last of these commenced on 1 August 2017, with the requirement for:
ASIC or MSIC applicants to have their identity verified in person by their issuing body, where previously cards could be applied for remotely; and
new categories of identification documents for ASIC and MSIC applications required, consistent with the National Identity Proofing Guidelines issued by the Attorney-General's Department.
3.82
More recently, amendments to the Aviation Transport Security Act 2004 and Maritime Transport and Offshore Facilities Security Act 2003 were agreed to on 7 October 2020 in the House of Representatives, under the Transport Security Amendment (Serious Crime) Bill 2020 (the bill). The amendments tighten the eligibility criteria under the ASIC and MSIC schemes to target serious criminal offences. Of particular importance, an agreed amendment to the bill ensures that part of the screening process includes a criminal intelligence assessment conducted by the ACIC. This was an amendment recommended by the Senate Legal and Constitutional Legislation Committee, as well as both the ACIC and Border Force. At time of writing, the bill has not yet passed through the Senate.
Inconsistencies between domestic and international airport security arrangements
3.83
Security requirements for passengers at domestic terminals are significantly weaker than at international terminals. One key concern is that there is no identification checking of domestic air passengers. This has led to some highly publicised breaches, and demonstrates a potential risk which could be exploited by serious or organised crime groups and presents a heightened corruption risk.
3.84
This is not a new issue. In a submission to the Parliamentary Joint Committee on the Australian Crime Commission inquiry into the future impact of serious and organised crime on Australian society in 2007, the NSW Police stated:
There are strong indications that cross border crime is shifting away from traditional locations at both the point of origin outside Australia and point of entry to Australia. Drug syndicates perceive some points of entry such as Sydney to have tighter security than others, and they have begun to utilise locations with perceived weaker security procedures, with subsequent transhipment to Sydney. In addition this approach will be or is already being adopted by crime syndicates for illicit commodities other than drugs.
3.85
This matter was also canvassed in the 2011 Parliamentary Joint Committee on Law Enforcement (PJC-LE) inquiry into the adequacy of aviation and maritime security measures to combat serious and organised crime. In relation to domestic air passenger security, the PJC-LE recommended that:
the Crimes (Aviation) Act 1991 be amended so as to create a new offence of deliberately travelling under a false identity; and
it be made a legal requirement to provide photo identification confirming passenger identity immediately prior to boarding an aircraft.
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In its response to the report in September 2011, the government agreed to create a new offence of deliberately travelling under a false identity, passing the Crimes Legislation Amendment (Serious Drugs, Identity Crime and Other Measures) Act 2012. However, the recommendation to require photo identification prior to boarding an aircraft has not been adopted.
Organisational expansion and change
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A corruption vulnerability which has been raised during this inquiry and in other fora by ACLEI, as well as by the Australian National Audit Office (ANAO) in an audit of the then Department of Immigration and Border Protection (DIBP), is that associated with organisational expansion and/or change.
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There have been significant changes in the agencies that oversee Australia's borders, particularly with the creation of the Home Affairs portfolio. ACLEI's corporate plan for 2017–18 states that the Integrity Commissioner's leadership in corruption prevention 'will become increasingly important as ACLEI's jurisdiction agencies evolve their systems to cope with changes in risk – including the establishment of the Department of Home Affairs'.
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Change, particularly for those agencies that now comprise Home Affairs, has been persistent. There is some evidence that there are legacy issues from earlier organisational changes that may have an ongoing impact. For example, the RAND Corporation's 2016 independent analysis of the merger of the Australian Customs and Border Protection Service and the then DIBP found that 'a backlog of integrity-checking investigations exists for many officers who have been in the department for some time but have never had such a background check'.
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ACLEI has stated that corruption vulnerability 'may also be heightened during periods of ...significant change, industrial action, or during the implementation of new policy or strategy'. A number of agencies, including Home Affairs and the AFP, have experienced delays in reaching closure on enterprise bargaining agreements, which may impact on staff morale and the ability to maintain high standards of integrity. Submissions to a 2016 Senate Education and Employment References Committee inquiry raised the lack of resolution in bargaining processes as an integrity issue.
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Submitters to that inquiry raised concerns in relation to inconsistencies between the pay and working conditions for workers in merged areas of Home Affairs where employees were operating under different enterprise bargaining agreements but doing the same work. This potentially creates an environment where the challenge of maintaining integrity in what is already a high risk workplace is heightened. The United Nations Office on Drugs and Crime, in its World Drug Report 2017, stated that corruption vulnerabilities can arise where officials believe they are treated unfairly: 'Indeed, research suggests that an official's perception of how he or she is treated may have a greater effect on the organisational culture of integrity than the size of [their] remuneration'. It is of interest to note that, in its submission to the independent review of the Australian Public Service (APS), Home Affairs indicated its support for 'a single approach to compatible and integrated systems access, security/integrity requirements, and pay and conditions across the APS'. Subsequently, as of early 2019, Home Affairs now has a single Workplace Determination made by the Fair Work Commission.
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A number of audits by the ANAO of border-related activities and operations by government agencies have brought to light circumstances that may present corruption risks in what are already high corruption risk border law enforcement agencies. For example, the ANAO indicated that poor record keeping by the DIBP had hampered its ability to conduct an audit into Border Force's use of statutory powers, and that six earlier audits between 2005–06 and 2016–17 had similarly uncovered poor record keeping within the then Department of Immigration and Citizenship and DIBP.
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A number of other ANAO audits identified failings in the administration of visa processing, and in the implementation of cyber security measures. In its report released in October 2017, the Parliamentary Joint Committee of Public Audit and Accounts also raised concerns in relation to the DIBP implementation of cyber security requirements.
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As the ANAO observed:
[T]here is a relationship between the processes of looking at internal corruption and the broader compliance to the extent that the broader compliance processes are effective, and that's got to support the corruption work. We've found that there is scope to improve the broader compliance activities and there is scope to improve the corruption area as well.
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In its 2018 audit of the effectiveness of the Australian Government's personnel security arrangements for mitigating insider threats, including the Attorney‑General's Department and Home Affairs, the ANAO found that:
The effectiveness of the Australian Government’s personnel security arrangements for mitigating insider threats is reduced by: AGSVA [Australian Government Security Vetting Agency] not implementing the Government’s policy direction to share information with client entities on identified personnel security risks; and all audited entities, including AGSVA, not complying with certain mandatory PSPF [Protective Security Policy Framework] controls.
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The audit report stated that Home Affairs, and the other agencies audited, while having in place plans, policies and procedures for personnel security, did not:
have adequate controls and quality assurance mechanisms for ensuring that personnel had appropriate clearances; nor
conduct an annual health check for security clearance holders and their managers.
Social capital
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Social capital is an emerging driver of corruption. This issue has been raised repeatedly in recent ACLEI annual reports. In its 2016–17 annual report, ACLEI found 'an increase in the number of public officials being influenced by non-financial motivators – such as through relationship grooming, social connections or familial relationships – which are often characterised by high levels of secrecy and concealment'.
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These new forms of non-financial corruption vulnerability were again highlighted in ACLEI's 2018–19 annual report:
A continuing theme observed during the reporting period is the extent to which social capital can expose law enforcement officers to corruption risk. It can be difficult for individuals to manage situations where group or cultural expectations conflict with the law enforcement responsibilities of the officer.
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In the border integrity context, ACLEI found this corruption can occur:
…where locally engaged staff in overseas posts exercise powers on behalf of law enforcement agencies. In some cases behaviour that could be considered as corrupt in an Australian context is viewed as normal in the other country.
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In a hearing to examine ACLEI's 2018–19 annual report, the Integrity Commissioner told the committee that it produces vulnerability briefs and factsheets for agency heads and their investigation teams on integrity risks such as social capital. The Integrity Commissioner informed the committee that 'different agencies have different levels of maturity in relation to all these risks' and that integrity requires all people working in law enforcement agencies to be 'continually vigilant about our social connections'.
Vulnerabilities in regional trading partners
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Australia is impacted by weaknesses in regional trading partners' capacity to maintain the integrity of border-related agencies. Australia and New Zealand have undertaken a range of measures to improve this, as outlined below, but more work is needed. Home Affairs submitted:
Australia continues to experience economic growth driven in part by increasing wealth and trade across the Indo-Pacific. The Department needs to be prepared to manage the implications of evolving global trade relationships that have an effect on Australia’s industries, supply chains and labour markets.
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The Pacific Step-Up program is one example of this work to improve regional security and economic stability, and includes supporting nations on public institutional integrity issues, with Australian aid programs in the Pacific region being focused on increasing transparent and accountable government.
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As part of this inquiry, the committee undertook a delegation visit to New Zealand and Vanuatu on 9–13 December 2019, to consider anti-corruption measures used by border agencies in nearby jurisdictions with which Australia has a close association, as partners in addressing transnational crime and corruption and as providers of advice and assistance. This is of particular importance as ACLEI has reported that a number of its investigations now involve international operations. A full report on that delegation is included at Appendix 5.
New Zealand
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New Zealand is perceived to be relatively free of corruption, and has been ranked at or near first place in Transparency International's Corruption Perception Index. However, in its annual reviews of New Zealand's Serious Fraud Office (SFO), the Parliamentary Justice Committee reported that the office had experienced an increase in bribery and corruption investigations.
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The delegation was informed that New Zealand has experienced an increase in Organised Motorcycle Gang (OMCG) numbers and activities, with external influences bringing in new skills, knowledge and expertise that has increased the seriousness of the criminal behaviour of organised gangs, such as increased efforts by OMCGs to infiltrate policing agencies. In response, New Zealand Police now have pre-employment drug and alcohol testing and all police employment goes through an enhanced assessment to test for any gang affiliation. In addition, specialist policing squads are subject to random drug and affiliation tests throughout their employment period. In addition, New Zealand Police have recently developed anti-corruption training, particularly targeting younger police who may feel vulnerable to influence from people trying to use personal connections, such as through church networks, to create relationships that can be later used for corruption.
Vanuatu
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Australia has had a direct law enforcement relationship with Vanuatu for a number of years via the AFP, who are deployed to deliver capacity development and other assistance to the Vanuatu Police. The Australian government, through funding provided to multilateral agencies, provides support for transparency and anti-corruption activities in the Pacific region, including funding for the United Nations Pacific Regional Anti-Corruption Project (UN-PRAC), which commenced in 2012 and will conclude in 2020. Vanuatu has benefitted from assistance through UN-PRAC in strengthening its integrity system.
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The delegation heard that Vanuatu has faced challenges in addressing systemic corruption issues. While there has been some legislative and policy changes, the implementation of investigating and prosecuting individual cases of corruption has not been as successful.
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The Justice and Community Directorate has been instrumental in driving anti‑corruption work in Vanuatu, pushing to establish a National Anti‑corruption Framework, with civil society playing an important role in raising awareness of the importance of anti-corruption work.
Conclusion
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Australia experiences a number of corruption vulnerabilities across a range of factors, some of which can be outside the direct influence of the Australian Government. These vulnerabilities are also changeable, requiring new approaches.
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The following chapter will discuss these vulnerabilities, and offer some potential enhancements.