Appendix 4

Appendix 4 The establishment of the National Crime Authority the role of a specialised investigative agency to counteract organised criminal activity*

Introduction

While organised crime has arguably existed in Australia since the days of the notorious New South Wales Corps, it was regarded as an outgrowth or extension of general criminal activity in the community. The idea of organised crime as something different and a matter for public and political concern first developed in Victoria in the early 1960s, after a series of murders and attempted murders at the Queen Victoria Produce Markets in Melbourne. In May 1964 the Victorian government commissioned a police officer from the United States, Mr J T Cusack to study and report on the investigation into those crimes. In August 1964, Cusack reported that there was a secret criminal society of Calabrian origin operating in Victoria (which he named variously, including as 'Ndrangheta) and that the society also existed in New South Wales, South Australia and Queensland. He linked the crimes at the markets to the operations of 'Ndrangheta.

Cusack suggested that, if it remained unchecked, 'Ndrangheta was capable of diversifying into all aspects of organised crime along the lines of and linked to groups operating in Italy and the United States. This prospect generated significant public concern. Among Cusack's recommendations was that a Bureau of Criminal Intelligence be established within the Victoria Police to assist in dealing with organised criminal activity.

The Royal Commissions

In August 1973 the New South Wales Government appointed Mr Justice Moffitt to head a Royal Commission into Organised Crime in Clubs. The appointment of the Commission followed a period of publicity and inquiry concerning allegations that the Bally poker machine company, which was allegedly linked to organised crime in the United States, was seeking to expand its interests in Australia. It was also alleged that this would allow US-style organised crime to develop and diversify in Australia. Police investigations into the matter had been inconclusive, and their reports contradictory, leading to allegations of corruption in the State police force.

Justice Moffitt found there was a real danger that organised crime from overseas would infiltrate Australia. In his final report, he identified the difficulties investigating organised crime presents to law enforcement agencies. Among his recommendations was a 'frank and drastic review of the methods of investigation of organised crime of overseas and local origin and that particular procedures be established appropriate to this as a special class of crime'. He further recommended that a special squad of police be trained and established to deal with aspects of organised crime and that a 'task force' method be incorporated within this special squad.

In 1977, following the disappearance of anti-drugs campaigner Donald Mackay, a New South Wales Royal Commission into drug trafficking headed by Mr Justice Woodward began an examination of aspects of organised crime as they related to the drug trade in Australia and in particular the alleged operation of secret societies engaged in criminal activity and based in the Italian community. The Commission received evidence of the existence of a secret Calabrian society operating in New South Wales, which was involved in the cultivation and distribution of marijuana, together with money laundering, intimidation and other illicit activities.

In October 1977 the Governments of Victoria, Tasmania, Western Australia and Queensland, together with the Commonwealth established the Australian Royal Commission of Inquiry into Drugs headed by Mr Justice Williams. The Commission was required to report on the extent to which illegal importation, exportation, production and trafficking in drugs was being engaged in by persons who engaged on an organised basis in other illegal activities. The Commission found that persons who engaged in other areas of organised crime were involved in importation, production and trafficking of drugs and that dealing with these criminal figures and others like them placed a far larger burden on law enforcement than that imposed by criminal elements acting without the 'shield of an organised basis'.

Justice Williams noted that the efforts of traditional law enforcement agencies were designed for and directed towards reacting to complaints of offences already committed. Their objectives were to identify the offender, to secure evidence as to his involvement and ultimately his conviction. In addition, existing law enforcement agencies had to deal with the 'sheer pressure of continuing individual criminal activities'. Justice Williams went on to note that the criminal law in Australia was 'ill-equipped to deal with any organised basis for illegal activities' and that those who were engaging in such illegal activities were not constrained by territorial boundaries, considerations of statutory power and organisational responsibilities which constrain law enforcement agencies.

In a joint memorandum, the Woodward and Williams Royal Commissions made recommendations to the Commonwealth and New South Wales Governments regarding the effectiveness of existing law enforcement agencies in dealing with the problems posed by organised crime. Those recommendations emphasised the critical lack of coordination between State and Federal agencies, wasteful deployment of resources and duplication of effort and recommended that a Joint Task force be set up to secure the conviction of persons engaged in drug trafficking.

In September 1980 the Commonwealth and Victorian Governments established a Royal Commission to inquire into the activities of the Federated Ship Painters and Dockers Union to be headed by Mr Frank Costigan, QC. The Commission was established originally to inquire into the involvement of the Union, known to have a high proportion of former criminals in its membership, in criminal activity at the Williamstown Naval Dockyard. Those original inquiries subsequently led to much broader investigations into fraud, tax evasion and corruption.

In his Interim Report No 4 presented in July 1982, Mr Costigan drew attention to the difficulties he perceived are placed in the path of law enforcement agencies in attempting to suppress organised crime. He noted that:

existing law enforcement agencies lacked sufficient appropriately qualified and trained personnel to undertake the complex analysis and investigations required in the area of organised crime;
those law enforcement agencies were not properly equipped particularly in terms of administrative support and information technology; and
existing law enforcement agencies lack the power necessary to investigate complex organised crime, particularly in the areas of fraud and corporate crime.
In June 1981, the Commonwealth Government, together with the Governments of New South Wales, Victoria and Queensland established a Royal Commission of Inquiry into Drug Trafficking, headed by Mr Justice Stewart. The Commission was established to inquire into the activities of a criminal group consisting of Australian and New Zealanders, involved in the movement of drugs from South East Asia to Australia and New Zealand and also to the United Kingdom.
Justice Stewart examined the difficulties presented to Australian law enforcement agencies by organised crime groups involved in the drug trade. He noted that drug law enforcement in Australia was not only hampered by geographical divisions, but also because both Commonwealth and State laws prohibit different aspects of the drug trade. He drew attention to the findings of the Williams Royal Commission concerning the fragmented approach to problems posed by organised crime adopted by law enforcement agencies in Australia and endorsed Justice Williams' recommendations for a cooperative approach. He noted that investigations into organised crime were long term, demanding and complex and that the resources, powers, procedures and techniques available to existing law enforcement agencies were inadequate to deal with the problem.
From the appointment of the Moffitt Royal Commission in 1973 until the finalisation of the Costigan and Stewart Royal Commissions in 1983, Australia had an almost continuous series of inquiries into aspects of organised crime. Those Royal Commissions generated significant public and political concern about the impact of organised crime on Australian society. At the same time, there was general recognition that existing law enforcement agencies lacked the capacity to deal effectively with organised crime. There were several reasons for this perceived lack of capacity:
criminal investigation was traditionally reactive rather than proactive;
police services were constrained by the pressure of dealing with investigating individual criminal activities which prevented resource commitments to longer term investigations of patterns of criminal activity necessary to deal with organised crime;
organised crime was able to transcend administrative, jurisdictional and even national boundaries, while Australian law enforcement agencies' efforts were fragmented, were not cooperative and there was a general failure to exchange information and intelligence;
there was a lack of co-ordination between State and Federal agencies with consequent wasteful duplication of effort;
police forces lacked the resources and specialist expertise, including lawyers, accountants and computing specialists needed to attack criminal syndicates; and
police forces lacked the coercive powers needed to secure evidence and documents in complex cases.
The National Crimes Commission
In response to community and political concern Australian governments began to consider the need for a new law enforcement agency at the national level, equipped with coercive powers, skills and resources to lead the fight against organised crime. The Commonwealth's answer to the problem was the establishment of a body providing a core of expertise and special powers that would investigate organised crime and prosecute persons involved in such crime. The Government considered that giving coercive powers to a body with limited size, special qualifications and the status of a Commission would be more acceptable to the community than giving the same powers to existing police forces. [1]
In December 1982, the Commonwealth Government passed the National Crimes Commission Act 1982. The Act confined the Commission's primary jurisdiction to offences against the law of the Commonwealth or a Territory, the influencing or attempting to influence a Commonwealth or Territory officer to do an act contrary to law or his duty or authority and activities impeding the implementation or enforcement of a Commonwealth or Territory law. In addition, provision was made for the Commission to perform functions conferred on it by State law and for members of the Commission to exercise functions and powers conferred by a State, concurrently with functions and powers conferred on them by the Act.
The newly created National Crimes Commission would assume matters for investigation identified by the Costigan Commission. The Costigan Commission represented a substantial commitment of money, manpower and expertise which might otherwise be dissipated. As the Stewart Commission had almost completed its inquiries, its remaining work would also be taken up by the Commission. Work being undertaken by two Special Prosecutors, Mr Gyles QC and Mr Redlich would be reconsidered in the light of the formation of the Commission. [2]
In March 1983 there was a change of Commonwealth Government as a result of the election. The incoming Labor Government committed itself to a review of the National Crimes Commission Act 1982 and the yet to be established National Crimes Commission. The incoming Government considered that, while there was widespread support for the concept of a permanent National Crimes Commission, there remained a good deal of uncertainty and disagreement as to the most appropriate functions, composition and powers of such a body. In April 1983 the Government decided that a further process of consultation and review was necessary.
The Special Minister of State and the Attorney-General, who between them, had responsibility for the Commonwealth Government's mainstream law enforcement interests, tabled a policy discussion paper [3] in Parliament and circulated it widely. The discussion paper noted that the existing policing arrangements were not an appropriate response to organised crime because:
Commonwealth, State and Territory police forces are eight separate and distinct bodies, each restrained by jurisdictional boundaries. Organised crime operates without regard to jurisdictional boundaries;
it is widely accepted that powers to compel the production of documents and the attendance of persons are an essential part of the armoury to combat organised crime effectively. The community is not prepared at the present time to accord powers of that nature to police; and
police services already have enormous demands placed on them in satisfying the everyday needs of the community. The body tasked with the attack on organised crime must be out of the mainstream, free of other pressures on its resources or calls upon its time. The problem of organised crime requires a concentration and dedication of resources if inroads are to be made.
A National Crimes Commission Conference, attended by over 100 representatives of Commonwealth, State and Territory governments, police, the legal profession, civil liberties organisations, royal commissioners and other interested individuals was held on 28 and 29 July 1983 in Parliament House. Much of the debate centred around the functions and powers of the National Crimes Commission and the need to achieve a balance between action to combat organised crime and the preservation of individual rights and liberties.
A significant element of the debate involved the lack of any real role for the States and the Northern Territory in the National Crimes Commission and their subsequent rejection of any form of participation in the new body. The discussion paper noted that the only really satisfactory arrangement for law enforcement in Australia would be the full participation of the States and the Northern Territory in the National Crimes Commission. It stated that the Commonwealth Government's objective was to achieve an instrument by which the 'serious and growing' problem of organised crime might be most effectively attacked 'not just by one government, but by all governments of Australia and their law enforcement agencies'.
A series of discussions were subsequently held with the States and Northern Territory, culminating in a meeting on 9 September 1983 between the Commonwealth Attorney-General and the Police Ministers. Those meetings reached substantial agreement on a model for the National Crime Authority.
National Crime Authority
The resulting National Crime Authority Bill was introduced in the Senate on 10 November 1983 and was subsequently referred to the Senate Standing Committee on Constitutional and Legal Affairs. The Committee's report was tabled in the Senate on 1 May 1984. In introducing the Bill in the House of Representatives, Mr Duffy, Minister for Communications, noted that the Government believed that the Bill met the major objectives and concerns which emerged during the public debate on the Crimes Commission, namely:
the need to avoid the fragmentation of effort identified by the previous series of Royal Commissions and to ensure co-ordination and continuity in the fight against organised crime;
the need to maintain intact the resources and expertise of the Costigan Royal Commission and to ensure the continuity of its work;
the need to take account of the many fears and concerns expressed about a permanent criminal investigation body with unlimited terms of reference and uncontrolled investigative powers; and
the need to secure the active involvement and cooperation of the States.
The National Crime Authority Act 1984 received Royal Assent on 15 June 1984 and the date of commencement was 1 July 1984. It repealed the National Crimes Commission Act 1982. The National Crime Authority established by that legislation was supported by the State and Northern Territory governments, which all passed legislation to underpin the Commonwealth legislation. This legislative structure gives the NCA the authority to act in all Australian jurisdictions.
The environment in 1993
There is no doubt that opportunities for organised criminal activity continue to exist, and are exploited, in Australia. The difference between organised criminal activity now, compared with the late 1970s and early 1980s, is that it has developed in the same way that legitimate commercial activity in Australia has developed, on the basis of technological, economic and regulatory changes in that period. Changes in the business and social environment in Australia offer a variety of changing opportunities for criminal exploitation. Australian criminal networks and criminal networks and organisations in other countries have taken advantage of the increased ease and speed with which people, money, goods and services can move from country to country. Illegal enterprise in Australia is becoming integrated with the global economy.
There are several organised criminal networks active in Australia. The activities of some networks are centred in particular cities or towns and spread into other Australian jurisdictions. Some networks based in Australia are establishing interests in other countries. There are indications that criminal organisations or networks based in other countries are attempting to establish a presence in Australia, or may do so in the future. In pursuit of their interests, these networks commit a range of offences against Commonwealth, State and Territory laws. The extent of their activities becomes apparent when information and intelligence from all jurisdictions where they are active is synthesised nationally and disseminated to the law enforcement agencies in those jurisdictions.
Certain types of complex crime, such as fraud and corporate crime are more prevalent than they were in the 1970s and early 1980s. Offences of this type are generally committed by individuals outside identified criminal networks and organisations targeted by law enforcement agencies. They generally involve larger sums of money and complex webs of transactions and related corporations, some of which are resident in other countries. Offences of this type can have substantial impact on the community in terms of cost and loss of confidence in financial and other institutions. It can affect Australia's reputation as providing a well regulated business environment and consequently the investment climate in Australia.
Law enforcement in 1993
Commonwealth, State and Territory Governments share responsibility for law enforcement in Australia. State and Territory Governments have general power and responsibility to maintain public order and to protect the persons and property of individuals resident in their jurisdictions. The Commonwealth has direct interests in law enforcement under its Constitutional mandate. It also has a role to play in national law enforcement.
Police services are better equipped than ten years ago to deal with complex crime. They are attracting recruits with good educational qualifications and are supporting training in law, accountancy and other relevant disciplines. Most police services have made major investments in computer systems.
However all Australian police services are to some degree hampered by inherent difficulties in dealing with the perpetrators of complex fraud, corporate crime or other organised criminal activity in Australia. These difficulties include:
jurisdictional limitations in investigating offences. State or Territory Police can investigate offences against their State or Territory legislation. The AFP have jurisdiction to investigate offences against Commonwealth offences. They have legal limitations on their range of action. Organised crime operates without regard to jurisdictional boundaries. The legislative structure of the NCA, as a specialised investigative agency, gives it the power and authority to operate in all Australian jurisdictions;
the publicly imposed requirement that police services respond immediately to information about individuals who have committed or are committing offences. A consequence of this is that it is difficult for police services to commit resources to long term investigations of patterns of criminal activity; and
police services do not have the coercive powers available to a specialised investigative agency such as the NCA, through its legislation. Those powers are generally accepted to be necessary to successfully investigate complex and organised criminal activity.

The criminal environment Australian law enforcement agencies must deal with over the next decade is one of considerable flux, both in terms of the networks and organisations which might become prominent in that time and the level of technological, institutional and regulatory change which will have an important bearing on the kind of criminal activity that will come to the attention of law enforcement agencies. An essential element of Australia's law enforcement arrangements is the capacity to make a concerted and effective national response to problems that are identified as national priorities.

The role of a specialised agency in counteracting organised crime continues to be important. This is because such an agency is able to overcome the inherent difficulties police services face in counteracting the organisations or networks themselves as opposed to dealing with the effects of their activities. The legislative base of the existing specialised agency, the NCA, gives it authority from all Australian Governments to operate in their jurisdictions.

Footnotes

* Reproduced from Report of the Review of Commonwealth Law Enforcement Arrangements, AGPS, Canberra, February 1994, pages 325 - 333.

[1] National Crimes Commission. Commonwealth Paper. Issued by the Commonwealth Attorney-General, Sen. the Hon. Peter Durack QC. August 1982.

[2] The proposals for the implementation of the National Crimes Commission are contained in a letter from Sir. Edward Williams, Chairman Designate of the National Crime Commission, to the Rt Hon. Malcolm Fraser, Prime Minister, dated 3 March 1983.

[3] A National Crimes Commission? June 1983. The Hon. M. Young, Special Minister of State and Senator the Hon. G. Evans, Attorney-General. Canberra, AGPS. 1983.

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