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Chapter 1

The Development of Controlled Operations Procedures in Australian Law Enforcement

What is a controlled operation?

1.1 The NCA describes a controlled operation as 'an investigative method in which a law enforcement agency becomes involved in specific illegal activity, involving the participation of an informant, agent or an undercover police officer'. The objectives of controlled operations are usually to enable offenders and their associates to be identified, evidence to be obtained, prosecutions subsequently brought and the criminal activity to be frustrated. [1] Controlled operations are a well used tool in law enforcement:

Everyone is aware that undercover agents (also known as covert police operatives) frequently make “controlled” purchases of drugs from persons engaged in unlawful drug-related activity. Law enforcement agencies the world over have long used such investigative techniques as a means of obtaining evidence of criminal offences. [2]

1.2 In legislative terms, various definitions have been adopted in those jurisdictions in Australia that have introduced controlled operations legislation. The significance of those definitions is that they limit to differing degrees the scope for the authorisation of controlled operations. The broadest definition is that contained in New South Wales legislation where the relevant definitions combine to provide that a controlled operation is:

… an operation conducted for the purpose of obtaining evidence of criminal activity or corrupt conduct, arresting any persons involved in such activity or conduct or frustrating such activity or conduct, which involves or may involve that which, but for the instant Act, would be unlawful. [3]

South Australia also has a broad-based definition, linking controlled operations to the investigation of serious criminal activity. [4]

1.3 Unlike its NSW and SA counterparts, the definition in the relevant Commonwealth legislation is narrow. The definition is contained in section 15H of the Crimes Amendment (Controlled Operations) Act 1996 which inserted a new part 1AB into the Crimes Act 1914. Under section 15H, the concept of a controlled operation is tied to the commission of offences against section 233B of the Customs Act 1901. This means that controlled operations can only be authorised in relation to the investigation of offences involving the importation of narcotics. The other two elements of the definition are that the operation must involve law enforcement officers and may involve a law enforcement officer engaging in conduct that would, but for the Act, constitute a narcotic goods offence. [5]

1.4 Covert operations have been a legitimate and common policing method in relation to the investigation of a wide range of offences. Historically, however, such operations were conducted in the absence of any legislative approval. Two important consequences flowed from that. Firstly, the evidence obtained as a result of those operations was subject to the legal concept of the exercise of judicial discretion to exclude evidence on the grounds of public interest at any subsequent trial. [6] Secondly, the operatives themselves had to rely on the favourable exercise of prosecutorial discretion so that they were not charged with any criminal offences arising from their work.

1.5 The development of controlled operations legislation marked a new era for law enforcement. It introduced a system of legislative recognition and approval for such work. The regime in Part 1AB of the Crimes Act 1914, however, only gives legislative recognition to a specific portion of this undercover work. One of the critical tasks for the Committee was to examine the extent to which this limited legislative recognition is still appropriate.

The significance of controlled operations in law enforcement

The investigation of organised crime

1.6 Organised crime is becoming increasingly sophisticated, globalised and well resourced. Consequently, law enforcement has to move from its traditionally reactive approach to investigating crime to a more proactive one. The view is widely held by law enforcement agencies that controlled operations are integral to the effective investigation of major criminal activity. The Queensland Crime Commissioner, Mr Tim Carmody told the Committee that:

Covert investigative techniques are often the most efficient, effective and, in the case of the more virulent strains of criminality such as organised and major drug related crime, the only practical way of obtaining evidence for the purposes of prosecuting and convicting those responsible. Sometimes the only viable investigative stratagem will necessarily involve trickery, deceit, subterfuge and even official instigation and inducement of crime. In those cases, an unrealistically strict requirement of observance of the criminal law hinders the law enforcement effort. [7]

1.7 In terms of uncovering drug related crime and collecting evidence, it is necessary for law enforcement agencies to infiltrate the 'classic secret organisations' [8] behind the criminality in order to gather the necessary intelligence about their activities. Infiltration can only be achieved by putting covert operatives into situations where they can obtain the intelligence that will enable the investigating agencies to devise appropriate strategems and directions. Consequently, the agencies involved argue strongly that controlled operations regimes are a necessary function of contemporary law enforcement. [9] Without in any sense derogating from the seriousness of the matter, Mr Carmody likened it to a game of rugby:

We are trying to understand who the people are, who is operating this business, who is connected with it, who are the lower players and who are the higher players. You cannot do that unless you are in the team. It is like a game of football. Everyone can see what the five-eighth is doing because he is out there on his own. But no-one knows what the second rower is doing in the scrum. What we want to do is get in that scrum so that we can see what is happening, who is doing what and where the networks are, who the personnel are. We can build a picture then, not only of specific criminal activity but of how it works overall across the states and across the country, where they are connected, across borders. [10]

1.8 It was the collective view of all the law enforcement agencies participating in the inquiry that law enforcement cannot have a significant impact on organised crime unless it becomes immersed in what the criminal organisations are doing. [11]

1.9 Organised criminal groups, such as those involved in the importation and trafficking of narcotics, are, however, extremely difficult to penetrate. [12] The investigation of this type of consensual crime differs from other crime in that there are no victims in the usual sense who are available to make a complaint and give evidence of the criminal activity. [13] Law enforcement is at a disadvantage because the 'victims' of drug crime are usually unwilling to assist authorities for fear of prosecution themselves. In addition, many 'victims' of drug crimes do not recognise that they are victims. [14] In the second reading speech for the Crimes Amendment (Controlled Operations) Bill 1995, drug crime was described as a 'clandestine criminal activity involving complicity, or participants who will remain silent for fear of retribution'. The rationale behind the Bill was that, properly regulated, 'controlled operations may lead to the detection of principals whose activities might otherwise never be discovered, let alone prosecuted.' [15]

1.10 The Committee acknowledges the efforts of law enforcement agencies to detect and prosecute those responsible for organised crime, particularly drug trafficking, and believes that there is also widespread community acceptance that covert operations are crucial to combat such criminal activity.

International acceptance

1.11 There is a high level of international acceptance of the use of controlled operations to combat the growing drug trade. As recently as June 1998, the United Nations Twentieth Special Session on the World Drug Problem recommended:

… that States, if permitted by the basic principles of their respective domestic legal systems, ensure that their legislation, procedures and practices allow for the use of the technique of controlled delivery at both the domestic and international levels, subject to agreements, arrangements and understandings mutually consented to between States. [16]

1.12 The use of such techniques is similarly reflected in article 11(1) of the Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances that came into effect in Australia in 1993. It reads:

1. If permitted by the basic principles of their respective domestic legal systems, the parties shall take the necessary measures, within their possibilities, to allow for the appropriate use of controlled deliveries at the international level, on the basis of agreements or arrangements mutually consented to, with a view to identifying persons involved in offences established in accordance with article 3, paragraph 1, and to taking legal action against them. [17]

Judicial approval

1.13 In Ridgeway v The Queen, the case that prompted the Commonwealth to introduce the Crimes Amendment (Controlled Operations) Act 1996, the High Court acknowledged that police methodology sometimes necessarily involves law enforcement officers in deception:

The effective investigation by police of some types of criminal activity may necessarily involve subterfuge, deceit and the intentional creation of the opportunity for the commission by a suspect of a criminal offence. [18]

1.14 This case is discussed in detail below at paragraphs 1.28-1.32. Suffice it to say that although the High Court acknowledged that these types of investigative methods are required in relation to certain criminal activities, on the matter before it the High Court exercised its discretion to exclude the evidence on public policy grounds in favour of the defence. [19]

Investigation of other crime: money laundering and the financial environment

1.15 Although this method of law enforcement is usually associated with the investigation of narcotic offences, there is widespread support for the use of covert operations to investigate other crime. AUSTRAC referred to the Financial Action Task Force on Money Laundering [20] which recommended that:

36. Co-operative investigations among countries' appropriate competent authorities should be encouraged. One valid and effective investigative technique in this respect is controlled delivery related to assets known or suspected to be the proceeds of crime. Countries are encouraged to support this technique, where possible. [21]

1.16 The relevant interpretative note encourages the use of the controlled delivery technique to assist particular criminal investigations, including money laundering. It asserts that appropriate steps should be taken to ensure no obstacles exist in legal systems to prevent controlled deliveries, subject to any legal requisites, including judicial authorisation for the conduct of such operations. [22]

1.17 Ms Elizabeth Montano, Director of AUSTRAC, told the Committee that in the international money laundering community, controlled deliveries are considered a very useful tool and that there are a number of scenarios in which the controlled delivery technique could be used in the financial environment. [23]

The extent and the manner of the NCA's involvement in controlled operations

1.18 On both national and international levels, the NCA plays a pivotal role in the investigation of organised crime and drug trafficking. It operates from a national perspective across jurisdictions and coordinates the national effort with state based partner agencies like the Queensland Crime Commission, the NSW Crime Commission, State based Police Services throughout Australia and the Australian Federal Police. [24] The NCA's work is typically 'multi-jurisdictional and international'. [25] An investigation may involve an exchange of intelligence or the coordination of an investigation between the NCA and a Hong Kong agency, the AFP, the ACS and various police services in Australia at any one time. [26]

1.19 The NCA relies heavily on its ability to conduct controlled operations as a means of infiltrating major organisers of tightly knit criminal syndicates. The NCA's investigative work over recent years has resulted in the infiltration of the higher echelons of some significant organisations. The intelligence gained in controlled operations has enabled the NCA to frustrate criminal activity at the planning stage and so reduce the level of narcotics that reach the street. [27]

1.20 The Third Annual Report on the operation of Part 1AB of the Crimes Act 1914 was tabled on 12 October 1999. Four certificates were issued by the NCA for the year 1998-99, and three of those operations were carried out. [28]

1.21 During 1997-98, 21 certificates for controlled operations were issued by the Chairperson or a Member of the NCA. [29] This contrasts to the preceding year when only nine certificates were issued by the NCA. [30] The 21 certificates in 1997-98 related to six separate investigations; multiple certificates were issued in respect of four of those investigations. The Annual Report indicates that in four cases, the controlled operation was not carried out but persons were nonetheless arrested and charged with criminal offences. In the fifth case, the operation was not carried out and the certificate was surrendered. In the sixth case, the controlled operation did proceed. It involved an importation of heroin in a compressed powder form with a total bulk weight of 298.91 grams and with a heroin content of about 228.4 grams. The following description of the operation, detailing the route through which the narcotic goods passed, appears in the Annual Report:

The parcel containing the mah-jong set was delivered to the Australian Federal Police (AFP) in Sydney by the ACS. The AFP then handed it to a member of the South Australia Police (who was also a member of the National Crime Authority) who brought it to Adelaide by plane. Upon arrival in Adelaide, that officer gave the parcel to another member of the South Australia police. That officer delivered it to 20 Arthur Street Pennington, where Mr Duc Ngoc Nguyen took delivery of the parcel. The police searched the premises a short time later and seized the parcel which was unopened. Mr Duc Ngoc Nguyen was then arrested and charged with possessing a prohibited import, contrary to section 233B of the Customs Act 1901. [31]

1.22 The NCA's involvement in joint operations under the controlled operations legislation in the states is also recorded:

Law Enforcement (Controlled Operations) Act 1997 (NSW): 26 certificates (and one variation) issued for joint operations between the NCA and the NSWCC in period 1998 to May 1999;

Criminal Law (Undercover Operations) Act 1995 (SA): 7 approvals issued for NCA operations from commencement of Act until May 1999;

Drugs, Poisons and Controlled Operations Act 1981 (Vic): 56 authorities issued for NCA operations between November 1997 and April 1999.

In addition, the NCA is party to many controlled operations that are the responsibility of other agencies. [32]

1.23 The NCA's involvement in controlled operations under the legislation is typically of three kinds:

• controlled deliveries, that is, forbearing during the importation or delivery of narcotics; [33]
• controlled purchases, that is purchasing/sampling drugs to infiltrate drug syndicates; and
• possessing narcotics during a controlled operation or controlled purchase.

1.24 In addition, controlled operations are often used in conjunction with other surveillance tools such as listening devices and telephone interception:

Information gathered during a controlled operation permits the strategic deployment of listening devices and the use of telephone interception at critical stages in the planning and execution of criminal activity. The combination of controlled operations and the strategic use of surveillance devices has resulted in significant arrests. The weight and cogency of prosecution evidence encourages guilty pleas. [34]

1.25 In assessing the importance of controlled operations to the NCA's investigative capability, it was claimed such operations are an essential weapon if the NCA is to cooperate in the international response to organised crime and to fulfil its functions as provided under the National Crime Authority Act 1984. The Committee was warned that the ability of the NCA to effectively investigate organised crime would be severely diminished if it were denied the authority to conduct covert operations. [35]

The development of controlled operations legislation

1.26 Although covert or controlled operations are a longstanding method of law enforcement, legislation specifically addressing their use was not introduced until 1996. Until that point, law enforcement agencies conducted covert operations knowing they had to rely on the favourable exercise of prosecutorial discretion to save them from the possible legal consequences of their technically unlawful activities. Although covert police operatives could have been charged with criminal offences in respect of their work this rarely, if ever, happened. In addition, the admissibility of evidence gathered during the course of such an operation was always in question, the prosecution having to rely on judicial discretion in the event that the evidence was challenged.

1.27 This was the state of affairs until the Ridgeway case which prompted the development of controlled operations legislation.

Case history: Ridgeway v The Queen

The facts

1.28 The facts in the Ridgeway case are important because they demonstrate the rationale behind the Bill [36] that inserted Part 1AB into the Crimes Act 1914. Ridgeway and Lee served sentences at the same time for drug related offences in a South Australian Prison during 1985 to 1987. Following his release, Lee became a registered informer for the Royal Malaysian Police. In 1989 Ridgeway contacted Lee and arranged a purchase of heroin for importation into and sale within Australia. The AFP and the Malaysian Police arranged a controlled importation and delivery of heroin to Australia using Lee, for the purpose of apprehending Ridgeway. In the course of the operation, the AFP sought and received an exemption from detailed Customs scrutiny under the relevant Ministerial Agreement. Subsequently, Ridgeway was apprehended by the AFP with 203 grams of pure heroin in his possession. Ridgeway was convicted in the South Australian District Court. His appeal to the Full Court of the Supreme Court was dismissed. Ridgeway obtained special leave to appeal to the High Court of Australia on three grounds: a defence of entrapment; abuse of process; and the public policy discretion to exclude evidence that has been obtained illegally.

1.29 It was common ground throughout the proceedings that the AFP had imported heroin contrary to section 233B(1)(b) of the Customs Act 1904 which, as stated above, essentially provides that any person who imports into Australia any prohibited exports shall be guilty of an offence.

The decision

1.30 The High Court, by majority, allowed the appeal and granted a permanent stay of proceedings in favour of Ridgeway in relation to any proceedings under section 233B of the Customs Act. The majority decision was that the importation of the heroin by law enforcement officers was illegal and therefore the evidence of that importation of heroin should have been excluded on the grounds of public policy. Had it been properly excluded during the trial, the prosecution would have been unable to prove a necessary element of the offence and Ridgeway would not have been convicted. Mason CJ, Deane and Dawson JJ were of the view that:

In these circumstances, the above-mentioned factors – ie grave and calculated police criminality; the creation of an actual element of the charged offence; selective prosecution; absence of any real indication of official disapproval or retribution; the achievement of an objective of the criminal conduct if evidence be admitted – combine to make the case an extreme one in which the considerations favouring rejection of evidence on public policy grounds are extremely strong. Against those considerations, one must weigh the legitimate public interest in the conviction and punishment of the appellant for the criminal offence of which he is guilty. The weight of that consideration in the present case is reduced by the fact that the appellant's possession of the heroin at the time he was apprehended constituted any one of a variety of offences against the law of South Australia of which illegal importation was not an element … . [37]

1.31 The court concluded that the considerations of public policy favouring the exclusion of evidence of the illegal importation of the heroin clearly outweighed the considerations of public policy favouring the conviction of the appellant of an offence under section 233B(1) of the Customs Act 1904.

1.32 In the course of their judgement, however, the justices said that the problems relating to the conduct of controlled operations should be addressed by the Legislature not the courts:

… in the context of the fact that deceit and infiltration are of particular importance to the effective investigation and punishment of trafficking in illegal drugs such as heroin, it is arguable that a strict requirement of observance of the criminal law by those entrusted with its enforcement undesirably hinders law enforcement. Such an argument must, however, be addressed to the Legislature and not to the courts. If it be desired that those responsible for the investigation of crime should be freed from the restraints of some provisions of the criminal law, a legislative regime should be introduced exempting them from those requirements. [38]

The Commonwealth's legislative response to the Ridgeway case

1.33 In response to the Ridgeway case, the Parliament enacted the Crimes Amendment (Controlled Operations) Act 1996, inserting Part 1AB in the Crimes Act 1914. That amending Act introduced a legislative scheme to provide for the conduct of controlled operations by Australian law enforcement agencies. The legislation is narrow in scope, only regulating controlled operations in the course of investigating offences under section 233 of the Customs Act 1901 or an associated offence. The legislation has no effect in cases where, for example, the NCA or other Federal law enforcement agency is investigating narcotic offences where importation is not an element of the offence.

Legislative scheme of Part 1AB of the Crimes Act 1914

1.34 A controlled operation is defined as an operation involving law enforcement officers that is carried out to obtain evidence in relation to possible prosecutions under section 233B of the Customs Act 1901 or an associated offence and may involve a law enforcement officer engaging in conduct that would, apart from subsection 15I(1) or (3), constitute a narcotic goods offence.

1.35 The authorisation process is as follows: An officer of the AFP, NCA, ACS or of a State or Territory police force in charge of a controlled operation may apply to either the Commissioner, Deputy Commissioner or Assistant Commissioner of the AFP or a member of the NCA (including the Chairperson) for a certificate authorising a controlled operation. If issued, the certificate has the effect of exempting the law enforcement officers from criminal liability in respect of any narcotic goods offences for which they might otherwise be liable. The exemption may extend to a member of a foreign police force but not to any civilians. The exemption from criminal liability does not apply if the conduct of the law enforcement officer involves entrapment (ie where the person was intentionally incited by the law enforcement officer to commit the offence, rather than voluntarily and with the necessary intent).

1.36 Section 15I(6) states that the exemption from criminal liability does not affect the criminality of the importation of narcotic goods under section 233B and does not exonerate the targets of the operation who may have conspired to import the narcotics.

1.37 Section 15M sets out the preconditions to the issuance of a certificate. The authorising officer must be satisfied that all available information about the nature and quantity of the narcotic goods has been provided; that, irrespective of the operation, the target is likely to commit an offence against section 233B (or an associated offence); that the operation will make it easier to obtain evidence of the offence; and that, after the operation, any narcotic goods in Australia will be in the control of an Australian law enforcement officer.

1.38 A certificate has effect for a maximum of thirty days only. Urgent applications may be made in person or by telephone or any other available means of communication but certificates cannot be issued retrospectively. The only retrospective operation of the scheme was to initially validate those controlled operations involving the importation of narcotic goods into Australia prior to the commencement of the Act for which prosecutions were still pending. In such cases, when determining the admissibility of evidence, the judge is to disregard the fact that law enforcement officers committed an offence relating to the importation if the officer was involved in a controlled operation for which there were administrative arrangements in place between the AFP and the ACS.

1.39 The scheme incorporates specific accountability mechanisms. The Attorney-General must be informed as soon as practicable after any decision in relation to an application and the reasons for the decision. A further report must be made to the Attorney-General detailing certain matters three months after the conclusion of the operation. The Attorney-General must table an annual report relating to the controlled operations conducted the previous year. [39]

Some preliminary observations

1.40 Compared to the legislative regime in New South Wales (discussed in detail below), the scheme in Part 1AB of the Crimes Act 1914 has been described as unnecessarily narrow and prescriptive by law enforcement agencies. Some of the views expressed include that the legislation is of limited application because the definition of controlled operation is so narrow that it does not assist the investigations of Federal law enforcement agencies into other narcotic offences not involving the importation of narcotics or their non-drug related work generally. Further, it has been pointed out that the legislation offers no protection to civilians/informers who assist law enforcement officers or participate in controlled operations. There is no provision for the retrospective authorisation of controlled operations and no provision for the renewal of certificates where operations exceed the thirty day period.

Review of Part 1AB of the Crimes Act

1.41 In 1998, the Attorney-General's Department conducted a review of the operation of Part 1AB of the Crimes Act 1914. The review was undertaken as part of a series of proposals aimed at enhancing Commonwealth drug law enforcement in the National Illicit Drugs Strategy. Although a large number of agencies, organisations and individuals were consulted, the Department only received ten submissions that contained substantive proposals for reform with law enforcement agencies arguing that their powers are too narrowly confined under the Act. Although a report is not publicly available in respect of that review, the Attorney-General's Department has advised the Committee that:

The Government has decided, as a matter of high priority, that improved controlled operations provisions should be developed. The amendments will form part of the Government's strategy to enhance the effectiveness of drug law enforcement. The Government has also decided to pursue increased consistency in law enforcement legislation and practice as between the Commonwealth, States and Territories. [40]

1.42 The Attorney-General's Department identified cross-jurisdictional operational problems arising from the lack of uniformity in legislation governing controlled operations throughout Australian jurisdictions. The Department submitted that these could be alleviated either by the introduction of nationally, uniform legislation or a combination of legislative initiatives. First, those States and Territories without controlled operations legislation could enact provisions to permit the authorisation and conduct of NCA controlled operations in each jurisdiction. Secondly, State and Territory legislation could be amended so that the NCA can authorise its own operations in each jurisdiction. Thirdly, Part 1AB could be amended so that controlled operations are not confined to the investigation of specified narcotics offences.

1.43 The Attorney-General's Department noted some of the proposals for reform. These included:

• Expanding the categories of offences the investigation of which could attract the immunity available under an authorised controlled operation;
• Enabling private persons engaged in controlled operations to have the same immunity enjoyed by law enforcement officers;
• Extending the time for which a controlled operation certificate can remain in force;
• Ensuring that all amendments preserve consistency between the AFP and the NCA and take account of the context in which the AFP operates. [41]

States and Territories legislation

1.44 Like the Commonwealth, NSW and SA have enacted controlled operations legislation in recognition of, amongst other things, the problems associated with controlled operations highlighted in the Ridgeway case. Those States and Territories that have not introduced specific controlled operations legislation continue to rely on judicial and prosecutorial discretion which, as demonstrated in Ridgeway, contains an element of uncertainty.

New South Wales

1.45 The Law Enforcement (Controlled Operations) Act 1997 (NSW) is considered the most comprehensive legislative regime in Australia and has been held up as the model for uniform legislation. [42] The salient points of the regime are:

• An officer of the NSW Police Service, the Independent Commission Against Corruption (ICAC), NSW Crime Commission or the Police Integrity Commission may apply to their Chief Executive Officer for authority to conduct a controlled operation. [43] A 'controlled operation' is broadly defined as an operation conducted for the purpose of obtaining evidence of criminal activity or corrupt conduct, arresting any persons involved in such activity or conduct or frustrating such activity or conduct, which involves or may involve activity that, but for the instant Act, would be unlawful. Authorities may not be issued unless a code of conduct has been prescribed by regulation for that agency;
• To justify issuing an authority, the chief executive officer must be satisfied, amongst other things, that there are reasonable grounds to suspect criminal or corrupt conduct within the administrative responsibility of the agency. In addition, the nature and extent of the criminal or corrupt conduct must justify the controlled operation and the nature and extent of the controlled activities must be appropriate to the suspected conduct and can be accounted for in detail under the reporting requirements of the Act. The CEO must also have regard to the reliability of information, the nature and extent of the suspected criminal activity or corrupt conduct and the duration and likely success of the proposed controlled operation;
• An authority may not be issued where a participant would be induced to engage in criminal activity or conduct that the participant would not otherwise engage in or where the health or safety of a person would be endangered or cause serious loss or damage to property. Civilians can only be used in certain controlled operations, for example, where it is wholly impracticable for a law enforcement officer to do so;
• An authority must bear certain particulars including the persons so engaged, the nature of controlled activities that civilians and officers may engage in and the period for which the authority is to remain in force. Authorities may also be renewed;
• the Act provides that an authorised activity undertaken in accordance with the authority is not unlawful and does not constitute an offence or corrupt conduct. The Act makes provision for retrospective authorisation of unlawful activity undertaken in life threatening situations but no retrospective authority is available in respect of an offence of murder or any offence for which the common law defence of duress would not be available;
• an authority may remain in force for up to three months;
• the Act declares certain activities with respect to assumed names to be lawful and excludes any civil liability on the part of those involved in an authorised operation in respect of conduct engaged in for the purposes of an authorised operation and undertaken in good faith;
• the Act confers a reviewing function on the NSW ombudsman so that the ombudsman is notified of the grant, variation or renewal of authorities and must inspect the records at least annually and furnish a report to Parliament; and
• the Act provides that where the identity of a participant in a controlled operation is in issue before, for example, a court or Royal Commission, unless justice requires otherwise, the relevant part of the proceedings must be held in private and the identity of the participant suppressed.

1.46 The NSW Police, ICAC, the NSW Crime Commission and the Police Integrity Commission agreed on a code of conduct for which provision was made in the NSW Law Enforcement (Controlled Operations) Regulation 1998. The significant provisions include that the applicant for an authority must act in good faith and make full disclosure and that participants in controlled operations must act in good faith. Further, the officer responsible for the controlled operation must ensure that all participants have a full understanding of the operation and obtain written undertakings from any civilian participants about the extent of their involvement.

Review of the NSW Act

1.47 Earlier this year, the Hon Mervyn Finlay QC, Inspector of the Police Integrity Commission, reviewed the Law Enforcement (Controlled Operations) Act 1997 (NSW). The report states that the parties with an apparent interest were involved in the process throughout the review. Those parties were listed as the NSW Police Service, ICAC, the NSW Crime Commission, the Police Integrity Commission, the Ombudsman, the AFP, the NCA and the NSW Attorney-General's Department. Although it had been expected that 500 controlled operations would be conducted in the first year of the Act's operation, in fact the number was far less. The distribution of controlled operations authorities granted to law enforcement agencies was as follows: the NSW Police Service, 123; the NSW Crime Commission, 23; ICAC, 2; and the Police Integrity Commission, 11. Reasons advanced for the low use of the Act included that:

• the paperwork required to obtain an approval is 'daunting';
• the time taken to obtain an approval is too long;
• an inability to nominate undercover staff as required due to lack of staff;
• the high level of senior officer authority required to authorise an operation;
• concerns about the legality of such operations and authorisations; and
• an unnecessarily restrictive interpretation of the Act. [44]

1.48 The review concluded that there is a need to amend the Act to enable the objectives of the Act to be achieved and to enable law enforcement agencies to use its provisions more effectively. Radical amendment was rejected in favour of an incremental approach, recommending amendment of the existing terms of the Act. Recommendations included:

• amendment of the Act to include the capacity to prescribe by regulation the NCA, the AFP and the ACS as law enforcement agencies thereby enabling those agencies to use the Act;
• amendment of the Act to permit delegation of the CEO's function of approving applications for a controlled operation to another high ranking officer, and, in the case of the NSW Police Service, to permit delegation to four other officers; [45]
• extending the time frame for which an authority to conduct a controlled operation may remain in force to 6 months; [46]
• permit CEO's to authorise controlled operations by telephone [47] or other means where an urgent response to information or circumstances is required and that the authorisation will be valid for 48 hours during which time, a full written application must be submitted; [48]
• amendment to the Act to prevent authorities from being invalidated by reason of a technical fault in the original, varied or renewed authority not being a defect that affects the substance of the authority in a material particular; [49]
• amendment to the Act to ensure that evidentiary certificates are conclusive evidence that the CEO was satisfied as to the matters listed to avoid CEOs being called to give evidence as to their satisfaction; [50]
• amendment to require that inspection by the Ombudsman of records relating to any particular controlled operation take place within 12 months of its commencement (rather than in every 12 month period). This will avoid the Ombudsman inspecting records of operations that have just commenced; [51]
• amendment to repeal the section relating to the renewal of authorities (because the section is little used and requires as much work as an original application) and instead to enable the section on variation of authorities to be used to extend the maximum duration of the original authority; [52]
• amendment to extend the period for reporting by the principal law enforcement officer engaged in a controlled operation to the CEO from 28 days to two months; [53]
• amendment to the Regulations so that non-urgent applications for variations may be made by means other than in writing [54] and that certain forms (application, variation and renewal forms) be prescribed by Regulation; [55]
• amendment to include a statement of intention in the Act to clarify Parliament's intention. This would help address concerns by law enforcement officers about their position in relation to possible prosecution for activities in controlled operations; [56]
• amendment for another review of the Act, after a further two year period. [57]

1.49 It is significant that suggested amendments that would extend the provision for the retrospective authorisation of unforseen controlled activities were rejected by Mr Finlay. Retrospective authorisation can be obtained in life threatening situations. The rejected proposal was that unforeseen (and unauthorised) activities undertaken either before or during a controlled operation should be authorised retrospectively where certain conditions are met. First, failure to undertake those activities would have jeopardised either the operatives involved or the operation. Secondly, the activities were of such a nature that they would reasonably have been approved under ordinary circumstances. Thirdly, the application is submitted within 24 hours of the activity having been undertaken.

1.50 Also rejected was a proposal to permit the CEO certifying that a matter is of such a sensitive nature that inspection by the Ombudsman be deferred for a period not exceeding 12 months. [58]

South Australia

1.51 The Criminal Law (Undercover Operations) Act 1995 (SA) provides that police superintendents (or above rank) may approve an undercover operation for the purpose of gathering evidence of 'serious criminal behaviour' being behaviour involving the commission of an indictable offence against the Controlled Substances Act 1984 or other specified statutory offences.

1.52 To give approval, the authorising officer must reasonably suspect that persons are engaging in or about to engage in serious criminal behaviour. The officer must also be satisfied that the undercover operation is proportionate to the suspected criminal behaviour, that the means are proportionate to the end and that there is no undue risk that persons without a predisposition to serious criminal behaviour will be encouraged to commit an offence. Approvals may be given for a period of three months and are renewable. The Attorney-General must be provided with a copy of approvals and table an Annual Report.

1.53 The effect of an approval is that, despite any other law, an authorised participant in an approved undercover operation incurs no criminal liability by taking part in the operation in accordance with the approval. The Act also seeks to have limited retrospective operation to cover participants in undercover operations approved prior to the commencement of the Act.

Other States and Territories

1.54 Victoria, Western Australia and the Northern Territory do not have legislative schemes in relation to the authorisation of controlled operations. In those jurisdictions, there are only piecemeal legislative provisions, generally targeted at police investigations into drug related crime. Although these provisions go some way towards addressing the evidential difficulties highlighted in the Ridgeway case, they do not constitute a comprehensive regime such as exists in NSW.

1.55 Although Victoria does not have any legislation specifically directed at regulating controlled operations, there is a legislative base upon which administrative and operational procedures for authorising and conducting such operations have been developed. For the purposes of the Victorian Police, controlled operations involve the controlled delivery or purchase of narcotics using either undercover police operatives or police informers. The Chief Commissioner of Police derives his authority to supervise and control the Victoria police under the Police Regulation Act 1958 (Vic). [59] In so doing, the Chief Commissioner may also make and amend orders for the administration of the police force and make and amend orders relating to the conduct of the force's operations. The procedures contained in the Victoria Police's Operating Procedure Manuals, which also contain the procedures for the conduct of controlled operations, is derived under that power.

1.56 The approval process in Victoria is both internal and tiered. The method for obtaining approval differs depending on the level of seriousness of the investigation proposed. All controlled operations conducted in investigations other than of a minor nature must be approved by either the Covert Investigation Target Committee or Deputy Commissioner (Operations). The Target Committee is comprised of a chairperson, being an officer in charge of State Crime Squads, and three other members, being another officer in charge of State Crime Squads, the Regional Crime Coordinator of the General Policing Department and the officer in charge of the Covert Investigation Unit. Approval at this level is not required, however, in relation to minor covert investigations that can be authorised by the officer in charge of the Covert Investigation Unit after consultation with the chairperson of the Committee. [60] Also, where a covert operation is needed in relation to the investigation of the summary offences of licensing, gaming or other offences of a vice nature, approval must be obtained from the District Commander. [61]

1.57 In Victoria, immunity from criminal prosecution for police officers and other persons for drug-related offences is contained in section 51 of the Drugs, Poisons and Controlled Substances Act 1981 (Vic). To qualify, the police officer or person must be acting under written instructions by a police officer not below the rank of senior sergeant. Section 51 states:

No member of the police force or person if the member or person is acting under instructions given in writing in relation to a particular case by a member of the police force not below the rank of senior sergeant shall be deemed to be an offender or accomplice in the commission of an offence against this Act although that first mentioned member or person might but for this section have been deemed to be such an offender or accomplice. [62]

1.58 In Western Australia, section 31 of the Misuse of Drugs Act 1981 provides limited protection for police officers and civilian participants in undercover drug investigations. The Commissioner of Police may authorise an officer or civilian to act as an undercover officer. In the course of detecting the commission of an offence that person may acquire a plant or drug without committing an offence or being declared an accomplice. Authorised civilians must deliver the plant or drug to a police officer as soon as reasonably practicable. Failure to do so will constitute an offence. The Northern Territory has similar provisions. [63]

1.59 The Tasmanian Minister for Police has foreshadowed the introduction of a Police Undercover Operations Bill in the near future. Queensland, however, apart from one minor exception [64], has no legislation governing controlled operations although it is understood to be under active consideration.

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Footnotes

[1] National Crime Authority, Submission volume, p. 88

[2] Criminal Justice Commission, Submission volume, p. 43

[3] Law Enforcement (Controlled Operations) Act 1995 (NSW), section 3, definitions of “controlled operation” and “controlled activity”

[4] Criminal Law (Undercover Operations) Act 1995 (SA), section 2

[5] See Crimes Amendment (Controlled Operations) Act 1996, section 15H

[6] The question in such cases being whether the public interest in obtaining a conviction and enforcing the law is so outweighed by unfairness to the accused in the manner in which the evidence came into existence or into the hands of the Crown, that, notwithstanding its admissibility and cogency, the evidence should be rejected: Bunning v Cross (1977-1978) 141 C.L.R 64 per Barwick CJ

[7] Mr Carmody, QCC, Evidence, p. 76. See also, for example, Criminal Justice Commission, Submission volume, p. 76

[8] Mr Carmody, QCC, Evidence, p. 80

[9] ibid.

[10] ibid., p. 82

[11] See for example, Mr Bradley, NSWCC, Evidence, p. 30. Amongst the list of law enforcement agencies participating in the inquiry were: NCA, AFP, NSWCC, CJC, AUSTRAC, Queensland Police Service and affiliated organisations and associations representing those police services.

[12] Mr Richard Perry, PIM, Evidence, p. 119

[13] Mr Bradley, NSWCC, Evidence, p. 30

[14] Messrs Bronitt and Roche, Submission volume, p. 137

[15] Second Reading Speech: House of Representatives Hansard, 22 August 1995, per the Hon Duncan Kerr MP, Minister for Justice

[16] Article V, Clause 5a

[17] See Schedule 1 to the Crimes (Traffic in Narcotic Drugs and Psychotropic Substances) Act 1990 (Cth)

[18] Ridgeway v The Queen (1995) CLR 19 at 37

[19] The Bunning v Cross discretion: See footnote 6

[20] The FATF is an international body established for the purpose of combating money laundering. Australia is a founding member of the FATF. There are currently 26 member countries and two member international organisations.

[21] Australian Transaction Reports and Analysis Centre, Submission No. 5, Attachment B, The Forty Recommendations of the Financial Action Task Force on Money Laundering, Recommendation 36

[22] Australian Transaction Reports and Analysis Centre, Submission volume, p. 80

[23] ibid.

[24] Mr Carmody, QCC, Evidence, p. 77

[25] National Crime Authority, Submission volume, p. 98

[26] ibid.

[27] National Crime Authority, Submission volume, p. 92

[28] Crimes Act 1914 Part 1AB Controlled Operations, Third Annual Report under Section 15T 1998-1999, pp. 131-137

[29] Crimes Act 1914 Part 1AB Controlled Operations, Second Annual Report under Section 15T 1997-1998, pp. 186-208

[30] Crimes Act 1914 Part 1AB Controlled Operations, First Annual Report under Section 15T 1996-1997, pp. 124-132

[31] Crimes Act 1914 Part 1AB Controlled Operations, Second Annual Report under Section 15T 1997-1998, pp. 208

[32] National Crime Authority, Submission volume, p. 92

[33] That is, although law enforcement agencies are aware that narcotic goods have passed or are passing through the barrier, the agency refrains from taking action at that point with the objective of following the goods to their intended recipient or for the purpose of gathering further intelligence about the persons/organisations involved in the importation.

[34] National Crime Authority, Submission volume, p. 93

[35] Hon Tom Barton MLA, Queensland Minister of Police and Corrective Services, Submission volume, p. 86

[36] Crimes Amendment (Controlled Operations) Bill 1995

[37] Ridgeway v The Queen 184 CLR 19 at 43

[38] ibid., p. 44

[39] There have been three such reports tabled.

[40] Attorney-General's Department, Submission volume, p. 115

[41] ibid., pp. 121-122

[42] The NCA stated that 'it is the NCA's view that there should be uniform legislation based on the NSW model, but taking into account the results of the recent review of the legislation': National Crime Authority Submission volume, p. 89. See paragraphs 1.47-1.50 for details of the review.

[43] There is no provision for the NCA Chairperson or Members to issue authorities in respect of NCA operations in NSW.

[44] NSW Inspector of the Police Integrity Commission, Report: Review of the Law Enforcement (Controlled Operations) Act 1997 (the Act), 16 April 1999, p. 10-11

[45] ibid., pp. 17-18

[46] ibid., p. 19

[47] Note: This is already available under section 15L of Part 1AB of the Crimes Act 1914 (Cth)

[48] NSW Inspector of the Police Integrity Commission, Report: Review of the Law Enforcement (Controlled Operations) Act 1997 (the Act), 16 April 1999, p. 27

[49] ibid., p. 31

[50] ibid., p. 32

[51] ibid., p. 33

[52] NSW Inspector of the Police Integrity Commission, Report: Review of the Law Enforcement (Controlled Operations) Act 1997 (the Act), 16 April 1999, p. 37

[53] ibid., p. 38

[54] ibid., p. 40

[55] ibid., p. 41, noting that if the renewal is repealed then the form recommended for renewals will not be required.

[56] ibid., p. 45

[57] ibid., p. 46

[58] ibid., p. 34

[59] Police Regulation Act 1958 (Vic), section 5

[60] Victorian Government, Submission volume, pp. 186-187 (Attachment A; Operating Procedures, Victoria Police Manual, Chapter 5, paragraph 5.1.15)

[61] ibid., pp. 187-188

[62] In Papoulias v R (1987) 31 Crim R 322, the Victorian Court of Appeal held that in cases involving the sale of dangerous drugs to undercover police officers where the requirements in section 51 were satisfied, the officers did not commit an offence against the Act and the evidence of those officers could not be rendered inadmissible by reason of the evidence having been illegally obtained.

[63] See Misuse of Drugs Act (NT), sections 31 and 32

[64] See Vagrants Gaming and Other Offences Act, section 41 which provides that police officers acting in the discharge of their duty and persons acting under their instructions shall not be deemed to be offenders or accomplices in the commission of any offence under that Act. Section 41 does not apply, however, to the commission of offences against the Queensland Criminal Code or the Drugs Misuse Act.