Overview and Development of the Bill
3.1
The Intelligence Oversight and Other Legislation Amendment (Integrity Measures) Bill 2020 (the Bill) was introduced to expand specialised intelligence oversight to the Australian Transaction Reports and Analysis Centre (AUSTRAC) and the Australian Criminal Intelligence Commission (ACIC), expand the oversight role of the Parliamentary Joint Committee on Intelligence and Security (PJCIS) to AUSTRAC, confer information sharing powers to enable effective oversight, and clarify and modernise language in the relevant legislation.
3.2
The Bill seeks to progress recommendations of the Comprehensive Review of the Legal Framework of the National Intelligence Community conducted by Mr Dennis Richardson AC (Richardson Review), which found that the core intelligence functions performed by AUSTRAC and the ACIC were suited to specialised intelligence oversight by the Inspector-General of Intelligence and Security (IGIS).
3.3
The Bill also responds to the Richardson Review recommendation that the Inspector-General should not be appointed from the head or deputy head of an agency overseen by the IGIS immediately after their service.
3.4
The Bill puts forward technical amendments to the Inspector-General of Intelligence and Security Act 1986 (IGIS Act) to:
…improve clarity, modernise drafting expressions and remove redundant provisions, as well as amendments to address certain limitations in the IGIS’s oversight functions and powers in order to improve the flexibility and strengthen the integrity of inquiry processes.
3.5
The Explanatory Memorandum (EM) to the Bill said that the proposed amendments would ‘complement and strengthen the existing oversight settings’ for NIC agencies.
3.6
In explaining the Government’s approach, the EM states that ‘it is appropriate to consider whether intelligence oversight settings are appropriate’, and that consideration needed to be given to how additional oversight would ‘complement existing arrangements’ without creating duplication.
3.7
The Bill aligns with the more limited recommendations for expanded oversight contained in the Richardson Review, rather than adopting the IIR’s recommendation to expand PJCIS and IGIS oversight to all agencies within the NIC.
3.8
In further explaining the position, the EM argues that a more tailored approach to oversight would be a better use of ‘finite oversight resources’ which could be focussed on areas of the greatest risk.
Key Provisions of the Bill
3.9
The Bill contains three schedules. Schedules 1 and 2 of the Bill contain the main, consequential and contingent amendments. Application and transitional provisions are contained in Schedule 3.
Schedule 1 –Amendments
3.10
The functions of the IGIS in relation to ASIO, ASIS, AGO, ASD, DIO and ONI are set out under Sections 8, 9 and 9A of the IGIS Act. The IGIS may conduct inquiries into compliance, propriety of activities, redress of grievances, protection of rights of a person, and other matters on referral by the Attorney-General, responsible Minister or by own-motion.
3.11
Schedule 1 seeks to amend the IGIS Act to expand the IGIS’ ability to undertake inquiries to oversee the intelligence functions of two additional agencies. AUSTRAC and the ACIC are part of the NIC, and have a strong role within Australia’s national security infrastructure. The Bill seeks to define ‘intelligence function’ in the IGIS Act, as the statutory functions conferred on the ACIC and AUSTRAC are not delineated according to their intelligence role. The IGIS will be limited to the extent that a matter relates to an intelligence function of the relevant agency. ‘Intelligence function’ is defined in item 60, Schedule 2:
intelligence function means:
a.
for ACIC—the collection, correlation, analysis, production and dissemination of intelligence by ACIC for the purpose of performing its functions under section 7A of the Australian Crime Commission Act 2002 (except in relation to Indigenous violence or child abuse within the meaning of that Act); or
i.
the collection, correlation, analysis, production and dissemination of intelligence by AUSTRAC for the purposes of the AUSTRAC CEO performing the CEO’s financial intelligence functions under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006; or
ii.
a function performed by AUSTRAC, the AUSTRAC CEO or any other official of AUSTRAC referred to in paragraph 209(4)(c) of that Act that is incidental to the CEO’s financial intelligence functions.
3.12
Proposed amendments in Schedule 1 of the Bill would allow for a streamlined and strengthened IGIS inquiry process. Proposed amendments relating to the inquiry process include:
providing IGIS officers with access to information necessary to carry out oversight functions of the two additional agencies;
providing consistency of language regarding ‘permanent resident’, in relation to the provision for an Australian citizen or permanent resident (within the meaning of the ISA) to make a complaint to the IGIS regarding the activities of DIO or ONI, and for the IGIS to be able to instigate an inquiry on that basis; and
protections to those making complaints regarding DIO and ONI under the IGIS Act.
3.13
Item 2, Schedule 1, seeks to amend the IGIS Act to insert new definitions relating to employment within the Australian Public Service, AUSTRAC and ONI. Amendments to other definitions include:
proposed repeal of the definition of ‘permanent resident’, to align the meaning of the term for the purposes of IGIS oversight with the meaning in the particular agency’s legislation;
responsible Minister, to ‘resolve ambiguity where more than one Minister has responsibility for an Act that establishes an agency’;
the addition of a definition of ‘subcontractor’; and
minor amendments to modernise language, for example, substitution of the word ‘shall’ with ‘is to’.
3.14
Item 9, Schedule 1, seeks to limit the appointment of the Inspector-General, and sets out that a person ‘must not be appointed as Inspector-General if the person is, or the person’s most recent position was, the head or a deputy head (however described) of an intelligence agency’. This amendment is in line with a recommendation of the Richardson Review to maintain the independence of the role. The EM clarified that experience within an intelligence agency would not preclude a person from appointment, or create bias in that person. The amendment ‘reflects the importance of ensuring the Inspector-General is, and is seen to be, independent from the agencies they oversee’ in order to maintain public confidence in the office.
3.15
Items 134-149 of Schedule 1 propose amendments to the Intelligence Services Act 2001 (the IS Act) to expand PJCIS oversight to the intelligence functions of AUSTRAC.
3.16
Clarifying amendments are proposed to the position of consultants, secondees from agencies at the Commonwealth, state or territory level, and police forces and contractors.
3.17
Consequential amendments are proposed to a number of relevant Acts, in order to ensure that information that is protected by secrecy offences can be disclosed to IGIS officials performing necessary oversight duties:
Anti-Money Laundering and Counter Terrorism Financing Act 2006;
Australian Crime Commission Act 2002;
Australian Human Rights Commission Act 1986;
Australian Security Intelligence Organisation Act 1979;
Income Tax Assessment Act 1997;
Inspector-General of Taxation Act 2003;
Intelligence Services Act 2001;
Office of National Intelligence Act 2018;
Public Interest Disclosure Act 2013;
Surveillance Devices Act 2004;
Taxation Administration Act 1953;
Telecommunications Act 1997;
Telecommunications (Interception and Access) Act 1979; and
Witness Protection Act 1994.
Schedule 2 – Contingent Amendments
3.18
Schedule 2 of the Bill contains contingent amendments. Due to there being three related bills before Parliament when the Bill was introduced, some important substantive provisions of the Bill are contingent amendments. The three related bills have passed both Houses and have been enacted, and were:
Anti-Money Laundering and Counter-Terrorism Financing and Other Legislation Amendment Bill 2019 (AML/CTF Bill);
Australian Security Intelligence Organisation Amendment Bill 2020 (ASIO Bill); and
the Surveillance Legislation Amendment (Identify and Disrupt) Bill 2020 (SLAID Bill).
3.19
The passage of the Surveillance Legislation Amendment (Identify and Disrupt) Act 2021 (SLAID Act) introduced limited oversight of ACIC and the AFP for the IGIS in relation to network activity warrants.
3.20
The following contingent parts of the Bill will have no effect:
Schedule 2, Part 1, Division 1 – due to the passage of the AML/CTF Bill;
Schedule 2, Part 2, Division 1 – due to the passage of the ASIO Bill; and
Schedule 2, Part 3, Divisions 1-3 – due to the passage of the SLAID Bill.
3.21
The contingent amendments proposed to allow the IGIS to access and deal with AUSTRAC information, and ensure that the IGIS is able to access premises where a person is being questioned under particular types of warrants, and support information sharing and complaints transfer between Commonwealth integrity bodies.
3.22
The IGIS set out the Bill’s interaction with the SLAID Bill:
The Bill’s interaction with the Identify and Disrupt Bill means that the final construct of many of the Bill’s key provisions will be contingent on the passage of both bills, and the initial construct will be contingent on which of the two bills commences first. This has required the Integrity Measures Bill to include multiple versions of certain amendments. However, IGIS understands that, in the event that both Bills pass, the final construct of each of the provisions is intended to be the same regardless of the order of their passage.
3.23
The SLAID Act added new subsection 8(3A) which allowed the IGIS to undertake inquiries into the ACIC and AUSTRAC.
Schedule 3 – Application and Transitional Provisions
3.24
Schedule 3 of the Bill contains application and transitional provisions.
Inquiry Participant Views on the Bill
3.25
Oversight agencies such as IGIS and the Commonwealth Ombudsman did not comment on the policy or content of the Bill, but provided information about their process and involvement in the Bill’s development.
3.26
The IGIS said that the passage of the SLAID Act included ‘many similar provisions to the Integrity Measures Bill’ and gave the example of information sharing provisions.
3.27
The Police Federation of Australia supported the intent of the Bill, and considered that the ‘current oversight functions of the Australian Federal Police and Department of Home Affairs are already sufficient’.
3.28
The Law Council of Australia supported the extension of IGIS oversight to ACIC and AUSTRAC, the extension of PJCIS administration and expenditure oversight to the intelligence functions of AUSTRAC, conferring of a range of information sharing powers and making minor modernising amendments.
Support for Extended Oversight
3.29
Dr Keiran Hardy and Professor George Williams AO stated in a joint submission that they supported the Bill, but said that improvements to ‘intelligence oversight are needed because Australia lacks the same levels of oversight as other members of the Five Eyes network’. Dr Hardy and Professor Williams said that although they support the passage of the Bill, they ‘believe that it does not go far enough’, and noted the recommendations of the IIR to expand oversight to the agencies which make up the NIC.
3.30
Dr Hardy and Professor Williams disagreed with the ‘narrower approach’ of the Bill, and said that:
…once an intelligence-like function is exercised, irrespective of where it lands and which department or agency, it requires a specialised and appropriate form of oversight—the gold standard that the IGIS does provide. We think it's not appropriate to escape that form of scrutiny simply because it's found, even in a small way, in another department.
3.31
Dr Hardy and Professor Williams said that the IGIS has a ‘unique position’ in overseeing intelligence, and has greater powers than a parliamentary committee or other oversight bodies:
More substantially, the IGIS has specialised functions and powers which mean it can provide more rigorous oversight of intelligence activities compared to a parliamentary committee or other statutory offices, such as the Commonwealth Ombudsman. The statutory functions of the IGIS are to investigate the propriety of intelligence activities, whether intelligence activities comply with laws and regulations, and whether intelligence activities are contrary to human rights or constitute discrimination. These functions are more specialised compared to those held by other oversight bodies, and they are supported by stronger powers akin to those held by a Royal Commission.
3.32
The Law Council of Australia suggested that further consideration be given to enacting the recommendation of the IIR to extend IGIS and PJCIS oversight to the intelligence functions of NIC agencies. The Law Council also questioned whether the proposed definition of ‘intelligence function’ in the Bill adequately cover the ‘intelligence life-cycle’ from collection to retention or destruction.
3.33
The Law Council also considered that the legislation governing the PJCIS and other Commonwealth integrity agencies with oversight responsibilities for the NIC requires review, to ensure that it is ‘fit for purpose in contemporary circumstances’ and whether there may need to be modernisation reforms, as seen in the Bill. The Law Council also raised the adequacy of resourcing for the IGIS, NIC integrity agencies and the PJCIS in order to operate effectively and perform their expanded functions.
Views Relating to Potential Duplication of Powers
3.34
Dr Hardy said at the public hearing that any issues relating to overlap of oversight or duplication of oversight powers ‘can be dealt with through complaints, transfers, information-sharing practices and a close working relationship’.
3.35
Dr Hardy and Professor Williams recommended that the Bill expand the remit of the IGIS and PJCIS to include Home Affairs and the AFP. Dr Hardy and Professor Williams said that the Intelligence Division of Home Affairs conducts substantial intelligence functions, and argued that because of these functions, the inclusion of Home Affairs in the NIC, and the oversight role Home Affairs has of other agencies in the NIC, that these functions within Home Affairs should not be excluded from the remit of IGIS.
3.36
The Commonwealth Ombudsman welcomed the enhanced information sharing powers between the Ombudsman and IGIS, and said that although the Bill positions the IGIS ‘in the realm of oversight of certain law-enforcement entities’, there was a ‘reasonably clear delineation’ between the role of the IGIS regarding intelligence functions of those agencies and the oversight performed by the Ombudsman:
We think that, broadly speaking, there is a reasonably clear delineation, but equally we can see that in the course of our respective duties there might be occasions where we come across something that might be of interest to the IGIS and vice versa. We were therefore keen to ensure, in the way the bill was crafted, that there was a capacity for information exchange between the two. We're satisfied that there is, with the capacity to refer complaints to each other and the capacity to refer matters to each other, and we will work with the IGIS in a practical way to make that work.
3.37
Conversely, the Ombudsman could not identify any gaps with respect to oversight of the intelligence functions of the ACIC and AUSTRAC. The Commonwealth Ombudsman, Mr Michael Manthorpe, said that duplication of two integrity agencies looking into the same matter could be resolved between the agencies by working together ‘in a practical way’.
3.38
Mr Manthorpe noted that he gives evidence to several parliamentary committees without issue:
There is the Parliamentary Joint Committee on Law Enforcement, which also has an oversight role with respect to the ACIC. I appear before that committee to talk about issues there. I personally think that's all quite healthy and there ought to be strong oversight of law enforcement and intelligence agencies. But, no, there hasn't been a point at which I've thought, 'This creates some kind of operational problem for me.'
3.39
The IGIS said that, unlike agencies within its current jurisdiction, it will not have a function to inquire into procedures within ACIC or AUSTRAC relating to the redress of employee grievances:
This avoids the potential for arbitrary differences in grievance redress mechanisms available to staff of those agencies, depending on whether they were performing ‘intelligence’ or ‘non-intelligence’ functions. The Bill also excludes inquiries into complaints made by employees of ACIC and AUSTRAC that are directly employment-related matters. This is consistent with the IGIS Act’s existing exclusion of complaints from agency staff who are employed under the Public Service Act 1999.
3.40
A representative of the Attorney-General’s Department referred to the extension of oversight to IGIS but not the PJCIS, and said that it was the Government’s assessment that the ACIC’s intelligence functions would receive oversight from the PJCLE. Further, the ACIC’s intelligence functions ‘aren’t new. They’ve been there for a long time, and they’ve been oversighted by that committee [the PJCLE] for a long time’.
Recognition of Increased Workload
3.41
The added workload incurred through an extension of oversight for the IGIS and PJCIS was noted by inquiry participants. The Bill would extend IGIS’s oversight remit to two further agencies, and extend the PJCIS’s oversight to one.
3.42
The IGIS has received increased funding over a four-year period from the 2017-18 budget to sustain a full time staff of 55 persons. As noted in Chapter 2, 34 persons (and the Inspector-General) are currently employed.
3.43
The Law Council of Australia questioned whether this is an adequate level of funding in light of ‘major expansions to the functions and powers of the intelligence agencies presently subject to IGIS oversight’. The Law Council of Australia recommended that funding for the IGIS be increased as necessary to ensure that there is no drop in the level of oversight.
3.44
Professor Williams AO noted the current workload of the PJCIS, at the public hearing, as reflecting ‘the world in which we live, the geopolitical risk, the activities and risk identified by our agencies’:
I do recognise the workload. You only have to look down the list of inquiries of the PJCIS to see how busy the process is. I think it's a function of the times—that of course this is a particularly busy time. I've given evidence to this committee and its predecessors going back nearly 25 years. It's hard to think of a busier time in the life of this committee. But I think it gives people confidence that that's happening.
3.45
Professor Williams suggested the ‘more and targeted use of INSLM’ as a way to alleviate the workload on the PJCIS.
3.46
The Law Council of Australia also noted the ‘existing, heavy workload’ of the PJCIS, and recommended that the Bill be amended to include ‘modernisation reforms’ relating to the formation, functions and operation of the Committee. Further, the Law Council said that, given the PJCIS’ legislative scrutiny workload, ‘the statutory functions of the Committee in section 29 of the ISA do not accurately reflect its work. The Bill provides an opportunity to address this anomaly’.
3.47
The Law Council said that it was ‘concerned that the Office of the Australian Information Commissioner (OAIC), and in particular the functions of the Privacy Commissioner, were not included in the increased funding for oversight of national security agencies’. The Law Council said that the OAIC’s total ongoing annual budget is forecast to decrease at the expiry of additional funding.
3.48
Three of the 10 agencies in the NIC (AFP, AUSTRAC and Department of Home Affairs) are subject to the requirements of the Privacy Act.