Introduction
2.1
As noted in Chapter 1, the bills are a key outcome of the 2017 Independent Intelligence Review (the Review). This chapter provides background and context to the Review, and summarises the recommendations from the Review relevant to ONI.
Background to the Review
2.2
In 2003, the predecessor to this Committee, the Parliamentary Joint Committee on ASIO, ASIS and DSD, undertook an inquiry into Intelligence on Iraq’s weapons of mass destruction. A recommendation arising from the Committee’s review was that there
should be an independent assessment of the performance of the intelligence agencies, conducted by an experienced former intelligence expert with full access to all the material, which will report to the National Security Committee of Cabinet and which … will recommend any changes that need to take place for the better functioning of the agencies.
2.3
The first such independent assessment took place the following year, culminating in the July 2004 Report of the Inquiry into Australian Intelligence Agencies. One of the recommendations from the inquiry was that
the intelligence community should be subject to periodic external review every five to seven years.
2.4
The inquiry also recommended that ONA’s budget and staffing be almost doubled, as ONA was ‘ill-equipped in resource terms to undertake effective community coordination, set out in its legislation’.
2.5
The inquiry further recommended that ONA’s role as ‘Australia’s peak’ foreign intelligence assessment agency be clearly articulated in legislation, and that ONA’s role with respect to coordination of the foreign intelligence community be strengthened. This resulted in changes to ONA's legislation to strengthen its coordination and evaluation responsibilities.
2.6
The second independent review reported in 2011. No recommendations were made that specifically related to ONA.
2.7
The third inquiry, the 2017 Independent Intelligence Review reported on 18 July 2017. The Review made 23 recommendations, and of those, 12 were directly relevant to, or made reference to, ONA’s proposed replacement, ONI.
2.8
In Chapter 4 of the Review, the reviewers stated they ‘became convinced’ during the course of their inquiries that
some of the challenges facing the intelligence agencies would be most effectively addressed if changes are made to its structure. These changes are needed to facilitate a genuinely national enterprise that is agile, innovative and effective in responding to the challenges of twenty-first century intelligence.
2.9
The Reviewers went on to note that changes were recommended to
promote synergies within the broader intelligence community, clearer direction-setting and prioritisation, more effective resource allocation, more productive evaluation and benchmarking, and more instances of shared capability development and joint procurement.
2.10
The Review identified that Australia was alone among ‘its Five Eyes partners in not having a single point of co‑ordination for its intelligence community’, and concluded that
for individual agencies and the intelligence community generally to be truly world-class the whole must be greater than the sum of the parts …
What is required into the future is an enterprise-based management of the NIC that provides leadership and a focus on integration across the full spectrum of intelligence activities.
2.11
As such, the Review’s first recommendation was to establish ONI.
The Review’s recommendations relevant to ONI
2.12
As noted above, the Review contained 12 recommendations that are relevant to ONI. These recommendations are summarised below. These recommendations are included verbatim at Appendix C.
Review recommendation 1
2.13
Recommendation one was that ONI be established as a statutory authority within the Prime Minister’s portfolio. The Review recommended ONI should be led by a Secretary-level Director-General of National Intelligence (DGNI) who would be the head of the National Intelligence Community (NIC) and the Prime Minister’s principal adviser on intelligence community issues.
2.14
The recommendation outlined DGNI’s role, which include directing the co-ordination of the NIC to ensure appropriately integrated strategies across the ‘suite of NIC capabilities’.
Review recommendation 2
2.15
The second recommendation addressed the need for ‘enterprise-based management of the NIC’ by suggesting that ONI’s two main areas of responsibility should be
Intelligence Enterprise Management: coordination, national intelligence priority setting, integration of key intelligence missions as well as NIC evaluation mechanisms, and
Assessments: producing national and strategic foreign assessments.
2.16
The recommendation also proposed a number of responsibilities for DGNI, including:
advising government on intelligence collection and assessment priorities,
allocating responsibility for intelligence collection across the intelligence agencies,
reporting to the Prime Minister and the National Security Committee of Cabinet to provide a holistic view of performance against priorities,
recommending ways of closing intelligence gaps, making choices among relative priorities, and—in consultation with the heads of relevant intelligence and policy agencies—ensuring the appropriate mix of coverage,
managing arrangements for agency evaluations that make practical assessments of progress in relation to prioritisation, effectiveness, resource allocation, capability development and coordination, and
providing the Prime Minister with a written personal overview every two weeks on key issues for the intelligence agencies, with this overview to be supplemented by meetings with the Prime Minister every two weeks.
Review recommendation 3
2.17
The third recommendation covered improvement of integration in areas of ‘high intelligence focus’. It included a recommendation that ONI ‘facilitate closer co-ordination, evaluation and integration across national counter-terrorism intelligence activities as a whole’.
Review recommendation 4
2.18
The fourth recommendation addressed data sharing and inter-agency connectivity. The Review noted that the
NIC would … benefit from greater co-ordination and integration of its data holdings and data tools, including a co-ordinated approach to the exploitation of open source data.
2.19
It recommended ONI assume responsibility for leading and co-ordinating data management and information communication technology connectivity initiatives across the NIC. The recommendation also included that the Open Source Centre (OSC) be integrated into ONI’s Intelligence Enterprise Management role and enhanced as a centre of expertise for open source collection, analysis, tradecraft and training.
Review recommendation 5
2.20
Recommendation five looked at ONI’s assessment role. In addition to recommending a 50 percent increase in analysts (based on current ONA numbers), the Review also recommended that ONI prepare a daily intelligence brief for the Prime Minister; establish a board consisting of government, business, non-government organisations, universities and think-tanks to add relevant perspectives to intelligence assessment matters; and, develop a more intensive and substantive program of interaction with experts outside of government to inform assessments.
Review recommendation 7
2.21
The seventh recommendation was the establishment of a ‘Joint Capability Fund’. According to the Review
Experience in the United States and the United Kingdom has shown that financial incentives for agencies to develop joint capabilities are not only highly effective but can also forge closer working relationships among agencies leading to more integrated approaches to national intelligence priorities.
2.22
The fund—administered by the ONI—would be used to support shared, developing capabilities that ‘address the needs of more than one agency, and ideally all ten intelligence agencies that support national security’.
Review recommendation 8
2.23
The eighth recommendation acknowledged that ONA is currently exempt from the efficiency dividend, but that ‘ONI would be a larger organisation than the current ONA, and … would not warrant exemption from the efficiency dividend on the basis of size’. As such, the Review recommended that the efficiency dividend be applied to 100 percent of ONI’s funding with effect two years after ONI’s establishment as a statutory authority.
Review recommendation 9
2.24
Recommendation nine would see an ‘Intelligence Capability Investment Plan’ established to identify the major projects that agencies seek agreement to commence. DGNI would be responsible for preparing the plan annually for consideration by the National Security Committee of Cabinet.
Review recommendation 11
2.25
In response to the issues of recruitment, retention and diversity of skilled staff identified in the Review, the Review recommended that ONI be responsible for developing and overseeing the implementation of a strategic approach to the development of the NIC workforce.
Review recommendation 14
2.26
Recommendation 14 addressed some of the issues around emerging technology and innovation. The Review suggested ONI lead a more structured approach to the NIC’s responses to technological change. High priority would be given to establishing a science and technology advisory board, an innovation fund, and an innovation hub.
Review recommendation 21
2.27
Recommendation 21 was that Inspector General of Intelligence and Security and this Committee oversight be expanded to apply to all ten agencies within the NIC, with oversight of the Australian Federal Police, the Australian Criminal Intelligence Commission, and the then Department of Immigration and Border Protection (now part of the Department of Home Affairs) limited to their intelligence functions. Further, the current oversight arrangements in relation to ONA should be applied to ONI.
Review recommendation 23
2.28
The Review’s final recommendation related to the expanded role of the Committee. In relation to ONI, it was recommended that the Committee should be regularly briefed by DGNI.
Committee comment
2.29
The Committee notes that many of the recommendations summarised above do not require a legislative mandate to implement; rather, they will be introduced through policy and regulations. Agencies updated the Committee on the progress of some of these measures during the public hearing.
2.30
For the purposes of this review, the next chapter is directed to those recommendations that are specifically relevant to the bills before the Parliament:
Recommendation 1: Establishment of ONI and DGNI,
Recommendation 2: ONI and DGNI responsibilities,
Recommendation 4: ONI’s open source role,
Recommendation 5: ONI’s establishment of boards and its ability to engage more broadly with non-NIC stakeholders,
Recommendation 11: ONI’s leadership of NIC workforce development, and
Recommendation 14: ONI’s leadership of NIC approach to technological change.
2.31
The next chapter will also cover issues arising from the bills that are not recommendations from the Review, but have been included to ensure continuity between ONA and ONI and to assist ONI to carry out its functions.