3.1
This chapter provides an overview of some of the issues that the committee discussed with the Australian Criminal Intelligence Commission (ACIC) during the committee's hearing on 12 April 2021.
Responding to the COVID-19 pandemic
3.2
The ACIC responded to the COVID-19 pandemic by providing infrastructure to support staff to work from home, as well as making staff available for redeployment in frontline services in the Department of Home Affairs. The ACIC contributed advanced analytics to help map the spread of the virus, which enhanced the capacity of agencies to manage international arrivals and assist contact tracers.
3.3
The ACIC produced 87 tactical intelligence reports and 33 analytical assessments related to the impact of COVID-19. The subjects of these reports and assessments included the increased threat of counterfeit pharmaceuticals and medical equipment, the domestic illicit drug market, illicit drug consumption during the lockdown, cybercrime such as ransomware threats and SMS phishing campaigns, and assessments of organised fraud targeting government programs.
3.4
When asked about trends in COVID-19 related crime, particularly in relation to vulnerabilities associated with the vaccine rollout, Mr Michael Phelan, Chief Executive Officer of the ACIC, noted that although this type of crime may be happening on the dark web, the ACIC had not seen anything on a significant scale. Additionally, Mr Phelan noted that indications in the early stages of the pandemic that APOT targets were looking to exploit the vulnerabilities within the Australian Government's rollout of the stimulus package, 'never came to fruition.' Mr Phelan explained:
Early on in the piece we used a lot of our previous fraud assessments from various government systems over the years to provide insight to the departments administering the stimulus packages during the pandemic, so that they could close off loopholes before they occurred.
3.5
A key achievement for the ACIC has been leveraging its globally recognised National Wastewater Drug Monitoring Program to fund a wastewater analysis 'proof of concept' project, jointly undertaken by the University of Queensland and the CSIRO, which successfully detected the SARS-CoV-2 virus in wastewater in Australia for the first. This achievement has been widely reported internationally, and represents a significant contribution to the Australian and global effort to combat and contain the spread of the virus.
3.6
The ACIC's stakeholder survey report found that stakeholders were 'very impressed' by the ACIC's pivot to providing COVID-related intelligence, with stakeholders noting that this intelligence was provided in a timely fashion and to a high quality.
Committee comment
3.7
The committee commends the ACIC for the way in which it made appropriate adjustments in its focus in response to the COVID-19 pandemic while still delivering on its core functions. Most notably, the committee was impressed by the ACIC's success in leveraging its well-established and highly-regarded National Wastewater Drug Monitoring Program to help detect the SARS-CoV-2 virus in wastewater. This represents, in the committee's view, a major achievement by the ACIC.
Australian Priority Organisation Target (APOT) List
3.8
The APOT list commenced in November 2016 to provide a framework to enhance international engagement, collaboration, and information sharing. The list is an ACIC-led initiative, and provides an important mechanism for focusing and coordinating law enforcement efforts in relation to 'top tier international and transnational' serious and organised crime targets that pose the greatest threat to Australia's interests.
3.9
According to the ACIC, possible entities for inclusion on the APOT list are assessed against crime types, scale, capability, intent, and opportunity to be meaningfully targeted by law enforcement. In 2019–20, the ACIC refined its approach by making the bar for entry to the APOT higher, thereby helping to ensure that the focus remains on the most significant threats to Australia. Consequently, there has been a reduction in APOT list targets compared to previous years. The ACIC emphasised that the reduction of the number of APOT list targets is very deliberate, with the number now ‘in fact right where it should be'. Mr Matthew Rippon, Executive Director of Intelligence Operations at the ACIC, provided the committee with an overview of the method of determining an APOT target and the next steps:
It's actually a very deliberate strategy to have a small number [of APOT targets] to focus on…. We [ACIC] have the heads of all the Commonwealth law enforcement and intelligence agencies on our board. They all have…. the opportunity to nominate targets that are having the greatest harm to Australia.... What we do, from an ACIC perspective, is map the networks that sit underneath those APOTs. Once we've mapped those networks, we then work with our partners; nothing that we do in the ACIC is done alone. After mapping, we would then work with partners around strategy. We build joint strategy to look at who has the best opportunity to interdict and disrupt each of those APOTs. Finally, one of the most important parts of this is to build a picture of crime and to continue building strategic assessments that are pumped back out to our partners to inform the next steps.
3.10
The ACIC Annual Report 2019–20 (annual report) states that since October 2019, agencies, including the ACIC, have collaborated on 15 Australian Priority Organisation Target (APOT) disruption strategies resulting in the disruption of five APOT networks.
Committee comment
3.11
The committee is in agreement with the ACIC's approach to determining an APOT level target and appreciates the ACIC's transparency in describing the methodology of this approach with the committee. The committee looks forward to surveying the results of this methodology in its examination of future ACIC annual reports.
Drug research and findings
3.12
Committee members were interested in the ACIC's research and findings on illicit drugs, particularly how COVID-19 has impacted drug-related crime in Australia. This section of the report summarises the information presented by the ACIC at the hearing, while also referencing related work by the ACIC in the 2019–20 period.
3.13
The ACIC produced two unclassified report series which focus on the use of Illicit Drugs:
(1)
National Wastewater Drug Monitoring program; and
(2)
The Methylamphetamine supply reduction—measures of effectiveness report.
National Wastewater Drug Monitoring Program
3.14
In the 2019-20 reporting period, the ACIC published the 8th, 9th and 10th report for the National Wastewater Drug Monitoring Program. This program provides insights into the trends and emerging issues of drug consumption across Australia, while also identifying new threats. The 10th report revealed that Australia's level of stimulant consumption is ranked fourth highest in the world, specifically in relation to methylamphetamine, amphetamine, cocaine and MDMA. Notably, Australia is also ranked third highest for consumption of methylamphetamine and consumption of MDMA.
3.15
Methylamphetamine remained the most consumed illicit drug in Australia. Capital cities saw record consumption of MDMA, nicotine and methylamphetamine. Regional centres also saw record levels of MDMA, nicotine, cocaine and alcohol consumption. Regional consumption of heroin, however, decreased to the lowest level recorded by the program.
3.16
In the 2019 Budget, the ACIC received an additional $4.8 million over four years to fund the National Wastewater Drug Monitoring Program, which will ensure the ACIC can provide a consistent measure to guide and monitor drug responses as Australians continue to consume illicit drugs at increasing levels.
3.17
Following the tabling of the annual report, the ACIC released the 11th report for the National Wastewater Drug Monitoring Program that looked at the impact of COVID-19 through the 2019–20 reporting period. This report found that COVID-19 impacted drug markets and consumption within Australia in the following ways:
(1)
Record high consumptions of methylamphetamine and heroin in regional centres and cocaine, cannabis, and nicotine in capital cities.
(2)
Record low drug consumption of fentanyl, oxycodone, and alcohol.
(3)
Price variations are within historical records and have not affected consumption rates.
(4)
Major regional drug markets, such as methylamphetamine, heroin and cannabis, have seen increases in consumption during COVID-19.
(5)
There is no evidence in the wastewater data that the mooted significant decrease in heroin consumption occurred, and hence there was no displacement to the illicit pharmaceutical opioids market.
(6)
Due to domestic sources and national cultivation, the cannabis market was not negatively affected by the inflated prices during COVID-19.
3.18
When asked by the committee at the public hearing how drug-related crime had changed during COVID-19, Mr Phelan explained that in the early stages of the pandemic, the criminal environment was facing the same problems as standard world trade. This was because the supply chains that regulate drug trafficking are similar to those that regulate legitimate trade. However, the demand for narcotics and other synthetic drugs in Australia remained extremely robust. Mr Phelan also noted that Western Australia, as a result of its hard borders, had seen significant effects from constrained supply, which therefore affected consumption because of the inflated prices.
Committee comment
3.19
The committee commends the ACIC on its National Wastewater Drug Monitoring Program. The committee is pleased that the wastewater program has received additional funding. The wastewater program provides critical insights into drug consumption across Australia and has directly assisted operational and policy responses to drug-related crime. The committee looks forward to seeing the results and evolution of future reports from the program.
The Methylamphetamine supply reduction—measures of effectiveness report
3.20
The ACIC has overlaid consumption data derived from the National Wastewater Drug Monitoring Program with other illicit drug indicator data to understand the relationship between supply and consumption within the Australian methylamphetamine market. This report made four key findings:
Large seizures of methylamphetamine have a demonstrated impact on methylamphetamine consumption in Australia, particularly in capital city markets. The impact of seizures on consumption is delayed, short term and geographically specific.
Supply reduction is unlikely to be the only contributing factor to fluctuations in Australia's methylamphetamine markets. Nonetheless, available data demonstrate statistically significant decreases in consumption—both over time and across jurisdictions—following multi-hundred-kilogram seizures.
Domestic production of methylamphetamine in clandestine laboratories is a critical factor that contributes to the resilience of Australia's market. The scale of domestic production is likely larger than previously understood, counters the impact of national and international methylamphetamine seizures and supports regional methylamphetamine consumption.
At a national level, supply reduction is most effective when directed towards disrupting the ‘wholesale' methylamphetamine market, given large individual seizures appear to have a greater impact on consumption than multiple smaller seizures. However, addressing methylamphetamine consumption long-term requires a concurrent and equivalent focus on demand and harm reduction activities, complementing supply-side efforts.
3.21
When asked by the committee whether seizures at the international border were the most effective means to tackle the high consumption of methylamphetamine in Australia, Mr Phelan responded with reference to the data collected in the above report, and explained that drug seizures could have a measurable impact on consumption. However, noting the resilience of illicit drug supply chains, Mr Phelan also told the committee that Australia's approach to tackling the scourge of illicit drugs required a response that addressed both supply and demand drivers.
We did a longitudinal study around ice and the seizure of ice at the border over a three-year period. We were able to show that, over that period of time—and that was overlaid with wastewater analysis—approximately one month to two months after major seizures of over half a tonne there was a significant drop in usage in our country right across the board. It wasn't even restricted to particular jurisdictions. That does show that, if you keep your foot on the throat of the seizures at the border, you can have an impact. The only thing is that the supply chain is quite robust, so other imports come in behind it.
As I've said for a long time, this has to be a whole-of-system approach. You have to still maintain heavy pressure on the supply side of the equation, which law enforcement can do. The AFP and Border Force, for example, do a fantastic job with the seizures at the airport and with the intelligence they gather with their overseas partners, particularly the Australian Federal Police through its network of officers overseas. You have to keep your foot on the throat of supply.
If we want to make a real dent in this country, we have to be able to somehow dampen demand. It's the demand for drugs in this country that's insatiable.
3.22
Mr Phelan also underlined the overwhelmingly transnational nature of serious drug crime in Australia. Explaining the ACIC's focus on targeting offshore serious crime groups, Mr Phelan advised:
Almost 100 per cent of the drugs comes from offshore—all cocaine, all heroin and 80 per cent of meth; and, for the 20 per cent of meth that is domestically produced, almost 100 per cent of the precursors are coming from offshore as well. So it is offshore that is very important to us.
Committee comment
3.23
The committee thanks the ACIC for giving the committee insight into the effectiveness of current measures to reduce the supply of methylamphetamine. The committee hopes that more of these targeted reports will be produced in the future by the ACIC to guide policy decisions in the most effective way.
3.24
Finally, the committee thanks the ACIC for providing a satisfactory annual report, and congratulates the organisation for the important work it does in improving the national ability to respond to crime impacting Australia.