Chapter 5 Audit Report No.50 2011–12 Processing and Risk Assessing Incoming
International Air Passengers
The Australian Customs and Border Protection Service (Customs and Border
Protection) is responsible for the protection of the safety, security and
commercial interests of Australians through border protection designed to
support legitimate trade and travel, and to ensure collection of border-related
revenue and trade statistics.
At the border, Customs and Border Protection makes primary interventions
at the Entry Control Point (ECP) to ‘verify identity, respond to risk
assessments and activate secondary assessments of persons of interest’.
Officers identify persons of interest through real time risk assessments and
through the deployment of detector dogs. Secondary interventions include
questioning, baggage examination and searching of persons of interest, and
related follow-on activities.
Customs and Border Protection is operating in ‘an environment of growth
in both passengers and goods’. Incoming passenger movements increased from
around 11.3 million in 2006–07 to around 13.9 million in 2010–11, with numbers
expected to continue to increase significantly over the coming years.
The SmartGate automated border clearance system was progressively
deployed at Australia’s international airports between 2007 and 2011, and is an
important strategy to assist with the efficient processing of increasing
numbers of passengers. SmartGate kiosks enable eligible passengers and crew to
through passport control, using the electronic information in the ePassport and
facial recognition technology to perform the Customs and Border Protection and
Department of Immigration and Citizenship (DIAC) checks normally undertaken by
a Customs and Border Protection officer at the manual ECP.
At the time of the audit, eligibility for SmartGate was restricted to
Australian and New Zealand passport holders over 16 years of age, who made up
8.4 million, or 57.1 per cent, of incoming passengers and crew in 2010–11. The
extension of SmartGate eligibility to other nationalities was part of the
original planning for its implementation.
The processing of incoming international air passengers was the subject
of a previous ANAO audit report—No.10 2009–10—tabled in November 2009.
That audit focused on the manual processing of passengers at the ECP, and made
four recommendations to Customs and Border Protection to: improve assurance
measuring and reporting of functions performed by officers; review and update a
disaster recovery plan; improve information technology incident response
processes; and update, monitor and report against the Key Performance
Indicators in the Memorandum of Understanding with DIAC.
The JCPAA conducted an inquiry into this previous ANAO Report (No.10) in
2010. Although the Committee
did not make any recommendations, in its report it urged Customs and Border
Protection to implement the ANAO’s recommendation on information technology,
and indicated that the JCPAA would continue to monitor the processing of
incoming international passengers.
The ANAO audit
Audit objective and scope
The objective of the audit was to assess the effectiveness of Customs
and Border Protection’s risk based
management of end-to-end processing of
incoming international air passengers in achieving border security and
passenger facilitation outcomes.
As the Australian National Audit Office (ANAO)’s previous audit report,
No. 10 2009–10 Processing of Incoming International Air Passengers,
assessed Customs and Border Protection’s manual processing of incoming
international air passengers at the primary line, the scope of this audit was
aligned to areas not previously covered: automated passenger processing through
risk assessment; and secondary intervention outcomes.
The audit addressed whether:
- Customs and Border
risk assessment effectively facilitates low-risk
passenger movements and supports appropriate interventions for high-risk passenger
- the SmartGate
automated primary clearance facility is achieving its objectives of enabling
Customs to process more travellers securely and simply; enhancing border
security; and improving identity verification; and
- Customs and Border
Protection effectively manages secondary examination interventions for
passengers, including referrals to other agencies, on a risk basis.
Overall audit conclusion
The audit report noted that Customs and Border Protection was operating
in a ‘growing and increasingly complex passenger environment’ with increasing
resource constraints, meaning that a risk based approach to identifying
potential persons of interest was essential.
The ANAO concluded that, overall, Customs and Border Protection was
effectively managing the clearance of incoming international air passengers.
However, it found structural weaknesses, gaps and overlaps in the risk based
approach to passenger clearance, reducing assurance that high-risk passengers
were being consistently identified, and low-risk passengers were not subject to
unnecessary intervention. In particular, the ANAO found that pre-arrival risk
assessment and the development and review of profiles were not guided by a risk
The ANAO also found that while SmartGate worked well and passenger usage
was increasing, its potential contribution to passenger processing efficiency
had ‘not been realised and could be improved’. Passenger clearances through
SmartGate and the resultant efficiency savings, while increasing annually, were
‘well below the forecasts advised to government in 2009’. The audit found that
as management of SmartGate had been the responsibility of individual airports,
there had been ‘variable results’ in encouraging and achieving passenger usage.
The ANAO suggested that a national strategy for SmartGate would assist Customs
and Border Protection to improve SmartGate performance.
The ANAO made three recommendations aimed at improving Customs and
Border Protection’s management of incoming international air passenger
processing and risk assessment.
Table 5.1 ANAO recommendations, Audit Report No.50
To guide and invigorate a
coordinated national approach to improving SmartGate’s presentation and
clearance rates, the ANAO recommends that Customs and Border Protection:
develop a strategic plan for SmartGate, containing clear
objectives, priorities, strategies and performance targets; and
identify, and promulgate nationally as appropriate, better
practices for SmartGate.
Customs and Border
Protection Response: Agreed.
To better identify and reduce the impact of system process
errors on SmartGate clearances and referrals, the ANAO recommends that
Customs and Border Protection enhance its monitoring and diagnostic tools for
identifying exceptions and anomalies in SmartGate data.
Customs and Border Protection Response: Agreed
To improve assurance that passenger risk assessment is
achieving effective border security outcomes, the ANAO recommends that
Customs and Border Protection gives priority, in implementing the Passenger
Targeting Model, to:
developing stronger systems for performance reporting and
measurement of the effectiveness of its pre-arrival
risk assessment activities;
better prioritising the allocation of passenger risk assessment
and intervention resources through a risk priority model; and
reviewing the internal governance arrangements to provide for
appropriate coverage of national and local interests.
Customs and Border Protection Response: Agreed
The Committee’s review
The Committee conducted its review of the audit report through written
The Committee sent Customs and Border Protection two questions in
writing, focusing on the audit’s findings in relation to the under-utilisation
of SmartGate. The response provided the Committee with evidence on the
- SmartGate usage at Australian airports
- Measures to increase SmartGate usage.
SmartGate usage at Australian airports
The ANAO reported that 2.16 million passengers had presented at
SmartGate kiosks in 2010–11, representing 42.24 per cent of eligible
passengers. Accounting for
passengers who may have attempted to use SmartGate but were not automatically
cleared—producing a more important figure when assessing the success of the
initiative in achieving efficiencies—the ANAO found that 1.81 million
passengers had successfully used SmartGate. This number was well below
the 4.16 million passengers forecast in estimates provided to government in
2009. Consequently, ‘biometric efficiency dividend’ savings were ‘well behind
the forecast returns’.
In percentage terms, the ANAO found that the SmartGate clearance rate
was just 37 per cent of eligible passengers in 2010–11. The clearance rate had
shown encouraging signs of improvement in 2011–12, increasing to 46 per
cent by March 2012, however, this was still ‘well behind’ the forecasts.
The Committee requested updated figures from Customs and Border
Protection on the number of passengers using SmartGate at Australian airports.
In its response, Customs and Border Protection reported that 3.09
million eligible travellers had used SmartGate in 2011–12. The figure for the
month of August 2012 was 339 594, representing 61.9 per cent of eligible
In regards to passenger clearance rates, the Committee was informed that
in August 2012, 51.4 per cent of eligible passengers had successfully cleared
Measures to increase SmartGate usage
The audit report indicated that a key assumption underlying SmartGate
forecasts was that the facility would be extended to holders of ePassports from
other countries—something that still had not occurred at the time of the audit.
The ANAO suggested that given this constraint, Customs and Border
Protection would need to maximise SmartGate usage by the eligible passenger
population of Australian and New Zealand ePassport holders over 16 years of age
if more efficient processing was to be achieved. The ANAO concluded that
SmartGate had lacked ‘national direction’ in the form of national clearance
rate targets or a plan for achieving SmartGate’s objectives. As noted above, it
recommended that a Smartgate strategic plan be established and promulgated
In this context, the Committee asked for an update on Customs and Border
Protection’s efforts to improve SmartGate presentation and clearance rates.
Customs and Border Protection informed the Committee that it had
received $7.9 million in the 2012–13 budget to increase the capacity of
SmartGate. This funding was being used to install five new gates in Melbourne
Airport by December 2012 and eight new gates in Sydney Airport by June 2013.
Customs and Border Protection indicated that increased SmartGate uptake
would be achieved by the use of ‘additional dynamic signage, way finding and
marshalling’ and estimated that at least 65 per cent of eligible travellers
would be using SmartGate by June 2013, and 80 per cent by June 2014.
The Committee was informed that plans were ‘well advanced to extend the
use of SmartGate to other nationalities’, with a pilot for United States Global
Traveller members planned to commence late in 2012.
Customs and Border Protection also advised that, depending on the outcome of
this pilot, eligibility may be extended to eligible United States and United
Kingdom ePassport holders in 2013.
The Committee recognises the importance of Customs and Border Protection’s
role in minimising risks to Australian security, and welcomes the publication
of the ANAO’s report. The Committees fully supports the audit’s findings and
The Committee was disappointed to learn that the anticipated efficiency
gains of the SmartGate automated passenger clearance facility had not all been
realised due to lower than expected usage and clearance rates. It appears that
at least some of the large cost-saving potential of the facility has been
missed due to investments in technology not being followed up with the
strategic direction needed to encourage its use.
Nevertheless, it is recognised that Customs and Border Protection is now
taking measures to increase SmartGate usage in Australian airports, such as by
improving signage and marshalling. The Committee is encouraged that SmartGate
usage appears to have continued to increase in the period since audit was
The Committee welcomes the allocation of additional funding in the 2012‑13
budget to increase SmartGate capacity at the nation’s busiest airports. This
appears to be a logical investment of public money, given the increased
potential for efficiency returns in the longer term if clearance rates can be
The Committee also supports efforts by Customs and Border Protection to
extend eligibility to use SmartGate to passengers of other nationalities, where
this can be done cost effectively and whilst maintaining appropriate levels of
security. It is clear that this will be necessary to maximise the use of SmartGate
and hence to achieve the potential efficiency gains originally anticipated.
The Committee was, however, surprised that there was no mention of a
strategic plan for improving SmartGate presentation and clearance rates in
Customs and Border Protection’s response to its questions. The development of
such a plan was a key recommendation of the ANAO. The Committee notes that at
the time of the audit report, a strategic plan was reported to be ‘under
development’, and that SmartGate presentation and clearance targets had been
included in the 2012–13 Portfolio Budget Statements.
The Committee is interested in learning more about the continuing
development and implementation of the strategic plan, and therefore recommends:
That, within six months of the tabling of this report, the
Australian Customs and Border Protection Service provide the Committee with
an update on its progress in developing and implementing a strategic plan for
SmartGate. The response should include:
overview of measures introduced as part of the plan to improve SmartGate
latest figures on the number and percentage of eligible passengers clearing
through SmartGate; and
the year to date figures compare with the presentation and clearance targets
identified in the 2012–13 Portfolio Budget Statements.