|
|||
|
|||
|
 |
|
|
|
2003-04 |
2004-05 |
2005-06 |
|
Proceeds restrained |
$16 million |
$13.4 million |
$20.7 million |
|
Proceeds forfeited |
$2.4 million |
$0.9 million |
$1.6 million |
6.48 Table 6.1 highlights the considerable difference between the proceeds restrained and the proceeds confiscated. In evidence, Dr Dianne Heriot, Acting First Assistant Secretary, Security and Critical Infrastructure, Attorney-General's Department, explained that to some extent this reflects a 'lead time', with some proceeds of crime matters still being dealt with under the 1987 Act.[38]
6.49 In 2006, Mr Tom Sherman AO presented to the then Minister for Justice and Customs a report, being the review required under section 327(2) of the Proceeds of Crime Act 2002. In the course of the review, Mr Sherman found difficulties in obtaining comprehensive statistical information about the results achieved under the Act. In part, this was attributable to the fact that no one agency possessed all the information necessary to compile a complete picture of the Act's results.[39] Other difficulties included inconsistency in valuations of property across agencies and the reduced value of encumbered properties.
6.50 The agencies involved in the review expressed various positive views about the proceeds of crime regime, although some were qualified. The ACC, for example, told the review that criminals are well aware that it is to their advantage to hold assets in jurisdictions other than those where they conduct their business, and in entities that cannot be traced to them. While the new provisions support the earlier recovery of assets in a wider range of circumstances, the main challenge—which has not been affected by the 2002 legislation—is to identify proceeds before they have been laundered.[40]
6.51 Dr Heriot told the committee that the Sherman report showed, in comparison to the 1987 Act, a 45 per cent increase in average annual recoveries under the 2002 Act. She continued:
Because the act has not been in place very long, some proceedings are still happening under the 1987 act. With the nature of court proceedings, it will take a while to gain legs.[41]
6.52 Mr Sherman's report notes that there are indications that the Proceeds of Crime Act 2002 is having more effect than its predecessor.[42] However, the limitations of the legislation are acknowledged:
The Act has enabled law enforcement authorities to trace proceeds of crime more effectively. But the Act is no panacea in this regard...[T]here are still challenges in tracing proceeds that the Act does not solve. But it is also true that a complete solution to these challenges may be beyond the scope of reasonable legislation in any event.[43]
6.53 Dr Heriot noted that the Sherman report had made recommendations on improving the scheme and that these are currently being considered.[44]
6.54 The committee considers that the confiscation of proceeds of crime is clearly a critical strategy against organised crime, and one with considerable deterrent value. In this, the committee concurs with the observation of Mr Sherman that, while underlings can be paid to take risks:
...[c]onfiscating...illicit profits is often the most effective form of punishment and deterrence for...[the] leaders.[45]
6.55 In the light of the evidence received, the committee believes that the rate of recovery of criminal proceeds under the Proceeds of Crime Act 2002 should be accelerated.
Recommendation 5
6.56 The committee recommends that the recommendations of the Sherman report into the Proceeds of Crime Act 2002, where appropriate, be implemented without delay.
6.57 Proscription of OMCGs and similar criminal groups—whereby a group, membership of the group or associating with its members is banned outright—is often suggested as a means of addressing the problem of organised crime groups in Australia. This approach has been used with success in some overseas jurisdictions. The committee notes that calls for such an approach often quickly follow and increase in the light of highly publicised organised crime related incidents, which tend to stimulate media and public interest.
6.58 Despite there being some satisfaction about the current legislative environment, concerns were expressed that authorities are 'not terribly well-equipped to deal with serious organised crime'.[46] As a result, some witnesses suggested that legislation based on the Racketeer Influenced and Corrupt Organizations legislation (RICO) in the United States of America might prove useful in dealing with organised crime in Australia.[47]
6.59 The purpose of RICO is:
...to seek the eradication of organised crime in the United States by strengthening the legal tools in the evidence gathering process, by establishing new penal prohibitions and by providing enhanced sanctions and new remedies to deal with the unlawful activities of those engaged in organised crime.[48]
6.60 The United States law prohibits any person, including any individual or entity capable of holding a legal or beneficial interest in property, from:
6.61 While RICO laws were initially clearly targeted at the Mafia, they also allow civil claims to be brought by any person injured in their business or property by reason of a RICO violation. By the late 1980s, RICO laws were being routinely used to press civil claims, such as common law fraud, product defect, and breach of contract, as criminal wrongdoing, which in turn enabled the filing of a civil RICO action.[50] A US website on RICO states:
During the 1990's, the federal courts, guided by the United States Supreme Court, engaged in a concerted effort to limit the scope of RICO in the civil context. As a result of this effort, civil litigants must jump many hurdles and avoid many pitfalls before they can expect the financial windfall available under RICO, and RICO has become one of the most complicated and unpredictable areas of the law.[51]
6.62 Concerns about the evidential and procedural requirements of RICO style laws were canvassed in the course of the inquiry. The South Australia Police has advised its government that getting convictions under RICO legislation can be complex, protracted and resource intensive. Overseas experience has shown that it can take three or four years to secure a conviction and that such timeframes do not disrupt organised crime groups.[52]
6.63 The committee notes that, despite awareness about the potential shortcomings of RICO style laws and anti organised crime laws, police are generally positive about the need to consider introducing anti racketeering style laws as part of developing either staged or comprehensive regimes.[53]
6.64 The committee received a number of submissions calling for consorting laws to be enacted or, where they exist, to be reinvigorated against organised crime groups. Consorting laws criminalise the act of keeping company with a known or listed person. The committee was told that these laws were used successfully against the drug trade in Australia in the fifties.[54] There was agreement that consorting laws would need to be updated to reflect modern realities and circumstances if they were to be effective. Mr Bottom observed that such laws have worked in the past and could do so again, as long as their design is based upon sufficient research.[55]
6.65 However, the committee was cautioned against transplanting legal strategies or laws from past eras or different countries without reference to the particular needs or characteristics of Australian conditions. Assistant Commissioner Graeme Morgan, Commander, State Crime Command, NSW Police Force, noted that a number of factors had contributed to the success of consorting laws in the past, such as the creation of a designated consorting squad, the relatively small number of targets and the likelihood of imprisonment for those convicted.[56]
6.66 Presently, for example, the NSW consorting laws require a person to be booked 'seven times in six months' to prove an 'habitual association' or consorting offence.[57] This might require a dozen police to attend court to prove the offence, which would be a tremendous drain on resources. Also, under today's sentencing practices, there would be no guarantee of a jail term and thus of preventing an offender from continuing to communicate and consort with his or her associates. Assistant Commissioner Morgan's assessment revealed a gulf between the superficial appeal of such laws and their present suitability for addressing organised crime:
The two things that could assist in useful consorting legislation would be, firstly, reducing the burden on police in the court process, however that is achieved and, secondly, making the outcome meaningful, however that is achieved.[58]
6.67 Similarly, Deputy Commissioner Andrew Scipione,[59] NSW Police Force, pointed to the fact that to reflect current habits and technology adequately a modern consorting law would need to be able to take account of, and capture, electronic consorting:
Look seriously at the way people consort these days...[C]hildren consort primarily through a mobile phone, an SMS or an internet machine. If we are going to get serious about dealing with meetings, most of them happen in cyberspace.[60]
6.68 Assistant Commissioner Tony Harrison, Crime Service, South Australia Police, advised the committee that consorting laws are attractive because of their focus on interrupting criminal associations, which in turn breaks down the infrastructure promoting illegal activities. Mindful of the potential problems of poorly designed RICO or consorting style laws, South Australia is updating its consorting laws to take into account the distinct characteristics of modern crime groups and the context in which they operate.[61]
6.69 Assistant Commissioner Harrison identified a number of imperatives for these streamlined laws. These are:
6.70 The introduction of relatively easy-to-administer laws would allow police to attack both the extended associations and the core membership of organised crime groups—an ability that has traditionally eluded police. Assistant Commissioner Harrison explained that non-association control orders would target the centre of the organised crime networks—'the inner sanctum...which is the difficult area for law enforcement to infiltrate'. The new consorting regime would be used to attack:
...the hangers-on, the street gangs, the prospects and the nominees of outlaw motorcycle gangs, to preclude them from being able to associate continually with full members of outlaw motorcycle gangs or higher ranking people within serious organised crime groups'.[63]
6.71 The South Australian laws will also address modern systems and habits of communication, including mobile telephones, the internet, voice over internet and person-to-person communication. The South Australia Police advised:
...we will try to capture all those associations to make sure that it is contemporary with the way people communicate today.'[64]
6.72 The committee notes that internationally there is a range of anti-racketeering and consorting style laws.
6.73 The committee was made aware that Hong Kong has introduced laws that outlaw membership in a triad criminal group, as well as the claiming of membership in such a group and the wearing of related group paraphernalia. Critical to the legislative design is the prohibition on claiming to be a member of such a group; this aspect of the legislation seeks to undermine the 'reputational violence' that triad groups rely on to promote and achieve their ends.[65]
6.74 The importance of reputational violence to the triads in Hong Kong is comparable to certain crime groups in Australia:
These gangs, both in the Chinese context and also here, operate entirely on the intimidation of that reputational violence. That brand name—as we academics sometimes like to call it—the brand recognition of wearing a Hell’s Angels jacket, a Coffin Cheaters jacket or whatever, has the same equivalent intimidatory effect as does the wearing of a triad tattoo and so on.[66]
6.75 Reputational violence allows organised crime groups to easily 'slip from protection to extortion, to infiltration of legal businesses'.[67] Gang or group membership goes to the heart of reputational violence and is therefore a potentially legitimate area for law and policy makers to address when designing responses to organised crime.[68]
6.76 In 1997, Canada amended its criminal code to include a number of consorting offences, designed to deprive criminals of their profits. The legislation also creates an offence of participation in a criminal organisation through the commission or furtherance of certain indictable offences for the benefit of that organisation.[69]
6.77 The Scandinavian countries, as well as Italy, France and Germany, have all enacted similar legislation. For example, section 129 of the German penal code, which is concerned with the formation of criminal associations, states:
Whoever forms an association the objectives or activities of which are directed toward the commission of criminal acts or whoever participates in such an association as a member, solicits for it or supports it, will be punished by imprisonment not exceeding 5 years or by a fine.[70]
6.78 Dr Arthur Veno, who has written on the activities and internal dynamics of OMCGs, does not consider that such legislation would work in Australia:
[Such laws would] [a]bsolutely not [work in Australia]...Canada, the RICO Act in America...[and] the Scandinavian countries have all tried similar kinds of legislation. It has not worked one iota. It simply draws the clubs underground, in a lot of cases weeds out the more moderate elements of the club, and the clubs do then become even more violent.[71]
6.79 The committee is concerned that such laws could create an incentive for secrecy, which could arguably make such groups more ruthless and ultimately harder to detect.
6.80 The committee notes that consorting laws by themselves have not achieved great successes; however, they could be used as a component of a coordinated strategy.
6.81 Using Canada as an example, Detective Superintendent Stephan Gollschewski, Queensland Police Service, observed that the success of proscription laws in Canada is in fact testament to a comprehensive approach to combating organised crime groups:
With outlaw motorcycle gangs...[the Canadians] have shown a reduction in crime associated with those particular types of groups, but they have a very holistic approach...They do not just look at the organised crime aspect; they look at the whole of the activities of the group and target even simple things like their traffic offending and that type of stuff, to put pressure on them.[72]
6.82 Professor Broadhurst noted that the success of RICO type legislation in New York is:
...because of the twinning of political will and dedicated law enforcement with RICO type statutes, and particularly those focusing on the money; where it comes from and how you got it.[73]
6.83 However, Detective Superintendent Gollschewski warned against succumbing to the appeal of proscribing antisocial and criminal groups without considering broadly the context in which they operate. Despite the criminal overtones and affiliations of such groups, a gang cannot, in many cases, be regarded as wholly or exclusively criminal.[74] A strategy based solely on outlawing a group and membership of that group could therefore risk leaving untouched those same criminal networks. As a result, a focus on membership of a certain group could be a distraction from the more important task of identifying particular participants in, and incidences of, criminal behaviour:
Law enforcement has to be very careful to identify...criminal networks...that pose the significant threat to the community. If we focus just on the outlaw motorcycle gangs, we are not getting the complete picture. So our targeting methodology and the way we are attacking them is to focus on the high-threat things to the community.[75]
6.84 The difficulty of accurately identifying an organised crime group or network is compounded by the ability of organised crime groups to frustrate proscription by re-forming a previously proscribed group.[76]
6.85 Similarly, Mr Bottom, although having no objection to the proscription of groups per se, felt that criminals would frustrate the working of such laws almost as a matter of course, observing, 'you could wipe them out and they would re-emerge at another point'.[77]
6.86 The committee acknowledges the innovative legislative developments occurring at the state and Commonwealth levels for the disruption and dismantling of organised crime groups. The committee believes that Australia, in considering its own RICO or consorting legislation, has the benefit of international models and their varying degrees of success. During the course of the inquiry, the committee had anticipated that the Attorney-General's Department would be able to provide information on the current international landscape. However, the committee did not receive this information and was therefore unable to draw any conclusions in this area.
Recommendation 6
6.87 The committee suggests that the Parliamentary Joint Committee on the Australian Crime Commission in the next term of the Federal Parliament conduct an inquiry into all aspects of international legislative and administrative strategies to disrupt and dismantle serious and organised crime.
6.88 The committee received little evidence on the relationship of the Corporations Act 2001 to organised crime. However, Assistant Commissioner Harrison pointed out an apparent anomaly whereby dishonesty offences can prohibit a person from being a company director under the Corporations Act 2001, yet a serious drug offence does not necessarily incur such a prohibition:
...where serious organised crime identities may have serious drug and/or violence convictions, that does not necessarily preclude them—and it certainly does not preclude an immediate family member—from being a company director. It is certainly one of the areas...we strongly believe...needs...some tightening up in relation to a fit and proper person being a director of companies, particularly in the area...[of] telecommunications.[78]
6.89 In the absence of more evidence, the committee considers that this is a matter which should be further explored.
Recommendation 7
6.90 The committee recommends that any future review of the Corporations Act 2001 identify provisions which could be amended to inhibit the activities of organised crime, including, but not limited to, those provisions dealing with directors.
6.91 While a substantial part of the hearings focused on the benefits or otherwise of laws aimed at particular groups, such as OMCGs or those committed to politically motivated acts of violence, Deputy Commissioner Lawler emphasised that the proper and most worthwhile focus is on designing comprehensive suites of laws that allow all types of criminal behaviour to be addressed as they arise, with minimum need to amend existing laws or create new statutes:
...outlaw motorcycle gangs...commit criminal offences and breaches in Australia of Australian law. So the full array of tools available, in a generic sense, to law enforcement are very important to treat those particular problems...[T]he tools available for the investigation of any crime can be equally applied to organised crime, to the outlaw motorcycle groups, to groups that might target our tax system or our financial systems and to those involved in amphetamines or terrorism.[79]
6.92 In canvassing potential legislative measures to address organised crime, the committee understands that, beyond the question of design, the perennial issue of national uniformity must be addressed. Noting the lack of uniform laws directed at organised crime groups—and specifically laws dealing with membership of organised crime groups or serious criminal networks—Professor Broadhurst suggested:
...law enforcement agencies in Australia are, to a certain degree—the extent of which we could argue about—operating with legal restrictions which make it much more difficult to control these kinds of groups.[80]
6.93 The committee heard that, although there is limited evidence of jurisdiction-shopping by organised crime groups, such groups undoubtedly operate rationally in the pursuit of profit and in order to minimise their risks. Thus it is almost certain that they select their activities, and the jurisdictions in which they operate, based on assessments of profit, risk and potential cost—that is, penalty or loss of profit. The effect of disparate regimes across Australia would depend on the quality and extent of difference but, ideally, implementation of national laws would remove the potential for jurisdiction-shopping within Australia altogether. A 2005 report of the Corruption and Crime Commission of Western Australia explains:
Geography and traditional jurisdictions work in favour of organised crime and market forces influence greatly where and how it operates.[81]
6.94 In addition, the national nature of organised crime group structures contributes to their ability to resist policing efforts, which must be pursued mainly via the seven state and territory law enforcement structures. Detective Chief Superintendent Barnett provided an example to the committee of the way in which the existence of separate jurisdictions in Australia can beset even the simplest of transactions with jurisdictional and investigative hurdles:
...one feature of the drug market...[in Queensland] which is fairly consistent is that there is a significant transhipment of bulk MDMA from New South Wales in the Sydney area up to here...So the organised crime groups that are established in Sydney are having an impact here. They are not geographically located here but they are shipping a lot of product in here, so they are having an impact remotely.[82]
6.95 On the evidence received, the committee notes that national uniformity of laws is not of itself a guarantee that there can be no gaps between state and territory regimes that can be taken advantage of by organised crime groups.
6.96 While the inquiry did not attempt an exhaustive survey of legislative regimes, submissions from and discussions with police revealed that states and territories have different experiences of similar or even identical legal regimes.
6.97 The committee observed obvious differences in what state and territory LEAs see as the most effective legislative approach in their jurisdictions, based on present priorities, assessments of local conditions and the myriad considerations going to the dynamics of organised crime within a given jurisdiction. The committee is not able to gauge the extent to which differences in local conditions could undermine uniform approaches; however, it is clear that the desirability and practicality of uniform criminal laws addressing organised crime are questions that must be answered before such an approach can be endorsed:
...it is important to have...[a] national approach, particularly in giving powers to our colleagues in Queensland to allow them to fit into, if you like, the bigger jigsaw. It is about making sure that we are fully enabled and we do not have some potential deficit in one location as opposed to another. ...We need to realise that outlaw motorcycle gangs are now organised criminals in the highest sense. They are no longer motorcycle club members that are involved in crime. They are organised crime heads and they lead syndicates that are national and international. So I think it is about making sure that...we stay very connected when it comes to things like telephone interception and capabilities.[83]
6.98 The committee observes that uniformity is a potential avenue to achieve better-designed and more-effective laws against organised crime but acknowledges that these goals may well be achieved via better coordination of state regimes, based on national and international considerations or context. A report of the Corruption and Crime Commission of Western Australia frames the issue not as one of uniformity but as one of proper balance and design:
The best defence is to create an environment that is hostile and at the very least no less hostile than that of neighbouring jurisdictions. Organised crime will gravitate to those locations in which it can operate with fewer hindrances.[84]
6.99 Assistant Commissioner Harrison expressed a similar view:
Getting harmony and encouraging the states, territories and the Commonwealth to look at getting legislation that is complementary to each and every state and jurisdiction would really go a long way to ensure that we do not have serious organised crime figures exploiting not so much loopholes but a lack of harmony between jurisdictions and states.[85]
6.100 The committee notes that an example of the operational implications of the lack of harmony between jurisdictions is the flow-on effects on cost and resources of returning a serious offender to the state where an offence took place:
...we still send detectives interstate to bring back a person for committing a fraud, hold-up or rape. Two detectives on a plane travel interstate, appear before a magistrate, make an application and then bring them back across the border...[86]
6.101 The committee is extremely concerned that the current multi-jurisdictional approach to the development and enactment of legislation which deals with serious and organised crime is so fragmented that it works to the advantage of the criminals and to the disadvantage of LEAs. Governments must move beyond the rhetoric and remove the legislative impediments which restrict LEAs in undertaking the effective detection and prosecution of serious and organised crime.
Recommendation 8
6.102 The committee recommends that, as a matter of priority, the Commonwealth, state and territory governments enact complementary and harmonised legislation for dealing with the activities of organised crime.
6.103 Evidence to the inquiry suggests that the legislative environment for serious and organised crime is developing and being refined to meet current and evolving challenges. As the committee has argued in this chapter, LEAs require legislation that is flexible enough to address the broad and evolving range of organised crime activities in Australia. The committee has some concerns about factors which it believes undermine the adequacy of the legislative environment.
6.104 While the committee heard a great deal about the collaborative arrangements that now exist between government departments and agencies, it is apparent that legislative gaps across a range of issues continue to exist.
6.105 Primarily, the committee is concerned about the lack of legislative coordination and harmonisation across jurisdictions in the area of serious and organised crime. As outlined in chapter 2, serious and organised crime does not respect Commonwealth and state boundaries, and the current federated system has produced an environment that restricts the policing of these activities nationally. The committee acknowledges the important role of the ACC in bringing a national approach to the area of serious and organised crime, but was consistently advised that the lack of legislative complementarity undermines the efforts of LEAs across Australia. It is the committee's view that this issue should be addressed as a national priority.
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