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CHAPTER 3

Key issues

3.1        This chapter considers the key issues of concern to the committee, namely the addition of ACBPS within ACLEI's jurisdiction and future inclusion of the three other agencies in 2013. This chapter also considers the impact of ACLEI's widened jurisdiction on its prioritised workload and the timeliness of its assessment and investigative functions.

Inclusion of ACBPS under ACLEI's jurisdiction

3.2        The law enforcement aspects of ACBPS came under ACLEI's jurisdiction from 1 January 2011 after the government responded to the committee's recommendation to include the ACBPS under ACLEI's purview.

3.3        In evidence regarding the 2010-11 annual report, the Integrity Commissioner had informed the committee that the 'devolution of resources at the moment is clearly towards corruption issues that have been notified or referred to ACLEI in relation to the Customs and Border Protection Service'. Mr Moss also noted at the time that the major operations underway with ACBPS involved 'considerable dedication of ACLEI staff and resourcing' which was supplemented by resources provided by ACBPS and the AFP.[1]

3.4        In 2011-12, ACLEI's focus and 'the greater part' of its resources remained with ACBPS and will remain so for the foreseeable future according to the Integrity Commissioner. Mr Moss explained that the vulnerabilities at the border are 'so high that it is not surprising that since January 2011 we have had to put a considerable focus on Customs'.[2] While ACBPS had made what the Integrity Commissioner considered to be 'considerable progress in establishing enhanced integrity measures' when it came under ACLEI's purview, ACLEI contributed to the integrity arrangements of ACBPS as part of an 'integrity partnership' which continues to develop.[3]  

3.5        While ACLEI's focus remains with the ACPBS, the Integrity Commissioner pointed out that this sustained focus had not compromised its vigilance in relation to the other agencies under its purview. Mr Moss explained that an incremental increase in ACLEI's resources since its establishment had enabled him to recruit a critical mass of people who can be deployed to various corruption issues by way of operations or task forces.[4] At the same time, he recognised that some issues had been 'pushed back' because of ACLEI's focus on ACBPS and that those issues 'are getting a little long because of that'. Mr Moss concluded, however, that 'I have not lost sight of them and I hope to return to them before too long'.[5]

3.6        The impact of the inclusion of ACBPS on ACLEI's workload is reflected in the number of notifications and referrals of possible corruption issues, many of which emanated from the ACBPS. During 2011-12, 103 corruption issues were notified or referred to the Integrity Commissioner for assessment. Three more issues were identified by ACLEI and dealt with on an 'own initiative' basis. The 106 issues represent an increase of 16 issues from 90 in 2010-11.[6] ACLEI noted that the rise over the year in review is 'largely explained' by the inclusion of ACBPS in the Integrity Commissioner's jurisdiction.[7]

Sources of information about corruption issues 2011-12 (2010-11 figures)[8]

		ACC	ACBPS	AFP	TOTAL
Notifications	Notification by law enforcement agency heads	8 (5)	29 (20)	36 (21)	73 (46)
Referrals	Minister	0 (0)	0 (0)	0 (0)	0 (0)
	Other people or government agencies	1 (9)	14 (3)	23 (32)	38 (44)
Own initiative	ACLEI intelligence/ own initiative identifications	0 (0)	0 (0)	3 (0)	3 (0)
Sub total		9 (14)	43 (23)	62 (53)	114 (90)
Less duplicates		0 (0)	8 (0)	0 (0)	8 (0)
TOTAL		9 (14)	35 (23)	62 (53)	106 (90)

3.7        In April 2012, Mr Peter Hamburger PSM reviewed the implementation of ACLEI's jurisdiction to deal with corruption issues within the ACBPS. The review examined the first twelve months of ACLEI's extended jurisdiction. Mr Hamburger concluded in his review that implementation of ACLEI's jurisdiction within ACBPS had been 'successful in terms of the development and investigation of important cases'.[9] The Integrity Commissioner informed the committee that Mr Hamburger had observed that ACLEI's 'investigation case work has moved up the scale of importance and is now concentrated in areas where the use of the Integrity Commissioner's powers and/or high-end investigative capabilities offer real benefit'.[10] However, Mr Hamburger had also observed that the pressure of this casework, 'added to the legacy of under-resourcing in ACLEI's earlier years, has severely limited the extent to which some strategic priorities have been able to be addressed'.[11] The review recognised the fulfilment of three strategic priorities as necessary to strengthen ACLEI's development including:

• contributing more to developing and acting on lessons from its initial casework in the ACBPS jurisdiction;
• embedding a new staffing model that reflects ACLEI's model of operating in an 'integrity partnership';
• driving to completion a project to 'establish and embed in normal operations a range of foundation systems in the broad area of information management'.[12]

3.8         Mr Hamburger made a number of recommendations in the review which were agreed to by the government. As part of implementing the recommendations, ACLEI commenced a restructure, including the establishment of a new Strategic and Secretariat Branch.[13]

3.9        The committee asked the Integrity Commissioner about the impact of its widened jurisdiction on its workload. The Integrity Commissioner emphasised initiatives such as Taskforce Natio, which examines the influences of organised crime and corruption risk at Australia's border, and ACLEI's ongoing investigation workload is engaging its 'resources and capabilities fully'. However, the investigations have produced and 'promise to continue to produce' results that will enable ACLEI and its Taskforce Natio partners (including the ACBPS, ACC and AFP) to 'contribute to the government's efforts to strengthen the integrity arrangements at Australia's borders'.[14]

Further expansion of ACLEI's jurisdiction

3.10      The committee questioned the Integrity Commissioner about preparations for ACLEI's expanded jurisdiction which will take effect from 1 July 2013. He informed the committee that while ACLEI is 'fully extended in its operations':

I have made it a priority to ensure that ACLEI's governance and management systems are robust and ready to meet the challenges of the increased jurisdiction in 2013. Mr Hamburger, in his report, also noted that ACLEI should invest in giving its systems and business practices a solid foundation.

In my annual report I detailed a number of important advances in ACLEI's governance arrangements. Since then I have introduced a new, two-branch structure which will allow ACLEI to continue to manage its increasingly high-tempo and technical investigations and more sophisticated task force arrangements, while still making real progress in those areas which, until now, have been forced into second place by operational priorities.[15]

3.11      Mr Moss further emphasised that ACLEI could draw on its experience with ACBPS having come within its jurisdiction after ACLEI's establishment. In terms of preparation, the Integrity Commissioner contacted the CEOs of the respective agencies as soon as the initiative was formally announced, while contact was made at the operational level to initiate discussion about arrangements for notifications of corruption to the Integrity Commissioner. Furthermore, the three new agencies will engage in the Community of Practice for Prevention, attending the first meeting of 2013 in January with the ACC, AFP and ACBPS.[16] Informed by the process previously undertaken with the ACBPS and the Carnell Scoping Study, discussions in relation to funding were initiated with the respective agencies and funding arrangements have now been agreed to.[17]

3.12      The recruitment of five extra officers will be made possible by additional funding available from July 2013 to coincide with the widening of ACLEI's jurisdiction. When questioned about recruitment of officials with specialised technical skills given AUSTRAC's highly specialised financial operations, the Integrity Commissioner informed the committee that negotiations were to begin with the CEO of AUSTRAC. However, the Integrity Commissioner also emphasised that once AUSTRAC and the other two agencies were within ACLEI's jurisdiction, their respective CEOs were required to notify ACLEI of any corruption issues.[18] As Mr Moss noted, once arrangements start coming into effect and notifications start to flow, 'it will become clearer then as to what staffing and staffing skill sets I will need'. The resourcing of ACLEI is fluid and responsive as Mr Moss explained:

Hamburger, in his second review, talked about the concertina model: you have an issue, the concertina expands and staff come in.

I am very reliant upon the goodwill and cooperativeness of the heads of agencies to give me staff, to assist... If I found I needed particular skill sets in a matter involving AUSTRAC I might go to a joint investigation with the AFP or, as provided for under the legislation, I might ask the AFP to investigate on my behalf. The array of skill sets in the AFP is considerable, and I am sure we will find someone who could meet that need. If not, I have in the past had experience of going to other agencies such as the ATO, speaking with the Commissioner of Taxation and getting people who can assist seconded to ACLEI for a time. In that particular case it was a question of getting a financial analyst on board. The skill does not have to be in-house, it can be imported, and it is being imported. Hamburger coined that nice phrase 'the concertina model' and we are going to use it, and are using it.[19]

Coercive information-gathering powers

3.13      Part 9 of the LEIC Act sets out the Integrity Commissioner's information-gathering powers. These powers require a person to produce documentary evidence or appear as a witness and answer questions truthfully at a hearing. A 'notice to produce' or a summons to attend a hearing can be issued only in relation to ACLEI investigations or joint operations.

3.14      During 2011-12, the Integrity Commissioner exercised information-gathering powers in six investigations and held nine hearings. The Integrity Commissioner also issued 15 notices to produce information, documents or things, in relation to four investigations (including two investigations that also included hearings). In contrast, there were 19 such notices issued in 2010-11.[20]

3.15      The number of summonses issued to witnesses to attend hearings in order to provide information, documents or things under section 83 of the LEIC Act increased to 13 instances in 2011-12 from 10 instances in 2010-11.[21] The Integrity Commissioner informed the committee that a coercive power hearing will usually take half a day and that:

A lot of work goes into preparing for them. The ACLEI model is that we provide in-house counsel assisting for the hearings. Another agency we are aware of uses external counsel. We tried that but it did not go very well at all. We are now reliant on our three lawyers in our legal practice to provide that. They are all very competent. They have all been prosecutors in one form or another and it really is working well from that point of view.[22]

Intrusive information-gathering powers

3.16      The Integrity Commissioner has intrusive and covert powers for the purpose of investigating possible corrupt conduct. During the year, these powers were used 17 times as part of investigation strategies relating to three investigations.[23]

3.17      Covert investigation methods provide an 'important tool for investigating corruption offences in a law enforcement context'.[24] During 2011-12, ACLEI's investigations warranted the use of telecommunications intercepts on nine occasions and a surveillance devices warrant was obtained for the first time.

3.18      The context in which intrusive and covert powers were used 17 times during the review period include:

• One search warrant under Part 9, Division 4 of the LEIC Act compared to seven in 2010-11;
• Nine telecommunications (interception and access) warrants compared to four in 2010-11;
• Seven surveillance device warrants (may include multiple devices) compared to zero in 2010-11.[25]

Emerging strategy—Telecommunications intercepts

3.19      ACLEI identified a number of emerging trends in relation to its corruption investigations including:

the formation of complex networks; new evidence of infiltration; and the increasing use of sophisticated counter-surveillance measures by officials under investigative scrutiny.[26]

3.20      In responding to these trends, ACLEI made greater use of telecommunications interception methods over the review period. In November 2011, ACLEI was allocated $2.56 million in funding to conduct a two-year pilot evaluation of a dedicated physical surveillance capability for integrity investigations.[27] These developments reflect ACLEI's 'strategic orientation towards investigating serious and systematic corruption, particularly any issues that may involve connections with organised crime'.[28] They also require of ACLEI an ability to maintain up-to-date major investigation experience and expertise if it is to contribute to inter-agency investigations of organised crime linked to law enforcement agencies. The Integrity Commissioner's strategy to meet this challenge is to second 'suitably experienced staff from law enforcement agencies'. He argued that such an approach will further 'reinforce the integrity partnership approach that remains at the core of the ACLEI model'.[29]

3.21      Reflecting on the surveillance capability available to ACLEI under its MOU with the ACC, the Integrity Commissioner noted that ACLEI was now able to draw on its full suite of investigative powers provided under the legislative framework:

It has always been there, but having the resources and capability to exercise it has been the challenge. Now at this point as we approach the end of the sixth year it is there and we are using it. We are using it in a coordinated way and are working closely with other agencies in the way we deploy those powers. Particularly in a joint situation where I am investigating, to have the ability to introduce the coercive hearing power in that suite of powers is really proving to be useful.[30]

Workload

3.22      In 2011-12, the totality of ACLEI's assessment and investigation workload amounted to 185 corruption issues.[31] These issues comprised 106 notifications and referrals (including three own initiative investigations) and 79 other corruption issues carried forward from previous years. In comparison, the total number of corruption issues before ACLEI in 2010-11 was 177.

Corruption issues carried forward

3.23      In 2011-12, there were 89 corruption issues carried forward from the previous year of which 10 were concluded after assessments determined that they did not raise a corruption issues within the meaning of the LEIC Act.[32] Of the remaining 79 corruption investigations carried over from previous years, the annual report notes that:

• 3 matters were carried over from 2007-08 (down from 14 in 2010-11);
• 12 matters were carried over from 2008-09 (down from 20 in 2010-11);
• 22 matters were carried over from 2009-10 (down from 52 in 2010-11); and
• 42 matters were carried over from 2010-11.[33]

3.24      In 2009-10, 90 issues were carried forward and in 2010-11, 80 issues were been carried forward.[34] In its previous reports, the committee expressed concerns about the increasing number of issues carried over from one year to the next and ACLEI's ability to manage the volume of work within existing resources. During the last review period, the Integrity Commissioner reported that several initiatives together with an overall increase in the budget and staffing had enabled ACLEI to manage its assessment and review function.[35] In its report on the 2010-11 ACLEI annual report, the committee had noted its satisfaction that the number of issues carried forward had not grown.[36] While the number of issues carried forward over the review period has remained consistent with the previous year, the committee intends to continue to monitor these issues in the future.

Rise in notifications

3.25      Under KPI 1 concerning notifications by agency heads, there were 73 notifications of corruption issues in 2011-12 compared to 46 in the previous year (amounting to an increase of 58 per cent in the volume of notifications).[37] When asked about the rise in the number of notifications, the Integrity Commissioner informed the committee that the increase over the review period was down to:

Nothing in particular, but I think there is a growing awareness now in the agencies, after almost six years of ACLEI's operation, of what a corruption issue looks like and a preparedness to bring it forward. I do not mean that it has been held back in any sense, but I am talking about the understanding of supervisors. Supervisors at all levels in these agencies are in the front line of combating corruption. Through programs introduced by their agency, senior management is becoming more and more aware of the importance of their role as supervisors and their role in being alert to misconduct which may lead to corrupt conduct or indeed be corrupt conduct from the outset. That is reflected in awareness and issues being notified to me.[38]

Assessment process

3.26      The Integrity Commissioner is responsible for assessing a notification or referral in the first instance to establish whether the matter is in his jurisdiction and to assess how the issue is best handled. While ACLEI can investigate the manner on its own or jointly with the agency concerned, the Integrity Commissioner noted that the great majority of matters are referred back for investigation by the agency itself which will then provide a report to him. This option enables the Integrity Commissioner to 'shift the workload back and I can equalise the workload with the resources I have'. Moreover:

The LEIC Act itself requires me to focus on the most serious systemic corruption. That is important because I am not then going to be caught up in the so-called minor issues, the lesser issues, but you never know. It can be that a matter on its face value is referred back but then on investigation it becomes clear that something quite large and serious is behind it, in which case the agency head will usually tell me and I can then reassess what I do. On the other hand, if I decide to go into a matter and it proves to be nothing, I can decide to do something else with it. So there are these points of decision along the way.[39]

3.27      In response to questions regarding ACLEI's performance in relation to assessments whereby 63 per cent were completed within the 90-day period and the 75 per cent target for completing assessments within 90 days was not met, the Integrity Commissioner drew a parallel between the timeliness of assessments and ACLEI's developing expertise:

I dream of an ACLEI that can deal very quickly with information. We want to be based on intelligence—to be intelligence led. Our sources are the notification arrangements, or the referral arrangements. There are two words used in a particular sense in the act: a 'notification' is from a head of an agency and a 'referral' is from anyone else, such as the ombudsman or an individual. It is about dealing quickly with information and trying to pick from our experience. As ACLEI develops and the years pass, this becomes more and more feasible. We know what we are looking for, we have a database that we can then apply new information to and we are starting to pick trends and patterns. This is what I hope we can continue to work towards as an agency—a greater facility to deal quickly with information.[40]

3.28      Notwithstanding this point, Mr Hayward explained that the high-risk matters are turned over extremely quickly in comparison to the lower risk matters. He noted that it was the low risk matters that had contributed to ACLEI not meeting its target of 75 per cent under KP1 which requires ACLEI to assess all notifications and referrals of corruption issues in a timely way. Mr Hayward emphasised that in relation to:

the high-risk things, through the informal mechanism of a phone call we can quickly escalate that to the Integrity Commissioner, have a decision and back out to allow the agency to continue to investigate to minimise the risk, take the investigation over or work jointly.[41] 

Issues carried forward to 2012-13

3.29      At the close of the reporting year, 126 ongoing issues were carried forward to 2012-13 which is an increase from 79 in 2010-11. The 126 issues include:

• 21 investigations by ACLEI including 41 investigations conducted jointly with other agencies;
• 71 internal investigations conducted by LEIC Act agencies, without ACLEI supervision (ACC –1; ACBPS – 28 and AFP – 42);
• 1 ACBPS internal investigation with ACLEI oversight;
• 1 AFP internal investigation with ACLEI oversight;
• 32 notifications and referrals under assessment.[42]

3.30      On 30 June 2012, over 63 per cent of these 126 corruption issues were less than one year old and a further 25 per cent were aged between one and two years. Of these matters, ACLEI noted in the annual report that:

While this outcome is comparable with the previous year's result, the larger number of corruption issues carried forward from the 2011-12 year poses a workload management risk and will be monitored carefully.[43]

 Monitoring and addressing workload challenges

3.31      When questioned about the number of corruption issues carried forward, the Integrity Commissioner emphasised to the committee that never before had so many matters been carried over from one year to another. As part of monitoring the matter, he noted that there was a need for constant vigilance.[44] The Integrity Commissioner further noted that particular attention was being paid to 'developing systems to improve ACLEI's timeliness in assessments and reporting on investigations'.[45] In addition, Mr Moss highlighted the fact that he can shift ACLEI's workload by referring matters back to the agencies and that he 'will be taking a very strict approach as to what ACLEI itself deals with'.[46] Notwithstanding this ability, even when matters are referred to the relevant agency, ACLEI must undertake the initial assessment and this has an impact on its workload.

3.32      ACLEI is also responsible for undertaking a review process when provided with a report under section 66 of the LEIC Act where the agency has conducted an investigation and reports back to the Integrity Commissioner. However, the Integrity Commissioner emphasised that he has lessened his focus on the review as he takes the approach that the agencies involved are 'very mature' in the referral and committed to uncovering a corruption issue 'rather than just skim over the top of it and leave corrupt conduct undetected'.[47]

3.33      The committee appreciates that ACLEI's workload has increased for reasons including its jurisdiction over ACBPS. However, the committee will continue to monitor the number of issues carried forward and ACLEI's overall workload.

Five years of operation

3.34      To mark the fifth year of ACLEI operations, the annual report highlights key developments over each year of its operations. The Integrity Commissioner observed that over ACLEI's five years of operation, ACLEI and the Australian Government 'have come to understand the key corruption threats to law enforcement, particularly the threat from organised crime and in particular the vulnerabilities at the border'. This understanding has affirmed ACLEI's strategic orientation towards 'investigating serious and systemic corruption, particularly issues that may involve connection to organised crime'.[48]

3.35      The committee took note of the highlights and developments in relation to ACLEI's operations. It recognised these developments as part of efforts on the part of ACLEI to establish and maintain a strong common integrity framework.

Committee view  

3.36      As noted in the introduction, the committee congratulates ACLEI on the quality and readability of its annual report and on another highly significant and fruitful year of operation. The committee appreciates the challenges before ACLEI in terms of expanding its jurisdiction and managing a greater workload. At the same time, the committee recognises that these challenges provide an opportunity for ACLEI to widen the integrity framework and its influence.

3.37      The committee found the highlights section in the 2011-12 annual report very useful. It provides a year by year overview of key highlights in relation to ACLEI's operations and development since establishment in 2006-07. The committee notes that this section, which is an expansion of a former 'snapshot' section, enables comparisons to be made between years and suggests that ACLEI provide a highlights section on each year of operation in future annual reports. The committee also notes the helpful information regarding changes to ACLEI’s operating environment contained in Appendix 3 of the 2011-12 annual report.

3.38      The committee congratulates the Integrity Commissioner on the extension of his appointment for two years and notes that this will provide the Commissioner with further opportunity to consolidate and enhance the important work of ACLEI at a time when its jurisdiction and capacities are expanding significantly.

3.39      Finally, the committee commends the Integrity Commissioner and his staff for their hard work over the reporting period and for an informative annual report. The 2011-12 annual report reflects the fact that ACLEI is now not only strongly embedded within the integrity landscape, but that its sphere of influence within the Commonwealth integrity and law enforcement environment continues to grow.

 

Mr Darren Cheeseman MP
Chair

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