Chapter 3

Chapter 3

Department of Agriculture and Water Resources

3.1        Over the course of the inquiry the committee heard from several witnesses and submitters in relation to whether ACLEI's jurisdiction should be expanded to include the entire Department of Agriculture and Water Resources (Agriculture).

3.2        As described previously, certain aspects of Agriculture's border-related operations have been subject to ACLEI's jurisdiction since 2013. This chapter examines the historical context that led to this arrangement and then considers the substantive question of whether ACLEI's jurisdiction should include other parts of Agriculture or the entire department.

Background

3.3        As discussed in Chapter 1, the expansion of ACLEI's jurisdiction has been an iterative process. This is largely reflective of its relative newness and initial small size.

3.4        The inclusion of certain prescribed functions of Agriculture has its origins in amendments to the Law Enforcement Integrity Act (2006) (LEIC Act). These amendments permit the inclusion of certain aspects of Agriculture within ACLEI's jurisdiction, as defined by regulation.[1]

3.5        Under current arrangements, the Law Enforcement Integrity Commissioner Regulations provide for the inclusion of certain Agriculture staff, all of whom are connected to certain functions relating to the cargo control systems. Of the approximately 4300 full time equivalent staff at Agriculture, approximately 1000 are subject to ACLEI's jurisdiction. These positions include:

Prescribed aspects of Agriculture

3.6        With respect to Agriculture, ACLEI submitted that the areas of highest risk that were initially included within jurisdiction were quite narrow in scope. ACLEI explained that further decisions about jurisdictional scope would be informed by a comprehensive risk assessment to be undertaken by Agriculture:

Each agency has its own distinct risk profile, specific to its core business and level of integration with other agencies with law enforcement functions. In the case of the Department of Agriculture, the initial jurisdiction was set narrowly—to address areas of highest risk (to the extent then known)—while further risk assessment work was to be undertaken to inform subsequent decision-making about jurisdictional scope. ACLEI understands that the Department of Agriculture has since commissioned a comprehensive survey of its corruption risks, as part of its broad approach to risk management.[3]

3.7        Further examination of Agriculture's risk assessment is discussed towards the end of this chapter.

3.8        The Attorney General's Department explained the two broad options for amending ACLEI's jurisdiction and the relative merits of each approach:

Prescribing an agency in the regulations allows the Integrity Commissioner’s jurisdiction to be expanded quickly, while still enabling Parliamentary scrutiny through the tabling and disallowance process. However, this approach limits the Integrity Commissioner’s jurisdiction to the law enforcement functions of a prescribed agency. From an operational perspective, this can be problematic, as staff who work in areas that support or interact with the law enforcement functions of an agency may, at various times, have access to information with value to organised crime, or which otherwise makes them susceptible to corruption. In these circumstances, questions may arise as to the ability of the Integrity Commissioner to investigate the conduct of these individuals where the particular functions they perform fall outside a traditional law enforcement role.

In contrast, amending the definition of law enforcement agency in the LEIC Act allows all of the functions of a law enforcement agency named within the definition to fall within Integrity Commissioner’s jurisdiction. This approach allows the Integrity Commissioner to comprehensively address the corruption risk to the law enforcement functions and outcomes of an agency, by removing any doubt that the Integrity Commissioner can investigate corrupt conduct in any part of that agency, should it become necessary.[4]

3.9        During the course of the committee's inquiry, the Acting Integrity Commissioner, Mr Rob Cornall, outlined the possible options for expanding ACLEI's jurisdiction with relation to Agriculture:

In relation to the Department of Agriculture, the partial inclusion of a department or agency within ACLEI's jurisdiction can present some problems. For example, ACLEI recently received advice about alleged corrupt activity involving a Department of Agriculture staff member who fell outside ACLEI's jurisdiction, so it could not assist in that matter. As you know, our current jurisdiction is limited to staff who have access to the Integrated Cargo System or have authority to release or dispatch vessels and cargoes. There is also the problem that it may be difficult to determine, in a particular situation, if a relevant officer is included in the definition of 'staff member'. It is possible that this uncertainty could lead to a legal challenge either to the exercise of ACLEI's statutory powers in an investigation or to the use of the information or evidence obtained through those statutory powers.

One solution would be to include all of the staff in the department within ACLEI's jurisdiction, but on the clear understanding that ACLEI would maintain its primary focus on law enforcement integrity. In that situation, my expectation is that the Integrity Commissioner would respect the objects of the act and exercise his or her discretion under section 16 of the act to give priority to serious or systemic corruption in law enforcement. Alternatively, the committee could consider an extension of ACLEI's jurisdiction to cover all Department of Agriculture staff in the regions—that is, at the border—and relevant back office staff in Canberra, but not ACT-based policy and other officers with no connection to law enforcement. This extended jurisdiction, with the increased definition of Department of Agriculture staff members who are subject to ACLEI's jurisdiction, would be a very significant advance on the current partial inclusion of departmental staff.[5]

Jurisdictional 'grey spots'

3.10      While Operation Heritage/Marca largely focused on corruption issues within Customs, one officer from the Department of Agriculture was also implicated. That officer eventually faced charges of 'abuse of public office, prohibited disclosure of official information, receiving a corrupting benefit and influencing a Commonwealth public official.'[6]

3.11      The arrest and subsequent conviction of the officer in question exposed a significant 'grey spot' within ACLEI's jurisdiction. This jurisdictional uncertainty arose due to the constraints imposed by the regulations relating to Agriculture as outlined above. The former Integrity Commissioner, Mr Phillip Moss, noted that the jurisdictional uncertainty was problematic for ACLEI:

An employee of that agency [Agriculture] was arrested by the AFP during Operation Heritage-Marca. That operation...was investigating criminal and corrupt conduct at Sydney international airport. The person has since been convicted...and sentenced to 14 months imprisonment, fully suspended, on entering into a good behaviour bond... Since that person's primary place of employment was at Sydney international airport, rather than in a role more clearly defined in the Law Enforcement Integrity Commissioner Act and regulations, it is not clear whether she would have fallen within the Integrity Commissioner's jurisdiction. It is conceivable that she did, but it is not clear. In my written submission I referred to this situation as a grey spot. Fortunately, in the particular circumstances of that case, the lack of jurisdiction was able to be dealt with in the context of a joint investigation.[7]

3.12      Representatives of the Attorney-General's Department added weight to the former Integrity Commissioner's concerns about jurisdictional 'grey spots':

It certainly is the case that, for example, only some staff of the Department of Agriculture are currently within ACLEI's jurisdiction. I think there is a potential there that if the Integrity Commissioner was looking at some staff who were within the jurisdiction of the Department of Agriculture and then wished to extend that investigation to consider the actions of other staff—and it was not clear whether those staff did fall within the jurisdiction or not—that has the ability potentially to undermine either the investigation or the use of the specialist powers that the Integrity Commissioner has. I think that is a risk that should certainly be noted.[8]

Committee view

3.13      The committee is concerned by the former Integrity Commissioner's evidence that it was unclear whether or not the Agriculture officer implicated in the Heritage/Marca investigation was within ACLEI's jurisdiction. The committee is of the view that such jurisdictional uncertainty poses a real risk for future ACLEI investigations involving agencies such as Agriculture where partial ACLEI coverage is prescribed.

3.14      The committee notes the former Integrity Commissioner's comments that it was fortunate Operation Heritage/Marca was a joint investigation. However under a future scenario ACLEI may not be so fortunate and an important investigation may be compromised by this grey spot. From the committee's perspective, ACLEI's identification of the 'grey spot' is an influential consideration in determining whether ACLEI's jurisdiction should be expanded to include all of Agriculture.

3.15      Similarly, the jurisdictional constraints imposed by the LEIC regulations exposed problems of 'back office' risks, which are discussed below. Both these risks are substantively connected to the current application of ACLEI's jurisdiction over Agriculture by the use of partial agency inclusion by legislative instrument.

Risks beyond the 'front line'—'black spot' risks

3.16      While ACLEI continues to monitor and investigate border-related corruption risks, the agency's submission notes that 'so-called "back-end" staff—such as information technology administrators—are as much at risk of an integrity breach as are "front-line" operational staff.'[9]

3.17      Key agencies such as ACLEI and the ACC identified back office operations as a significant corruption risk. For instance, in a submission dated July 2009 for the purpose of a former committee inquiry, the Integrity Commissioner observed that back office staff may be 'soft targets':

Law enforcement may be only one of a number of functions and services delivered by an agency. However, administrative staff and other employees or contractors support, or have access to, the agency’s law enforcement functions, information, decision-making powers, staff and systems. These staff may be soft targets and are as attractive and vulnerable to subversion or coercion by criminal groups as law enforcement personnel.[10]

3.18      ACLEI noted that recent investigations had highlighted potential corruption risks for back office support staff that could be compromised.[11] Mr Moss submitted:

Although [back-office staff] do not have front-line roles, some staff members can access valuable law enforcement information held by an agency, or have decision making authority that intersects with law enforcement functions. Furthermore, they often have the skills and ability to cover their own tracks or the tracks of others. A partial agency or activities based model may preclude the Integrity Commissioner from investigating such matters. In my written submission I used the term 'black spot' to describe the problem of artificially limiting the Integrity Commissioner's jurisdiction within an agency. The black spot and grey spot problems are especially pertinent because we know that corrupt conduct will often involve conspirators working together, across boundaries, to conceal evidence of their misconduct.[12]

3.19      ACLEI has suggested the exposure to corruption or attempted corruption of back office staff was a greater problem due to an absence of integrity measures, awareness, and training in areas that might appear to be lower risk.[13]

3.20      When asked about back office risk within Agriculture, ACLEI officers gave the following example:

One matter that immediately comes to mind is an allegation of corruption against an employee of the Department of Agriculture who did not fall within the definition of staff members who come under our jurisdiction from the regulations—in other words, the staff member was not involved in releasing imports into the country and did not have access to the integrated cargo system—so we said, 'That is all very interesting, but we cannot take this matter any further.'[14]

...in this instance because the person did not have access to the relevant systems or come within the definition of the regulations we were unable to investigate that conduct.[15]

3.21      In addition to this example, the committee is in possession of a confidential Agriculture document which provides a summary of corruption allegations and investigations that occurred over a recent two year period. While the committee chooses not to disclose the sensitive details of any of these potential integrity issues, it does observe that of a total number of 15 listed issues, 7 or nearly 50 per cent include the following note: 'the matter was not notified to ACLEI as the officer does not fall within jurisdiction.'[16] Each allegation of corruption not notified to ACLEI was either investigated by the department or the Australian Federal Police. Three of the eight matters that were originally notified to ACLEI were referred back to the department for investigation.[17]

3.22      ACLEI outlined the constraints it faces as a result of Agriculture's partial inclusion:

Under Part 9 of the LEIC Act, the Integrity Commissioner may require any person—including any Department of Agriculture staff member—to attend and provide evidence at an information-gathering hearing or to provide documents or things. However, the Integrity Commissioner may not be able to investigate the conduct of—and may not make findings about—Department of Agriculture staff members who are not prescribed under the LEIC Regulations. This situation limits ACLEI’s ability to track a corruption issue across the Department of Agriculture, hold corrupt collaborators to account, and address risk to the Department’s law enforcement functions and business outcomes.[18]

3.23      The ACC also supported additional detection and management measures to mitigate back office risks. Mr Chris Dawson, Chief Executive Officer of the ACC provided evidence that organised crime groups would seek to infiltrate or influence public servants regardless of their operational role. Mr Dawson argued that organised crime groups were more interested in sensitive information for their benefit, and would not distinguish between back office staff and frontline staff:

If it is a public sector official that is conducting an activity that is not necessarily front of house but they have access, for instance, to systems, organised crime will of course try to exploit those opportunities. It would not be right for me to say it is free of risk; it is not. Wherever organised crime will go, that of course presents a risk. That is not to say that government departments do not have good antifraud, anticorruption measures within the public sector themselves.[19]

Committee view

3.24      In addition to the concerns expressed above with regard to 'grey spot' risks, the committee is concerned by the evidence it received about 'black spot' risks. ACLEI's evidence that back-office staff, who are currently operating beyond ACLEI's jurisdiction, are seen as 'soft targets' and 'are as much at risk of an integrity breach' as its front-line staff is of serious concern to the committee. The committee is also concerned with the somewhat artificial constraints imposed on ACLEI's investigations by the current jurisdictional limitations.

ACLEI's support for whole-of-agency coverage

3.25      ACLEI supported the inclusion of the entire Agriculture department within its jurisdiction. Mr Moss argued that while Agriculture is identified primarily as a policy and program delivery agency, its biosecurity functions make it vulnerable to law enforcement corruption risks across the entire agency.[20]

3.26      Mr Moss also clearly articulated his preference for the inclusion of Agriculture in its entirety:

My submission, which is based on my knowledge of corruption risk and how it can best be mitigated, is that the Department of Agriculture should be included in the LEIC Act jurisdiction on a whole of agency basis.[21]

3.27      The former Integrity Commissioner went on to clarify that under such a scenario 'the Integrity Commissioner's role should remain focused on the law enforcement related corruption risks of any agency...'[22]

3.28      The acting Integrity Commissioner who succeeded Mr Moss reiterated this point by stating 'that the Integrity Commissioner would respect the objects of the act and exercise his or her discretion under section 16 of the act to give priority to serious or systemic corruption in law enforcement.'[23]

3.29      Despite ACLEI's support, the former Secretary of Agriculture, Dr Paul Grimes, did raise the question of whether 'well removed' officers should be subject to ACLEI's jurisdiction, providing an example of a policy officer in Canberra. He argued that officers 'working on agricultural policy matters, [have] absolutely nothing to do with our biosecurity administrative functions, processing of cargo and other matters at the border.'[24]

3.30      Although Dr Grimes would not be drawn on whether or not ACLEI's jurisdiction should be expanded, he did concede that if there were significant questions around boundaries there would be a case to include the entire Department within ACLEI's jurisdiction:

If there is a case that there is a significant issue around that boundary [of Agriculture's inclusion with ACLEI's jurisdiction] then I think there is a case to expand jurisdiction. Whether that takes you to the entire department, bearing in mind that we have officers who are well removed from these operational areas—whether that takes you to having to go to that full extent to deal with the boundary question—I really do think is open for further consideration.[25]

3.31      Dr Grimes noted however that while only prescribed aspects were subject to ACLEI's jurisdiction, the Department was nevertheless taking a 'cautious approach' by referring all potential corruption matters to the Integrity Commissioner:

[I alert] the commissioner to matters within the department to make sure that he has full visibility of the range of matters that we are managing within the department. In a sense that is providing some of the checks and balances around that boundary question. I think there is benefit in having something very simple in referring matters to the commissioner and alerting the commissioner to matters rather than trying to have a graduated system where we try to put it through some algorithm and then determine how it will be handled.[26]

Department of Agriculture risk assessment

3.32      ACLEI describes Agriculture's corruption risk in the following terms:

The Department of Agriculture has a varied and overlapping mix of policy, regulatory, facilitation, administrative and law enforcement functions. To achieve its objectives, the Department works closely with other Commonwealth, State and Territory-based agencies that have law enforcement roles and, in some instances, works in shared premises or otherwise has shared access to sensitive law enforcement information. Accordingly, corruption risk to broad law enforcement outcomes can arise in many ways, whereby a corruptor may attempt to subvert or divert apparently innocuous public functions to achieve private or criminal ends.[27]

3.33      In September 2014, Agriculture provided the committee with a copy of its Corruption Risk Assessment (risk assessment). The report is an internal Agriculture document. It contains a comprehensive assessment of Agriculture's activities, including those not currently within ACLEI's jurisdiction. In including the following commentary, the committee is mindful to not disclose integrity risks or operational information that is specific to Agriculture.

3.34      The risk assessment was developed by engaging internal business areas as well as external law enforcement agencies. It initially identifies those areas within Agriculture that are potentially at risk of corrupt practices. It then considers the effectiveness of the current control environment.[28]

3.35      In its approach, the risk assessment defines the relationship between likelihood and consequence applicable to the risk under review.[29] A range of factors is taken into consideration when determining the rating of likelihood and consequence.[30]

3.36      As might be anticipated, the corruption risks that lie outside ACLEI's jurisdiction are not estimated to be as serious as those for employees involved in the department's front-line regulatory function. This is to be expected because ACLEI's prescribed coverage of Agriculture was designed to encompass the higher risk areas of the department. Nevertheless, the corruption risk for one particular departmental function which falls outside ACLEI's jurisdiction was assessed to have a 10–20 per cent probability of occurring during 2014–2016 and which could result in moderate reputational damage to the department or government and a financial loss of $1 000 000–$10 000 000.[31] The department has recently advised that for this corruption risk 'two additional treatment measures' have been implemented which have mitigated the likelihood of this risk to 'remote' (less than 10 per cent) while the consequence remains 'moderate'.[32]

Budgetary implications of expanding ACLEI's jurisdiction

3.37      Budgetary implications were cited by the former Secretary of Agriculture as a key factor in considering whether ACLEI's jurisdiction should be expanded.

3.38      Representatives of the Attorney-General's Department also touched on this subject when they referred to an unpublished report to the Minister for Justice, stating:

The [unpublished] report also notes though that, in principle, resourcing requirements should not influence decisions on jurisdiction and those decisions on jurisdiction should be made on the merits or otherwise of applying the Integrity Commissioner's powers to particular agencies; however, ACLEI is a very small agency and any extensions of the Integrity Commissioner's jurisdiction would increase its workload and have resourcing implications that could not be met from within ACLEI's existing resources, so any expansion would need to be coupled with appropriate resourcing and secured as part of the normal budget process.[33]

3.39      ACLEI noted that an additional $0.725 million and $0.732 million was received in 2013-14 and 2014-15 respectively for the implementation of ACLEI's expanded jurisdiction in 2013 to include AUSTRAC, CrimTrac and Agriculture's cargo management functions.[34]

3.40      The former Integrity Commissioner, Mr Phillip Moss noted that expanding ACLEI's jurisdiction was ultimately a consideration for government as to whether the risk outweighed the cost:

...the funding of agencies is determined by government through the government process, based on the government's policy priorities at the time and its assessment of risk and opportunities.[35]

Committee view

3.41      The committee acknowledges that at face value, unlike Commonwealth bodies such as the AFP and the ACC, the Department of Agriculture and Water Resources is not a typical law enforcement agency. Agriculture does however, have some very important law enforcement functions that contribute to the security of Australia's borders. These include its screening for biosecurity risks and cargo management responsibilities at Australia's international airports and seaports. It was as a result of these important responsibilities that in mid-2013 the Agriculture portfolio was partially included within ACLEI's jurisdiction.

3.42      The committee notes that Operation Heritage/Marca uncovered a critical 'grey spot' that created a legal ambiguity for ACLEI's investigation. Were it not for the joint AFP-ACLEI operation that ensured coverage, this jurisdictional uncertainty may have obstructed ACLEI's investigation into serious allegations of corrupt activity at the Sydney International Airport.

3.43      The committee also acknowledges the evidence relating to 'back office' or 'black spot' risks. The committee agrees with the ACC's assessment that organised crime figures will use whatever means available to them, regardless of a staff member's proximity to the border, when attempting to compromise Commonwealth departments and agencies. Further, the committee acknowledges the increasing use of ICT systems results in greater access to sensitive law enforcement information.

3.44      The committee also notes the practice of former Secretary Grimes in referring all potential corruption issues to ACLEI for consideration. This is the same pragmatic approach advocated by the former head of Customs and now Secretary of DIBP, Mr Pezzullo, which is described in Chapter 2.

3.45      Finally the committee notes the Integrity Commissioner's support for whole‑of‑agency coverage.

3.46      Accordingly, the committee is persuaded that it is preferable to have the entire Department of Agriculture and Water Resources included within ACLEI's jurisdiction. Although the committee acknowledges that the corruption risks apparent in the prescribed parts of the department are higher than in those not currently prescribed, there is sufficient evidence of corruption risks in other parts of the department to warrant the expansion of ACLEI's jurisdiction.

3.47      The committee does not favour a partial expansion of ACLEI's jurisdiction to higher risk areas such as ICT support as this would merely shift the grey spots and black spots rather than remove them as an impediment to the Integrity Commissioner's future corruption investigations.

3.48      The committee notes that section 16 of the Law Enforcement Integrity Act 2006 requires the Integrity Commissioner to give priority to corruption issues that constitutes serious corruption or systemic corruption. Given that Agriculture's functions that are not already prescribed by regulation are relatively lower risk, it is likely that an expansion jurisdiction will not result in a significant workload increase for ACLEI or Agriculture.

Recommendation 1

3.49      The committee recommends the government amend the Law Enforcement Integrity Act 2006, to include the entire Department of Agriculture and Water Resources within the Australian Commission for Law Enforcement Integrity's jurisdiction.

3.50      To fully support ACLEI's expanded jurisdiction, the government should assess the additional resources required by ACLEI to ensure that the transition is adequately funded.

3.51      Furthermore, Agriculture should provide appropriate training and guidance for staff that will for the first time be covered by ACLEI's jurisdiction.

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