1. Introduction

1.1
There are six intelligence agencies in Australia that comprise the Australian Intelligence Community (AIC):
Australian Security Intelligence Organisation (ASIO),
Australian Secret Intelligence Service (ASIS),
Australian Geospatial-Intelligence Organisation (AGO),
Defence Intelligence Organisation (DIO),
Australian Signals Directorate (ASD), and
Office of National Assessments (ONA).
1.2
Together, AGO, DIO and ASD are known as the Defence Intelligence Agencies (DIAs) and with the Defence Security Authority,1 comprised the Intelligence and Security Group of the Department of Defence until 30 June 2015.2
1.3
The AIC operates within a strict oversight and accountability framework, which balances the need for public accountability with the need for agency operations and other sensitive information held within agencies to remain classified to protect Australia’s national security.
1.4
Within this oversight framework, the intelligence agencies have limited public reporting responsibilities because of the need to protect certain information about the agencies’ work. ASIO is the only intelligence agency that produces an annual unclassified report to Parliament.3
1.5
Notwithstanding the need to keep certain information confidential, there are several levels of oversight to ensure that intelligence agencies are held accountable to the Australian Government, to the Parliament and through it to the Australian public. This oversight includes:
the Inspector-General of Intelligence and Security (IGIS), who provides independent assurance that the AIC agencies conduct their activities within the law, behave with propriety and comply with ministerial guidelines and directives,4 and
parliamentary oversight, including oversight of administration and expenditure by the Parliamentary Joint Committee on Intelligence and Security.

Role of the Committee

1.6
The Committee was established pursuant to section 28 of the Intelligence Services Act 2001 (the IS Act). Its functions include an obligation to review the administration and expenditure of each of the intelligence agencies, including their annual financial statements.5
1.7
This important oversight role is carried out in circumstances where the transparency and public accountability of the intelligence agencies must be balanced with the need to protect national security.
1.8
The Committee is privy to detailed, largely classified, information about the administration and expenditure of agencies. Each agency provides information on its administration and expenditure to the Committee in the form of written submissions, by appearing to give evidence in private (classified) hearings, and by providing private briefings to the Committee, at its request. Much of the evidence received by the Committee must remain confidential, due to its classified nature.
1.9
The Committee has only a limited role in these reviews in advising what level of resources is appropriate for each agency to protect Australians from risks to national security. Similarly, the Committee has no role in determining what the national security priorities should be,6 nor how these priorities may be met with existing resources.
1.10
Rather, the Committee has responsibility to analyse the evidence put before it and report to the Parliament (and through it, to the Australian community) on any changes to administration and expenditure, or any other issues which the Committee identifies, that may affect the agency’s ability to continue to meet its objectives.

Conduct of the inquiry

1.11
The Committee commenced its inquiry on 10 September 2015.
1.12
Submissions were sought and received from the six intelligence agencies, the Auditor-General for Australia and the IGIS. A list of submissions is at Appendix A.
1.13
The majority of submissions received were classified by the respective agencies. Accordingly, these submissions have not been authorised for publication and are not publicly available. Unclassified excerpts from these submissions are used in the report.
1.14
Unclassified submissions from ASIO, ASIS, ONA and the IGIS are available on the Committee’s website.
1.15
Private (classified) hearings were held on 25 February, 3 March and 2 May 2016 with representatives of the six intelligence agencies and the IGIS. Appendix B lists the witnesses who appeared before the Committee.
1.16
The inquiry lapsed with the prorogation of the 44th Parliament on 9 May 2016. The Committee of the 45th Parliament resolved to resume the inquiry on 12 October 2016. As the previous Committee had concluded its evidence gathering at the time of prorogation, the Committee also resolved to use this evidence in its report. In doing so, the Committee has relied on continuing members from the 44th Parliament to finalise its report.
1.17
The report is divided into three chapters. Chapter 2 discusses administration of the intelligence agencies. The expenditure and financial position of the intelligence agencies are discussed in Chapter 3.

The security environment in 2014–15

1.18
ASIO updated the Committee on the security environment in 2014–15 and the outlook for the years ahead, noting that Australia continues to confront a broad range of security challenges.7
1.19
ASIO outlined security challenges in the following key areas:
terrorism,
espionage and clandestine foreign interference,
communal violence and violent protest, and
border integrity.8
1.20
In particular, ASIO highlighted that:
While terrorism is the most obvious and immediate challenge … espionage and foreign interference directed against Australia by foreign powers also presents a first order challenge, its impact having the potential to undermine Australia’s sovereignty.9
1.21
Describing foreign interference in Australia by foreign powers as pervasive, ASIO indicated that it ‘spans community groups, business and social associations and is directed against all levels of the Australian government and the community’ with the potential to seriously harm Australia’s national interests.10
1.22
The risk posed by ‘self-motivated individuals who exploit their access to classified or privileged information’ is also significant. In 2014–15, ASIO continued to work closely with government and the private sector to drive security reform and resilience building.11
1.23
Those adhering to a violent Islamist extreme ideology remained the principal threat to Australia, Australians and Australian interests, as the conflict in Syria and Iraq resonated strongly amongst some in the community. ASIO continued to identify and investigate Islamic extremists in Australia who are either involved in or supporting terrorism-related activities, with over 400 counter-terrorism investigations of higher interest at the end of 2014–15. ASIO highlighted that:
The challenge to Australia’s domestic security and our interests abroad from politically motivated violence has increased markedly over the past two years. We now allocate the bulk of our resources to counter-terrorism activities, with most effort against individuals and groups subscribing to an Islamist extremist ideology.12
1.24
ASIO expressed particular concern about
the emerging threat from an increasingly young and volatile cohort of terrorist sympathisers and supporters in Australia.13
1.25
On 12 September 2014, the Director-General of Security increased Australia’s general terrorism threat level to ‘High’, assessing that a terrorist attack is likely. The Terrorism Public Alert Level was increased from ‘Medium’ to ‘High’ by the Australian Government on the same day.14
1.26
With regard to communal violence and violent protest, most of the protests in Australia during 2014–15 were peaceful, although ASIO noted that antiIslam groups began to attract an increased number of people to events.15
1.27
A very low number of people-smuggling ventures and illegal maritime arrivals occurred during the reporting period. ASIO continued to contribute to whole-of-government strategies to disrupt and deter people smugglers and to undertake visa security assessments, including for additional SyrianIraqi refugees.16
1.28
Providing an outlook for the security environment, ASIO advised that:
Australia remains a terrorist target, with the principal terrorist threat arising from Islamist extremism,
low-capability attacks by lone actors or small groups inspired by Islamic State of Iraq and the Levant (ISIL) are of significant concern,
there will be persistent and ongoing challenges from clandestine foreign activity against Australia’s interests,
some potential illegal immigrants will be motivated by new and evolving global tensions to travel to Australia, and
planning of illegal ventures continues to be undertaken by committed and capable people smugglers, ‘seizing upon perceived changes to Australia’s approach to illegal maritime travel policy that could reinvigorate demand’.17

  • 1
    The Defence Security Authority is responsible for supporting Defence to protect its business from unacceptable security risks and for providing security clearances for individuals in Defence, the defence industry and most government departments. It does not fall within the oversight of this Committee.
  • 2
    Department of Defence, Defence Annual Report 2014–15, p. 43.
  • 3
    See ASIO, Submission 7.1, p. 36.
  • 4
  • 5
    See section 29 of the Intelligence Services Act 2001 (IS Act).
  • 6
    Reviewing the intelligence gathering and assessment priorities of agencies is expressly prohibited under paragraph 29(3)(a) of the IS Act.
  • 7
    ASIO, Submission 8.1, p. 8.
  • 8
    ASIO, Submission 8.1, pp. 8–13.
  • 9
    ASIO, Submission 8.1, p. 3.
  • 10
    ASIO, Submission 8.1, pp. 8, 11.
  • 11
    ASIO, Submission 8.1, pp. 12, 13.
  • 12
    ASIO, Submission 8.1, p. 8.
  • 13
    ASIO, Submission 8.1, p. 3.
  • 14
    ASIO, Submission 8.1, p. 9; outside the reporting period, the new National Terrorism Threat Advisory System was launched on 26 November 2015. Under the new system, the terrorism threat level is ‘Probable’.
  • 15
    ASIO, Submission 8.1, p. 12.
  • 16
    ASIO, Submission 8.1, p. 13.
  • 17
    ASIO, Submission 8.1, p. 13.

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