2.1
This chapter examines evidence to the inquiry, and includes the Committee’s comments and recommendations on the Bill.
Role of the Attorney-General
2.2
The joint Departmental submission noted that changes relating to establishment of the Home Affairs portfolio will be
complemented by changes to strengthen the Attorney-General’s role in integrity and oversight which will reinforce the Attorney-General’s responsibilities as the Commonwealth’s First Law Officer, including protecting the rule of law in Australia, and playing a key role in contributing to the development of legislation across all portfolios.
2.3
In evidence to the Committee, the Deputy Secretary of the Department of the Prime Minister and Cabinet (PM&C), Mr Allan McKinnon, stated that:
A key feature of the new arrangements will be enhanced accountability. The amendments in this bill cement the role of the Attorney-General in oversighting our security and intelligence agencies.
2.4
Mr McKinnon explained:
While responsibility for ASIO will transfer to the Minister for Home Affairs, importantly, the Attorney-General, as our first law officer, will retain his or her current role in agreeing to security related ministerial authorisations, issuing of warrants to ASIO under the ASIO and the telecommunications interception and access acts, and authorising special intelligence operations. The amendments in this bill enable the Attorney-General's ongoing role in relation to ministerial authorisations and facilitate the Attorney-General's ongoing role in issuing ASIO warrants by ensuring intelligence agency officials can continue to disclose AUSTRAC information to the Attorney-General following the transfer of ASIO.
2.5
The Law Council indicated its support for the Attorney-General’s continued role in issuing warrants under the TIA Act and ASIO Act, authorising special intelligence operations under the ASIO Act, and giving agreement to security-related Ministerial authorisations under the IS Act:
The measures above require decisions which permit agencies to operate outside the usual boundaries of the law. As First Law Officer, the Attorney-General is well-placed to make assessments about the lawfulness of conduct by the AIC and to ensure that the Australian Intelligence Community (AIC) operates within the appropriate confines of the rule of law.
2.6
The Law Council also supported ongoing oversight of AIC agencies and national security laws by the Inspector-General of Intelligence and Security (IGIS) and Independent National Security Legislation Monitor (INSLM).
2.7
The Law Council of Australia stated its preference that ‘explicit reference’ be included in the Bill to the Attorney-General rather than the Minister to ‘assist in ensuring’ that the First Law Officer has responsibility for oversight of the IGIS and INSLM.
2.8
Specific issues raised in relation to each Bill are discussed below.
Anti-Money Laundering and Counter-Terrorism Financing Act 2006
2.9
As noted earlier, the Attorney-General will continue to perform particular functions, such as issuing ASIO warrants and authorising special intelligence operations. The Explanatory Memorandum states that:
It is important that ASIO and other intelligence agency officials can continue to disclose AUSTRAC information to the Attorney-General for the purpose of these functions.
2.10
The joint Departmental submission noted that as responsibility for ASIO and the TIA Act will transfer to the Minister for Home Affairs, in the absence of the proposed amendments,
intelligence agencies could be unable to disclose sensitive financial information to the Attorney-General in support of relevant applications.
2.11
The Departments explained that:
It will remain the case that information can only be disclosed to the Attorney-General in very limited circumstances, related to his or her ongoing functions. There are strong safeguards in the AML/CTF Act to ensure information is only disclosed in appropriate circumstances.
2.12
The Law Council raised concerns about the sharing of personal information and recommended that
an independent review be conducted to examine the adequacy of safeguards around the secondary use and disclosure of personal information held by the AIC to ensure that the purpose of access to personal information is always to enable the exercise of one of the functions only for which access was granted. The Law Council recommends that any sharing of information between AIC agencies be done in accordance with the Australian Privacy Principles, and in consultation with the Australian Privacy Commissioner.
2.13
Responding to the Law Council’s concerns, PM&C stated:
That extra ability to transfer information is only done in accordance with the Australian Privacy Principles and consultation with the Australian Privacy Commissioner. The bill does not impact upon information-sharing between agencies. That's the very important thing about that. It's focused only on disclosure of information by the agency to a minister for a very specific purpose—that is, the authorisation of a warrant.
Independent National Security Legislation Monitor Act 2010
2.14
The Explanatory Memorandum offers the following justification for expanding the referral power under section 7 of the INSLM Act so that both the Prime Minister and the Minister administering the INSLM Act may refer a matter to the Monitor:
It is appropriate the Prime Minister (as Chair of the National Security Committee of Cabinet and lead Minister responsible for the National Intelligence Community and whole-of-government national security and intelligence policy coordination) continues to have the power to refer a matter to the Monitor, in addition to the Minister responsible for administering the INSLM Act. To avoid confusion, the Prime Minister will be the only minister who can direct the Monitor about the order in which he or she is to deal with references.
2.15
The Law Council expressed concern that the ability of the INSLM to conduct own motion reports ‘may be hindered by a requirement to respond to referrals by both the Prime Minister and the Attorney-General’. The Law Council advocated that:
Should this amendment be implemented, the INSLM’s office should also be allocated additional resources to fulfil its expanded responsibility and to ensure that the INSLM will be able to conduct own motion reports.
Inspector-General of Intelligence and Security Act 1986
2.16
In her submission, the Inspector-General of Intelligence and Security, the Hon Margaret Stone, raised concerns about the proposed amendment at item 35 of the Bill, which would amend subsections 9(1) and (3) of the IGIS Act by inserting ‘or the Minister’ after Prime Minister.
2.17
Currently, section 9 of the IGIS Act is as follows:
9 Additional inquiry functions of Inspector‑General
Intelligence agencies
(1) The Prime Minister may request the Inspector‑General to inquire into a matter relating to an intelligence agency.
(2) The Inspector‑General must comply with a request under subsection (1) if inquiring into the matter is within the functions of the Inspector‑General referred to in section 8 (whether those functions may be performed following a request by a Minister or otherwise).
Commonwealth agencies
(3) The Prime Minister may request the Inspector‑General to inquire into an intelligence or security matter relating to a Commonwealth agency.
(4) The Inspector‑General must comply with a request under subsection (3).
2.18
The Inspector-General noted that the proposed amendment would have the effect ‘of giving the Attorney-General the same power to compel the Inspector-General to undertake an inquiry as the Prime Minister’. The Inspector-General went on to say:
Doubling the number of ministers with this power is, in itself, a significant incursion into the independence of the Inspector-General. Nevertheless, given the Prime Minister’s position of overall responsibility for the National Intelligence Community it is not inappropriate that this power should be retained. In the case of the Attorney-General this consideration does not apply; moreover the Attorney’s position as the minister responsible for authorising warrants requested by ASIO is likely to give rise to a perceived conflict of interest. For instance, could a direction to undertake a particular inquiry be seen to divert the resources of this office from a review of ASIO warrants?
2.19
The Inspector-General concluded:
The power of the Attorney-General to compel an inquiry would materially detract from the Inspector-General’s power to assure the public, as well as Parliament, that the decision to conduct an inquiry is free from political influence.
2.20
For these reasons, the Inspector-General urged that the proposed amendments to sections 9(1) and 9(3) of the IGIS Act be rejected.
2.21
In evidence to the Committee, the Inspector-General elaborated on her concerns, stating that her overall objection to the Bill ‘is the increase in restrictions on the independence of my office’.
2.22
While noting that the provisions that effectively allow the Prime Minister to direct her to undertake an inquiry are ‘a limit to the IGIS’s independence’, the Inspector-General indicated that she accepted this provision on the basis that
(a) it’s well-established; (b) it’s the Prime Minister; and (c) all of this occurred before I took my present position, and I have no interest in arguing that that should be changed.
2.23
However, while the Inspector-General considered the Prime Minister to be the appropriate Minister to have the power to direct the IGIS, she stated that:
When you add the Attorney-General to that and give the Attorney-General the same powers, you double the bite out of our independence.
2.24
The Inspector-General argued that ‘the independence of this office is its most important asset’. She considered that:
If you look at the objects of the act in section 4, the objects are to assist ministers and the government in assuring parliament and the public of a whole range of things, including the transparency and rigor of scrutiny in relation to our security agencies and the enormous powers they have. The objects don’t deal with how the inspector-general does that. The inspector-general’s functions and the freedom that the inspector-general has in exercising those functions provide the independence that I’m talking about.
When I talk to the public, the single most cynical, sceptical, critical comment that’s made about our office and its efficacy in discharging those objects is that it’s not really independent. ‘It’s in the Prime Minister’s portfolio; it’s an arm of the government; you’re not really independent.’ To my mind, actual and perceived independence are equally important. To add another minister, particularly one who may well be or will be authorising aspects of an agency’s activity which are key part of our scrutiny, is to play into not only a substantive compromise of our independence but also a perceived compromise of our independence.
2.26
In response to a question about whether her objection was to the fact that there would be two ministers able to direct her inquiries or to the fact that it is the Attorney-General in addition to the Prime Minister, the Inspector-General stated:
The short answer is both. It is both of those objections.
2.27
The Inspector-General explained that:
I'm not for a moment suggesting that the present Attorney-General or any Attorney-General would misuse that power, but when I look at what the public say to me about the independence of this office—bearing in mind the object of the act is to assist the government in assuring parliament and the public of the appropriate scrutiny of intelligence agencies' activities—bringing the Attorney-General in as an additional minister, and with this compromise, creates a big problem for that perception.
2.28
Further, in her view, ‘the potential for uniformed perception is something that parliament should be taking into account’.
2.29
The Law Council of Australia similarly suggested that the Committee consider whether there is
a potential or perceived conflict of interest regarding the Attorney-General’s ability to issue Australian Security Intelligence Organisation (ASIO) and TIA Act warrants and to give agreement to security-related Ministerial authorisations under the IS Act, while at the same time, having in his portfolio the body responsible for determining the legality and proprie[ty] of those warrants.
2.30
Responding to questions from the Committee about the possible diversion of resources, the Inspector-General confirmed that the changes proposed in the Bill would not increase the scope of what the IGIS is both required to and able to inquire into, her access to information, the obligation of agencies to cooperate with her office, or her ability to conduct inquiries as she see fit. However, the Inspector-General said that while ‘there’s nothing that inherently affects the priority I assign’,
that’s really ignoring the reality, which is that if you get a direction from a minister that must be complied with then inherent in that, in my view, is an implication that it must be complied with within a reasonable time.
2.31
During the public hearing, the Committee sought the Departments’ views on the IGIS’s concerns. Mr McKinnon, Deputy Secretary of PM&C, told the Committee:
We think that the government has decided that the Prime Minister retaining the right to direct IGIS to investigate is actually a strengthening of the system.
…in the second Hope commission there was a very clear consideration of what this role would be. It was to be assisting ministers in their oversight. I don’t think there was ever a conception that it would be completely independent of executive government. So I don’t share those concerns that it will in any way impede IGIS’s independence.
2.32
Mr McKinnon continued:
As we heard the other day, she or he will have complete independence to investigate, as they can at the moment, and make their own conclusions. That is where their independence is their strength. They do the investigation. They make the conclusions. All of that is completely at their own volition.
2.33
In response to questions from the Committee, Mr McKinnon explained that:
Our strong thinking was that it seemed like a very sensible, logical and natural thing for the Prime Minister, as the minister with overall responsibility for the intelligence community, to retain that power that he or she had had. At the same time we wanted a genuine of transfer of powers to the Attorney-General, so there is definitely in all of this, including the retention of the authorisation of certain ASIO activities in the movement of the ASIO bill, an intention that the Attorney-General's role be genuinely beefed up. The Prime Minister has referred to it as the second pillar of the reforms—keeping it because the Prime Minister still has overall responsibility; moving it because we want the Attorney-General to have a proper oversight and integrity function.
Retaining the role for the Prime Minister, in addition to the Attorney-General, in referring matters for inquiry could also manage any perceived conflict of interest. Although we don't accept there would be any, we can see that could be another method. As I mentioned before, in that context the IGIS always has the option of going to the Prime Minister and saying, 'I have a concern about this; the Attorney-General is giving me these other inquiries,' and the Prime Minister could make up his or her own mind.
2.35
Similarly, representatives of the Attorney-General’s Department added:
[O]ur view is that it is appropriate that the Attorney-General have that power of direction as the minister responsible for integrity and the minister who will then be responsible for oversight of the intelligence community.
2.36
Mr McKinnon concluded:
Unfortunately, what we are left with here is the option of not moving IGIS at all, or conceivably the Attorney-General having the ability to direct, under section 9, but not the Prime Minister. Those are fairly significant changes to the Prime Minister’s stated intention of having the Attorney-General in this heightened, strengthened role of integrity oversight.
2.37
Submitting in a personal capacity, Valerie Heath argued that the reports of the IGIS should be made to the Prime Minister and Attorney-General in addition to the responsible Minister, whether or not the report was requested by the Prime Minister. She considered IGIS reports should also be made available to the Leader of the Opposition.
Intelligence Services Act 2001
2.38
The Explanatory Memorandum summarises the Attorney-General’s ongoing responsibilities under the IS Act as follows:
In addition to retaining responsibility under paragraph 9(1A)(b) for agreeing to security-related Ministerial authorisations, the Attorney-General will also retain responsibility for exercising powers under existing provisions where the Attorney-General is already expressly referred to, including:
consultation in relation to approvals under subsection 13(1A) for ASIS to cooperate with foreign government authorities in activities involving violence against the person, the use of weapons or paramilitary activities;
consultation under paragraph 15(3)(c) prior to the approval of the Rules to protect the privacy of Australians for each IS Act agency; and
consenting to prosecutions for offences under section 41A and Schedule 1 clause 13.
The Attorney-General will also be required to be consulted prior to the making of cooperation guidelines under section 13G of the IS Act, which apply to the undertaking of certain types of activities by ASIS in support of ASIO that would normally require Ministerial authorisation.
The Attorney-General will also be empowered to refer certain matters to the Parliamentary Joint Committee on Intelligence and Security under section 29, reflecting their enhanced oversight and integrity role in relation to the intelligence community.
2.39
The joint Departmental submission noted that section 3A of the IS Act makes specific provision for how references to Ministers should be read. The Departments considered that:
There is a risk that this section would displace the operation of section 19B of the Act Interpretation Act, under which substituted reference orders are made. Accordingly, legislative amendments avoid any risk that substituted reference orders would be ineffective.
2.40
The Law Council supported the Attorney-General being able to refer matters to the Committee. However, noting that this increased the number of Ministers able to refer a matter to the Committee, it argued that ‘the Committee should be allocated appropriate resources to fulfil its expanded responsibility’.
Committee comment
2.41
The majority of the machinery of government changes to establish the Home Affairs portfolio have been achieved through amendments to the Administrative Arrangements Order and the making of the Substituted References Order of 20 December 2017.
2.42
The Bill addresses specific matters relating to establishment of the Home Affairs portfolio that could not be dealt with administratively.
2.43
It does not, however, include amendments to the Australian Security Intelligence Organisation Act 1979 or the Telecommunications (Interception and Access) Act 1979 to facilitate the Attorney-General’s ongoing role alongside the Minister for Home Affairs, who will become the Minister responsible for the ASIO Act.
2.44
The principal concern raised in evidence to the Committee was the effect of the Bill on the Inspector-General of Intelligence and Security and, specifically, her perceived and actual independence, which the Inspector-General described as her office’s most important asset.
2.45
As noted in evidence to the Committee, the office of the Inspector-General of Intelligence and Security arose from the second Hope Royal Commission. In his 1984 report, Justice Hope recommended establishment of this office with
power to inquire into and to report upon ASIO’s compliance with the law and with propriety, and the appropriateness and effectiveness of its internal procedures. This recommendation is not intended to divert or to intrude upon the responsibility of the Attorney-General or of the Director-General of Security but to provide an independent oversight of ASIO’s activities, to the public a greater assurance that those activities are proper ones, and to clear ASIO, or to bring it to task, as the case may be, if allegations of improper conduct are made against it.
2.46
In the same report, Justice Hope also stated:
If my recommendations about an Inspector-General are accepted, the public interest in knowing whether ASIO (or indeed any intelligence service) is conforming with the requirements of the law and of propriety will be met by that officer’s investigations and reports. The public’s curiosity about the facts may not be satisfied, but the public will know whether it can have confidence in the integrity of the security and intelligence services; and the interests of any individual who might be adversely affected will be protected.
2.47
The importance of assurances to the public as described by Justice Hope is reflected in the objects of the IGIS Act. It is similarly intended that assurances be provided to the Parliament about the activities of the intelligence agencies. The Committee considers the perception of and actual independence of the Inspector-General is important to providing such assurances.
2.48
The Committee notes evidence from the Department of the Prime Minister and Cabinet that the amendments proposed in the Bill are in line with broader portfolio changes to implement a heightened integrity and oversight role for the Attorney-General. The Committee supports strong oversight of the AIC.
2.49
The Committee supports the continuation of the Prime Minister’s existing power in section 9 of the IGIS Act to direct the Inspector-General to undertake an inquiry. This is a longstanding power that reflects the Prime Minister’s position as head of the National Intelligence Community and has been used judiciously to date.
2.50
The Committee considers that caution should be exercised regarding changes to the Inspector-General’s role that could be perceived to impact on her independence. For this reason, and to allay the concerns of some, the Committee recommends that item 35 of the Bill be amended to provide a direction power only to the Prime Minister.
2.51
The Committee supports the proposed amendments at item 34 of the Bill, which will amend subsections 8(1), 8(2) and 8(3) of the IGIS Act to enable the Minister administering that Act, in addition to the responsible Ministers for ASIO, ASIS, AGO, ASD, DIO or ONA, to request the Inspector-General to inquire into a matter relating to the Inspector-General’s functions (as outlined in section 8).
2.52
In addition, the Committee considers the amendments in the Bill that provide for the Prime Minister and the Minister administering the IGIS Act to receive copies of the Inspector-General’s reports to be appropriate.
2.53
The Committee recommends that the Home Affairs and Integrity Agencies Legislation Amendment Bill 2017 be amended so that only the Prime Minister is empowered to request the Inspector-General of Intelligence and Security to undertake an inquiry under section 9 of the Inspector-General of Intelligence and Security Act 1986.
2.54
To more clearly reflect the Government’s intent concerning a strengthened oversight role for the Attorney-General, the Committee considers that any reference to the ‘Minister’ in the INSLM Act and IGIS Act, where this refers to the Minister administering that Act, should explicitly refer to the Attorney-General.
2.55
While the Committee acknowledges that even with this specific reference, the law relating to statutory interpretation could enable the Act to be read a different way, explicit reference to the Attorney-General on the face of the legislation would provide public assurance about the Government’s intentions. The Committee notes the advice from the Department of the Prime Minister and Cabinet that this amendment is possible.
2.56
The Committee recommends that the Home Affairs and Integrity Agencies Legislation Amendment Bill 2017 be amended to replace reference to the ‘Minister’ in the Independent National Security Legislation Monitor Act 2010 and Inspector-General of Intelligence and Security Act 1986 with ‘Attorney-General’ where such references refer to the Minister administering the Act.
2.57
The Government’s intention, as outlined in the joint Departmental submission, was that a Substituted References Order would implement amendments to the Australian Security Intelligence Organisation Act 1979 and the Telecommunications (Interception and Access) Act 1979 to facilitate the Attorney-General’s ongoing role. The Committee notes, however, more recent advice from representatives of the Department of the Prime Minister and Cabinet that legislative amendments are well advanced. The Committee considers it would be preferable that these amendments be introduced and considered as soon as possible and preferably in conjunction with this Bill.
2.58
The Committee recommends that the legislative amendments to the Australian Security Intelligence Organisation Act 1979 and Telecommunications (Interception and Access) Act 1979 to give effect to the ongoing role of the Attorney-General be introduced to the Parliament prior to the conclusion of debate on the Home Affairs and Integrity Agencies Legislation Amendment Bill 2017.
2.59
The Committee notes that, in addition to the four Acts amended by the Bill, legislative amendment to 33 Acts will be required to transfer Ministerial responsibility for those Acts. At the public hearing, Mr McKinnon indicated that this legislation was well advanced.
2.60
The Committee also notes that Appropriation Bill (No. 3) 2017–2018 introduced by the Prime Minister on 8 February 2018 provides for an additional $15.22 million in funding to the IGIS.
2.61
The Committee considers that these further legislative amendments should be introduced to the Parliament as soon as possible.
2.62
The Committee received limited evidence regarding the proposed amendments to the Anti-Money Laundering and Counter-Terrorism Financing Act 2006, Independent National Security Legislation Monitor Act 2010 and Intelligence Services Act 2001, and supports the amendments as proposed. Subject to the Committee’s recommendations concerning changes to the Inspector-General of Intelligence and Security Act 1986 and the introduction of amendments to the Australian Security Intelligence Organisation Act 1979 and Telecommunications (Interception and Access) Act 1979, the Committee recommends that the Bill be passed.
2.63
Subject to implementation of the Committee’s recommendations, the Committee recommends that the Home Affairs and Integrity Agencies Legislation Amendment Bill 2017 be passed.
Chair
February 2018