Overview
2.1
This chapter discusses the main issues addressed by inquiry participants regarding the operation of the Australian Crime Commission Amendment (Special Operations and Special Investigations) Act 2019 (SOSI Act), including:
the adequacy and effect of changes introduced to the threshold test the Board applies when considering the authorisation of a special operation or special investigation, including the appropriateness of the public interest test introduced as part of that threshold test;
whether oversight of the Board's decision-making process is sufficient; and
concerns relating to the retrospective validation provisions of the SOSI Act.
2.2
After summarising the evidence received in this inquiry, this chapter presents the committee's conclusions regarding the operation and effectiveness of the SOSI Act.
Changes to the Board's threshold test
2.3
As outlined in Chapter 1, the SOSI Act amended the Board's approach to authorising a special operation/investigation by determination. Subsection 7C(4A) sets out that, in order for the Board to authorise a special operation/investigation, it must be satisfied that based on the collective experience of the voting members of the Board it is in the public interest to do so. This is the only condition that the Board must now have regard to in considering whether to authorise a special operation/investigation. In addition, the SOSI Act repealed the Board's statutory need to consider several other conditions before authorising a special operation/investigation:
In relation to special operations: whether methods of collecting the criminal information and intelligence, outside of the powers in the ACC Act, have been effective at understanding, disrupting or preventing the federally relevant criminal activity.
In relation to special investigations: whether ordinary police methods of investigation into matters were likely to be effective at understanding, disrupting or preventing the federally relevant criminal activity.
Expansion and disparity concerns
2.4
The Law Council of Australia (Law Council) argued that the introduction of a sole condition and the removal of the Board's need to consider other ordinary police or intelligence collection methods 'diluted' the threshold for authorising a special operation/investigation. The Law Council acknowledged that the amendments to section 7C of the ACC Act did not 'directly amend the ensuing examination powers'. Nonetheless, it contended the changes had resulted in an 'expansion' of the circumstances in which coercive powers may lawfully be exercised. It noted that individuals, including non-suspects, minors and other vulnerable persons who are liable to examination, face the abrogation of privilege against self-incrimination, and risk criminal penalties for non-compliance with obligations to appear at examinations and answer questions, or produce documents or provide other information to ACIC examiners.
2.5
The Law Council argued that the introduction of the public interest test meant the loss of 'deliberate and targeted safeguards' that had applied to authorisations of special operations/investigations, and had thus been central to the proportionate exercise of the ACIC's coercive powers of examination.
2.6
Further to this, the Law Council deemed that the public interest test is 'considerably lower and less precise' compared to the statutory thresholds that apply to other uses of the ACIC's intrusive powers, and the exercise of comparable powers by other Commonwealth law enforcement and intelligence agencies. As an example, the Law Council pointed to the ACIC's thresholds for obtaining warrants to intercept telecommunications under the Telecommunications (Interception and Access) Act 1979 (TIA Act). The Law Council explained that the TIA Act 'requires the issuing authority to be satisfied of specific matters relevant to the proportionality of the proposed interception activities', including:
the seriousness of the conduct constituting the offence being investigated and how helpful the information sought to be obtained would assist with that investigation; and
the availability and likely effectiveness of other methods to obtain the wanted information and whether the timeliness of obtaining the information by other means would prejudice the investigation.
2.7
In contrast to the views of the Law Council, the ACIC and the Board advised that the SOSI Act 'streamlined' and 'strengthened' the process for making special operation/investigation determinations. They argued that the SOSI Act amendments were technical in nature and did not expand or alter the powers available to the ACIC in the course of undertaking a special operation/investigation.
2.8
The ACIC advised that the changes implemented by the SOSI Act were crucial to ensure it can continue to 'conduct coercive examinations and gather key intelligence on serious and organised crime groups impacting Australia in situations where traditional law enforcement methods are unlikely to be effective'.
2.9
Mr Michael Phelan, Chief Executive Officer of the ACIC, acknowledged the concerns of the Law Council regarding coercive powers and the abrogation of the right to silence. He recognised that the powers are an 'extremely important tool that must be used very discerningly'. However, Mr Phelan explained to the committee that the 'powers are used relatively sparingly' and are employed against those at the 'highest end of criminality', who have 'very deep pockets' and are continually litigating the ACIC.
2.10
While discussing the advantages of coercive examinations in terms of the detailed information they provide, Mr Phelan clarified that individuals before an examination are granted use immunity in most circumstances:
The hearings conducted by the [ACIC] have also illuminated a fair bit more detail that…would not have been obtained but for the coercive powers of the commission where individuals and witnesses who appear before the commission under examination are granted use immunity…anybody that comes before the commission, whilst they're forced to answer questions, anything that is said by [them] cannot be used against themselves under most circumstances, unless, of course, they lie to the commission for those sorts of offences.
Public interest test
2.11
The Law Council and the Australian National University Law Reform and Social Justice Research Hub (ANU LRSJ Research Hub) raised concerns regarding the Board's application of a public interest test to authorise special operations/investigations by determination.
2.12
The Law Council argued that the public interest test 'carries a significant practical potential for miscarriage, confusion and a lack of transparency' as it is 'unstructured' and enlivens the ACIC's coercive powers. It asserted that to authorise a special operation/investigation based on public interest, requires an evaluation of relevant issues and the degree of weight that should be given to them.
2.13
At the public hearing, Mr Tim Game SC, Member of the National Criminal Law Committee from the Law Council, told the committee, 'public interest is an idea, and you have to fill it with substance. You have to say that the public interest includes things apart from pure law enforcement exigencies'. Mr Game pointed out that the considerations of the Board are unknown, and under the Act it does not need to address or satisfy itself with any specific criteria regarding public interest; this, Mr Game concluded, results in reduced transparency.
2.14
The ANU LRSJ Research Hub stated that the term 'public interest' is commonly used in public administration, yet it is very difficult to define. It submitted that while the term does not necessarily need to be defined in the ACC Act, the term should be supported by guiding principles to assist decision-making. The ANU LRSJ Research Hub also stated that because the ACIC's actions will likely impact on individual freedom and privacy, especially in the absence of an Australian human rights legal framework, it is important that individual rights, such as privacy, are 'expressly recognised as a countervailing factor to the public interest'.
2.15
The Law Council contended that the ACC Act should contain statutory guidance in relation to the application of the public interest test, as this would provide 'demonstrable assurance and transparency about the rigorous and consistent application of that test by the ACIC Board'. Furthermore, it suggested that the Board should 'consider and be satisfied of, the necessity and proportionality, of exposing a person to examination powers in situations that are likely to be most intrusive upon fundamental rights'.
2.16
To achieve this, the Law Council suggested that section 7C of the ACC Act be amended so that:
…the Board cannot make a determination, unless satisfied on reasonable grounds that making the determination is reasonably necessary for, and proportionate to, the purpose of understanding, preventing or disrupting federally relevant criminal activity.
2.17
Moreover, the Law Council suggested that the public interest test be accompanied by an 'explicit, non-exhaustive list of matters that must be considered and documented' when applying the necessity and proportionality requirements, including:
the availability and effectiveness of other investigative methods;
the nature and gravity of the federally relevant criminal activity;
the value of the information sought to be obtained from the enlivenment of examination powers; and
whether there is a reasonable possibility, based on the information known at the time the determination is proposed to be made, that any of the following persons may be subject to compulsory examination under a special operation or investigation established under the determination (if made):
persons who are charged with offences, or in relation to whom charges are imminent (noting that examination powers would expressly abrogate self-incrimination privilege vested in such persons);
vulnerable persons, including minors (of any age) and persons with disabilities; and
persons who are not personally suspected of engaging in or facilitating the commission of the relevant offence or offences, but may hold relevant information.
2.18
While acknowledging that the ACIC's work requires secrecy and accountability standards that differ from other government areas, the ANU LRSJ Research Hub argued that public confidence in the legality, effectiveness and efficiency of the ACIC and the Board's work must be maintained. To accomplish this, it proposed that that the term 'public interest' be substantiated by amending the ACC Act to include a 'non-exhaustive list of public interest matters' that the Board may refer to when making a determination.
2.19
Ultimately, the ANU LRSJ Research Hub recommended that subsection 7C(4A) include four public interest matters for the Board's consideration when making a determination to authorise a special operation/investigation, including:
national security including in the prevention and detection of crime; and
freedom of the media to investigate, inform and comment on matters of public concern and importance.
2.20
However, Mr Phelan expressed concern regarding the proposal for the ACC Act to include criteria for the public interest test:
Any list, by its very construction, is going to be exhaustive in the eyes of the court. All it would do is limit the ability of the board to be able to make determinations in specific circumstances. It would not give them the ability to take into consideration arguably wider considerations that are in the public interest. If they took into consideration those things inside an exhaustive list, it may open up an avenue for appeal and therefore hamstring the organisation.
2.21
The ACIC Board argued that the public interest test allows it to consider a wide range of matters, limited only by the subject matter, scope and purpose of the ACC Act. Likewise, Mr Phelan stated that the previous threshold test was 'rather narrow', and that the Board can now take a wider range of matters into consideration, and give weight to the use of highly intrusive powers by the ACIC.
2.22
Moreover, the ACIC Board noted that the reference within the public interest test to the 'collective experience of the Board' directs attention to the qualifications and experience of Board members, which each voting member will draw on when considering what is in the public interest.
2.23
According to Commissioner Reece Kershaw, Chair of the ACIC Board, the composition of the Board is well-balanced and the diversity of members often leads to different points of view on a range of matters. For example, he noted that the Chair of the Australian Securities and Investments Commission and the CEO of the Australian Transaction Reports and Analysis Centre often provide different viewpoints on the threats they are seeing in the changing criminal environment.
Independent oversight of the Board
2.24
Evidence to the inquiry suggested that there is a lack of independent oversight of the Board's determination process. The Law Council and the ANU LRSJ Research Hub argued that additional independent oversight is needed to strengthen the ACC Act and instil confidence in the Board's decision-making process.
2.25
Although the Board's decisions on determinations are subject to judicial review, the Law Council noted that legal challenges are dependent on an individual's personal circumstances, including their financial resources. In addition, it noted that judicial reviews only consider the 'particular factual and legal issue in dispute', whereas independent oversight focuses on the assessment of the 'legality and propriety of [an] agency's overarching decision-making practices, policies and approaches, as they are deployed in relation to multiple proposed determinations'.
2.26
During the public hearing, Mr Game emphasised that the committee has an important role in scrutinising the Board's decisions made under section 7C of the ACC Act. He argued that due to the ambiguity of the provisions, decisions are 'well-nigh impossible to review by ordinary processes of judicial review', and therefore, scrutiny of the operation of the provisions falls to parliamentary committees.
2.27
Furthermore, the Law Council noted that the Board's decision to issue determinations will not be covered by the Intelligence Oversight and Other Legislation Amendment (Integrity Measures) Bill 2020. They reported that the bill extends the Inspector-General of Intelligence and Security's oversight of the ACIC's intelligence functions under the ACC Act, but the Board's actions are excluded.
2.28
The ANU LRSJ Research Hub recommended that the Inter-Governmental Committee (IGC) (outlined in Chapter 1) provide further oversight of the Board. It noted that the IGC currently monitors the ACIC's role under the ACC Act, and this role could be extended to provide oversight of special operation and investigation determination decisions. The ANU LRSJ Research Hub explained that 'this proposal balances secrecy whilst instilling confidence as it ensures determinations are subject to independent review'. It also suggested that the wording of subsection 7C(4) change from 'may' to 'must', to provide 'a more detailed record of why Board decisions were made [thus] allowing for review'.
2.29
Mr Phelan noted that independent oversight of the Board exists in the form of this committee, the IGC and the judicial system. He observed that the committee has a rather large remit in examining and reviewing the decisions that are made by the ACIC, and the IGC has a statutory role in overseeing the Board. Commissioner Kershaw pointed out that the IGC has the authority to revoke a determination.
2.30
Mr Phelan told the committee that he was doubtful that any further independent oversight of the Board's decisions would offer extra value. He emphasised that thus far, court challenges have scrutinised the legality of determinations and the construction of the ACC Act, not the decisions of the Board. In addition, Mr Phelan expressed that further oversight of the Board's decisions and determinations will not stop people from litigating the ACIC, particularly when challenges go to the ability of the Parliament to even make the law in question.
2.31
Commissioner Kershaw and Mr Phelan assured the committee that the Board takes authorising a special operation/investigation by determination very seriously. Mr Phelan advised that the 'decisions of the Board go through an extremely robust process' and there is a lot of individual scrutiny by Board members who are highly experienced.
2.32
For clarification, Mr Phelan advised of the internal process for proposing a determination. He explained that the Board advises the ACIC on the national criminal intelligence priorities in accordance with the ACC Act, which provides imprimatur for the ACIC to identify intelligence gaps, conduct analysis and undertake other tasks. If an intelligence or information gap is identified, the ACIC considers if it could be addressed through the use of coercive powers. The ACIC then works with an internal government committee which is comprised of state and territory representatives, and the ACIC CEO, to develop a briefing pack that is provided to the Board, which then decides if a determination should be considered. The ACIC continues to report to the Board annually on the effectiveness of approved determinations under a review process.
2.33
In addition, Mr Phelan advised that the ACIC seeks internal and external legal advice when putting recommendations to the Board regarding determinations.
Retrospective validation provisions of the SOSI Act
2.34
As discussed in Chapter 1, items 55 and 56 of Schedule 1 of the SOSI Act retrospectively validated:
any Board determinations made, or purported to be made, authorising a special operation/investigation, that would be invalid or ineffective because it did not satisfy the requirements of the ACC Act; and
any action by a person in connection with a special operation/investigation, in either performing a function, or the exercise of any power, pursuant to the ACC Act, which would otherwise be invalid or ineffective because no investigation or intelligence operation was being undertaken at that time.
2.35
The Law Council and the ANU LRSJ Research Hub expressed concern about the retrospective validation provisions, describing them as being inconsistent with the rule of law given they validate unlawful action.
2.36
The ANU LRSJ Research Hub claimed that the effect of the retrospective provisions in the SOSI Act validates unlawful conduct. It argued that retrospectively validating previous breaches of the law set a dangerous precedent for government accountability and 'is an unjustified encroachment on citizens' rights and freedoms especially given the coercive powers that can be utilised under the SOSI Act'. Consequently, the ANU LRSJ Research Hub recommended that the retrospective validation of determinations be repealed from the ACC Act, and determinations be re-examined in accordance with the current procedure for authorising special operations/investigations.
2.37
Similarly, the Law Council stated that the provisions to retrospectively validate all determinations, and actions taken under those determinations, were not 'merely technical in nature and have profound consequences for the rule of law'. They advised that the provisions appear to 'make lawful actions of the state, in the context of criminal investigative powers which override fundamental protections against self-incrimination, which were unlawful at the time they were carried out' as they failed to comply with the ACC Act.
2.38
Furthermore, the Law Council stated that there is a lack of meaningful insight or knowledge available about all the affected determinations and associated actions that have been retrospectively validated by the SOSI Act. Mr Game told the committee that when the SOSI Act passed, 'it wasn't known what was being sought to be validated. It might have been quite a trivial breach or it might have been an egregious one; we don't know.'
2.39
In light of this, the Law Council recommended that the committee conduct an audit of the application of retrospective validation provisions. It advised the committee that it is important that an audit shows the number and nature of the determinations that were validated retrospectively, and importantly, the acts done in relation to the determinations.
2.40
The ACIC's submission outlined that the SOSI Act amendments were required to confirm the validity of existing special operation and investigation determinations to ensure that 'the ACIC could continue to effectively fulfil its statutory functions'. It advised that before the SOSI Act passed, the manner in which the Board had authorised special operations and investigations had been conducted in a similar way for more than a decade. The Board's process had withstood many court challenges and had been endorsed by the Full Federal Court on several occasions.
2.41
However, challenges to the use of the ACIC's coercive powers during CXXXVIII v Commonwealth of Australia in the High Court in 2019, highlighted 'the need to clearly define, beyond any doubt', the Board's process for authorising special operations/investigations which allow the use of the ACIC's 'unique examination capabilities to target a specific area of serious and organised criminal activity impacting Australia'. The ACIC advised that if court challenges had been successful, it could have resulted in several 'serious and direct consequences for the ACIC, with effects felt in the wider law enforcement community'.
2.42
Regarding an audit of effected determinations, Mr Phelan advised that there is no requirement to undertake an audit as none of the previous determinations have been invalidated by the court. However, all the previous determinations and summonses were revoked and new determinations and summonses were issued.
Importance and effectiveness of determinations and coercive powers
2.43
The committee received evidence from the ACIC and the ACIC Board on the importance of the Board's ability to authorise, by determination, special operations/investigations, and, at a general level, the impact of those determinations.
2.44
The ACIC advised that its coercive powers are vital to investigate and disrupt organised crime. It stated that examination powers and notices to produce are 'most fruitful at generating high-level strategic insights that provide the ACIC and its partners with break-through understandings of criminal networks, methodologies, planning and motivations'.
2.45
Likewise, the ACIC Board noted that the ACIC's examination powers and notices to produce are pivotal to 'obtaining high-level, strategic intelligence insights to collect, correlate, analyse and disseminate criminal information and intelligence to our national and international partners.'
2.46
Mr Phelan told the committee that special operations and investigations have provided the ACIC the use of coercive powers, such as examinations and search warrants, which have:
…proved invaluable in obtaining information and intelligence in relation to a large number of drug importations, the assistance in developing human sources, our work with encrypted communications and, certainly, more recently, our work following Operation Ironside.
2.47
Mr Phelan advised that the ACIC would be willing to provide the committee with a confidential briefing on what it has achieved under each of the special operations and investigations, including operational results.
2.48
Commissioner Kershaw recognised the 'significant operational benefits to investigations through collaborations and joint activities with the ACIC'. He noted that the Australian Federal Police and state and territory law enforcement partners:
…rely on the ACIC's ability to exercise its extraordinary powers to generate important intelligence insights and, where the AFP has encountered sophisticated and serious criminal groups, the intelligence collection powers of the ACIC have proven vital.
Committee view
2.49
The committee heard evidence that suggested the SOSI Act has diluted the Board's threshold test for authorising a special operation/investigation and has broadened the circumstances in which coercive powers may be exercised. In addition, some inquiry participants suggested that the term 'public interest' requires substantiation and additional independent oversight of the Board is needed.
2.50
The committee acknowledges that submitters and witnesses were not questioning the need for the ACIC's coercive powers or the determinations of the Board, but rather the need for section 7C of the ACC Act to contain a defined framework available for scrutiny.
2.51
The committee is not convinced that the public interest test should be further defined through legislated criteria. The committee accepts that the Board considers a wide range of public interest matters when making a determination, and its ability to continue doing so could be adversely affected by any list of criteria to be taken into account. The committee agrees that the Board consists of highly experienced individuals with profound expertise in countering serious and organised crime. The committee is confident the Board is well-placed to make a public interest assessment to authorise special operations and investigations.
2.52
The committee considers it is important that an appropriate balance is maintained between the need for intelligence on organised crime activity and the rights of an individual compelled to provide information. The committee notes the advice from the ACIC that coercive powers are used primarily against those at the high end of criminality, who are litigious and well-resourced. The committee appreciates that the ACIC's coercive powers are used very discerningly, and that review avenues are available.
2.53
The committee notes the concerns regarding the retrospective validation of previous special operations and special investigations determinations. Nevertheless, the committee appreciates this was necessary to confirm the legal soundness of determinations beyond question and that the court has not invalidated any determinations or Board decisions relating to determinations.
2.54
When considering the SOSI Act amendments, it is important to bear in mind that the ACIC's focus is on disrupting serious and organised crime. The committee understands that it is extremely difficult to target criminality in a constantly evolving and complex criminal environment, where crime groups are highly resilient to and aware of traditional policing methods. The Board's authorisation of special operations and special investigations is a vital tool in discovering and understanding serious and organised crime and responding to criminal threats.
2.55
In response to claims that the Board's decision-making process does not have adequate oversight, the committee notes that it itself has a role in relation to this oversight of the Board's determinations. The committee believes there is value in receiving further information from the ACIC and the ACIC Board regarding the determination decision process, including how the public interest test is applied as part of this process. The committee therefore intends to seek further information from the ACIC and the ACIC Board on this matter, and notes that it is open to the committee to seek both regular written advice or, as appropriate and necessary, private briefings. Consistent with section 7 of the Parliamentary Joint Committee on Law Enforcement Act 2010 (PJCLE Act), the committee can, if it sees fit, also report to the Parliament on the 'any matter appertaining to the [ACIC] or connected with the performance of its functions'; this could, of course, include the question of the ACIC Board's determinations in relation to authorising special investigations and special operations.
2.56
The committee appreciates the SOSI Act changes were vital for safeguarding the ACIC's ability to fulfil its statutory functions and assist in ensuring the safety of Australia. However, the critical question before this committee is whether the SOSI Act is operating effectively and if amendments are achieving their aim so that the ACIC can continue to fulfil its role as the national criminal intelligence agency.
2.57
On the evidence before it, the committee considers that the SOSI Act has achieved its aim of enabling the ACIC to continue to fulfil its statutory obligations without interruption. In particular, the committee considers it appropriate to assess the effectiveness of the SOSI Act together with what the legislation is achieving in practice—that is, the results produced by the ACIC's operations and investigations and the positive impact it has on community safety and crime reduction. The committee was reassured by the high-level, general advice from the ACIC regarding the importance of evidence obtained through its exercise of coercive powers in tackling serious and organised crime. The ACIC offered to provide more detail on these outcomes to the committee in due course and, as appropriate, in camera. The committee appreciates this offer, and notes that it will continue its inquiries in this area as part of its ongoing oversight responsibilities in relation to the ACIC.
2.58
Finally, the committee considers it important that it retains oversight of all aspects of the ACIC's functions and work related to the SOSI Act going forward, consistent with the committee's existing statutory oversight functions as set out in section 7 of the PJCLE Act.
Mr Julian Simmonds MP
Chair