National Integrity Commission Bill 2013 Bills

I rise to speak on this private members bill from the Greens, which I notice has been before this place on a couple of occasions previously and has been brought up again here. Judging by the fact that more than half of the speech by the leader of the Greens was around the current controversy about how members of parliament use the resources that are given to them to fulfil their jobs, clearly there is a fair bit of political expediency in them bringing this forward again. However, I will not address that but will look more broadly at the concept of a federal ICAC and will articulate some of the structures that are in place federally that have meant that the federal government and its departments have not suffered some of the same issues that we have seen in some of the state jurisdictions that have been mentioned. I will also talk a little bit about the efficacy of some of the state ICAC bodies, some of the controversies around them and some of the principles that underpin effective management of risk. At the end of the day, that is what we are talking about here: we are talking about the risk of corruption, which involves individuals seeking to make personal gain or to change outcomes in contravention of expectations, guidelines or laws.

From the Commonwealth’s perspective, this government—in fact, governments of both persuasions—have over many years put in place measures that demonstrate a zero tolerance approach to corruption. Certainly the coalition is committed to stamping out corruption in all its forms. Australia traditionally has been recognised as being in the top 10 nations in terms of transparency and lack of corruption. And whilst the leader of the Greens mentioned that Australia had slipped outside of the top 10, he did not mention the difference in terms of scores. I think generally we were getting about 81 points, and we got about 80, which is a very small change in the assessment—just a couple of places in a list of 175. It is not as though Australia is taking a nosedive and is on a path indicating that we have tremendous problems. We sit very comfortably with comparative nations, such as the UK and the US, with which we would expect to be on par in terms of the transparency and efficacy of our systems. Whilst it is important that we are cognisant of how other people see us and how we are rated, the way it was portrayed indicated a far worse situation than is actually the case.

The Australian government, at a federal level, has a multi-agency approach to combatting corruption, looking at ways to enable people to expose information. At the end of the day, even the state based ICACs can act only when information is provided to them. That will generally occur in one of two ways. Either somebody will provide the information, having seen something happening that is wrong and contacting a government official or the media or in some way providing that information, or the government will find the information itself through its own fraud control processes, which is why we have audit offices, from a whole-of-government perspective, and why individual departments have internal audits and investigatory powers to make sure we find out on a routine basis how taxpayers’ money is spent and the basis of decisions made.

The element that also comes into the federal government’s approach is one of risk mitigation. That is not only about planning, in terms of putting in the provisions for audit and the provisions for whistleblower schemes, but also, importantly, a lot of emphasis is placed on training staff to be aware of fraud and corruption, to the point where—certainly in my experience, having spent over 20 years in the Defence department—there is mandatory training, not only when you first join the organisation but on a recurrent basis, about what kind of conduct is fraudulent and what kind of conduct is ethical. That is the basis for shaping culture, not only the actions of individuals but also a culture whereby people will recognise fraud. With the mechanisms in place to allow them to report, we will see outcomes whereby they are held to account if fraudulent or corrupt behaviour has occurred.

So, we also have various oversight bodies. Again, the leader of the Greens said he was concerned about our law enforcement agencies. The Australian Commission for Law Enforcement Integrity is responsible for preventing, detecting and investigating serious issues of corruption in federal law enforcement agencies, so we have actually already established bodies whose role it is to have oversight of our law enforcement agencies to check that their conduct is ethical, even those that are more secretive—groups like ASIO and ASIS. One of the roles I am privileged to hold here in the parliament is being a member of the Parliamentary Joint Committee on Intelligence and Security. That committee has an oversight function for agencies such as ASIO and ASIS. But, importantly, we also interact and have regular briefings with IGIS, the Inspector-General of Intelligence and Security. The role of IGIS is to have unfettered access, even to all the things that are classified and secure, so that there is an independent watchdog that is watching over how those agencies operate, from their conduct of operations through to the way they conduct business. One of the roles of the committee is to further look at the agencies’ expenditure and to query them on decisions they have made about how that works. So, even with our most secretive agencies, the federal government has systems in place whereby we have watchdogs at a very high policy level for the parliament, moving down to people who have very detailed access to the organisation.

More broadly, ANAO—the audit office—also conducts audits. The way they go about that and the fact that they interact with so many people at the working level—they look at decision trains and understand who was involved—means there is ample opportunity for people who have concerns about how decisions are made and why they were made to flag those concerns to people who are asking probing questions about the process so they can identify whether something has gone wrong with that.

In July last year the government also established the Fraud and Anti-Corruption Centre, located in the Australian Federal Police headquarters. Alongside the Ombudsman, alongside ANAO doing their audit and alongside departments doing their internal audits, this centre brings together the Australian Taxation Office, the Australian Securities and Investments Commission, the Australian Crime Commission, the Department of Human Services, the Department of Foreign Affairs and Trade and the Department of Immigration and Border Protection to assess, prioritise and respond to serious fraud and corruption measures.

Again, this government’s approach is to say that we need to plan to educate people and to put in place reporting measures where people can whistle-blow or report. We need to put in place measures for investigating and making findings. Importantly, this group will maintain a coordinated specialist cell that will collect, analyse and disseminate data from Commonwealth agencies. By engaging with local intelligence initiatives and working with financial intelligence agencies, they can assess, prioritise and respond to those fraud and corruption matters. The ability to have that data means that they can mine that data to expose things that do not look right. That is the starting point to provide evidence of the fact that some corrupt behaviour or fraud has occurred.

The government is committed to tackling corruption in all forms. That is why we have instituted things like the royal commission into corruption within the union movement. We have seen many examples come to light through that. One of the reasons we have had that external body is that there have not been the internal controls over those movements, so we have seen corrupt behaviour come out. There have been some quite gross examples of corruption within that area. The reason is that there is not that internal control. That is the difference with the federal government—that there are the internal controls over what we do.

Defence, as I said, is my background, and I think it is instructive to look at how the Department of Defence handles this. Having sat through many Senate estimates hearings and having been on inquiries of the Committees on Foreign Affairs Defence and Trade into Defence’s conduct, I know that there have been criticisms in the past of Defence’s internal investigatory service. But one of the things that Defence does do, like other departments, is that it has an evolving process of improving fraud control. Particularly as we start getting more whole-of-government processes and integration, we see those measures lifting in their efficacy. In terms of fraud control, Defence now consults with the Australian National Audit Office and, in consultation, they have strengthened their control framework for fraud to align with the Commonwealth’s fraud control guidelines. At the beginning of 2013 Defence conducted a fairly robust internal and external assessment of the strategic, operational and tactical level fraud risks within the department. That then developed into their Defence Fraud Control Plan, which looked at the measures that Defence would take to prevent, detect and then respond to fraud.

If we step through that, I think the prevention side is important. The prevention side means that there is ethics and fraud awareness training that people need to do, as I said, on an initial basis and then on a recurrent basis so that they know what their own conduct should be. That is the personal responsibility element. But it also sets a benchmark that they can use to evaluate aberrant behaviour that they see around them. There is also the internal auditing. Defence has its own internal audit branch. Its role is to provide assurance to the secretary and the CDF that the financial and operational controls that have been put in place to manage Defence’s major risks are operating in an efficient and effective manner. That audit branch provides an important function reporting up, but also working with managers at different levels to make sure that they have their own management and reporting systems in place. There is an audit work program that is developed with the various group heads and service chiefs to make sure that there is visibility and transparency across the risks over the organisation. In the last Defence annual report, you can see that a total of 32 audit reports were done internally within Defence in addition to six Australian National Audit Office reports. So we see that at a federal level we have these structures in place to give great transparency. Resulting from that there were some 333 fraud investigations registered in the last Defence annual report. A total of 358 investigations were completed—some of those had come over from previous years—and about 19 per cent of those completed investigations resulted in criminal, disciplinary or administrative action. That is just one example from the Department of Defence where we see those measures in place.

Importantly, from a whole-of-government perspective, one of the things that is apparent, as you can see from looking at the ICACs in state jurisdictions, is that they need a starting point. That starting point is often somebody who has witnessed behaviour that is not appropriate or ethical and has raised a flag. So from January last year all current and former public officials who wish to speak up about wrongdoing or maladministration in the Commonwealth public sector can do so under the Public Interest Disclosure Act. This legislation replaces all of the previous whistleblower legislation and provides a transparent process within agencies and government departments for investigating complaints. Under this act, a public official includes all current or former people who have worked for the Commonwealth. In the case of Defence, that would be the Australian Defence Force members, Australian Public Service employees, contracted service providers and statutory officers. Anything that they provide by way of disclosure alleging wrongdoing or maladministration will be called a public interest disclosure. The aim of this act is to promote integrity and accountability within the Commonwealth public sector. It encourages public officials to disclose wrongdoing and maladministration. Importantly, it provides protection from any adverse consequences of making a disclosure and it ensures that disclosures are properly managed and investigated by agencies.

Those conducts are conduct by an agency or by a public official that contravenes a law of the Commonwealth or of a state or territory, relates to corruption, is an abuse of public trust or office or is a deception relating to scientific research; or decisions that result in wastage of public money or property or unreasonably result in danger or increase the risk of danger to the health or safety of people. So it is quite a broad remit there. But coming back to that principle, alongside the audit programs that we have put in place, the Commonwealth has put in place a framework that encourages, enables and protects people who wish to highlight that unethical conduct has occurred. These protections are for people who make or intend to make a public interest disclosure. This protects their identity and provides immunity from criminal or civil liability, including disciplinary action, for making that disclosure.

Whilst the concern about corruption is valid, you can look at the state jurisdictions and see that there have been mixed results in terms of the efficacy of their measures. We saw the controversy in New South Wales just recently where the ICAC took measures that the High Court has struck down, saying they did not have jurisdiction. We saw people who have been investigated and whose careers have been put on hold, or ruined in some cases, yet there has been no definitive finding of guilt. So there have been mixed results in those jurisdictions. But the Commonwealth is saying, ‘We’re going to take the key element, which is bringing to light misconduct. We’re going to prevent this misconduct where we can through training and culture. But we recognise human behaviour is what it is, so we’ll put in place the audit processes, we’ll put in place the processes whereby people can report without fear or favour, and then we will take action where required.’

The Leader of the Greens mentioned corruption overseas. In the media just recently we have seen that Australia has launched an investigation into foreign bribery allegations against an Australian construction company. In a range of fields the federal government takes action through existing, improving and evolving measures to make sure that we have transparency. In this way Australian citizens can have confidence that the decision-making and administrative processes of the federal government have suitable checks and balances to make sure that its behaviour and decision making is fair, equitable and transparent.