The Centre for Public Integrity: The National Anti-Corruption Commission Bill 2022

Will Australia finally get a fit for purpose national integrity commission?

Briefing paper September 2022

The Government’s keenly-awaited legislation to establish a national integrity commission has been presented, in the form of the National Anti-Corruption Commission Bill 2022 (the Bill).

The Bill proposes a National Anti-Corruption Commission which will be fit for purpose in almost all material respects, insofar as it provides for:

• a broad definition of corrupt conduct, not requiring the commission of criminal offences

• a scope which captures parliamentarians, their staff, statutory office holders, employees of government entities, and contractors

• retrospective application

• strong investigative powers, including coercive powers and surveillance powers

• investigations to be commenced on the basis of referrals, public complaints

  (including anonymous complaints) and the Commission’s own motion

• no evidential threshold to be satisfied before an investigation can commence

• the power to make findings of fact and findings of corrupt conduct

• the power to report publicly

• oversight by an Inspector and cross-party parliamentary committee

  However, the Bill in its current form requires further refinement if the National Anti- Corruption Commission is to be fit for purpose. In particular, it is substantially deficient in three key areas:

• Public hearings can only be held where the Commissioner is satisfied that ‘exceptional circumstances’ exist and it is in the public interest

• The Commission’s jurisdiction will not capture corrupt conduct by third parties unless there is wrongdoing by a relevant public official.

• The cross-party parliamentary committee is not sufficiently independent of the executive, and the provisions regarding its budget recommendation functions are weak

  The Centre for Public Integrity welcomes the release of the National Anti-Corruption Commission Bill 2022 and urges further refinement to ensure that the National Anti- Corruption Commission is the powerful, independent integrity commission that Australia deserves and wants.

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Jurisdiction

Who is captured?

The section 8 definition of ‘corrupt conduct’ refers to various kinds of conduct.

Conduct by ‘any person’ is captured where that conduct adversely affects, or could adversely affect, either directly or indirectly, the honest or impartial exercise of a public official’s powers as a public official, or performance of their functions or duties as a public official (s 8(1)).

Otherwise, conduct is captured where it is conduct by a ‘public official’ (or, in the case of the misuse of information or documents acquired in a person’s capacity as a public official, ‘former public official’). Under s 10 of the Bill, the term ‘public official’ captures parliamentarians, their staff, staff members of Commonwealth agencies, and staff members of the NACC (as well as their deputies and delegates). Section 12 contains a broad definition of what constitutes a ‘staff member’ of a Commonwealth agency, encompassing parliamentary staffers, statutory officeholders, employees of government entities and contractors.

Definition of corrupt conduct

The Bill proposes a broad definition of corrupt conduct. It will capture any conduct of any person that adversely affects, or could adversely affect, either directly or indirectly

• -  the honest or impartial exercise of any public official’s powers; or

• -  the honest or impartial performance of any public official’s functions or duties ( s

  8(1)(a))

  The Commission’s jurisdiction will capture conduct of a public official that constitutes or involves a breach of public trust (s 8(1)(b); in addition, it will capture conduct which constitutes, involves or is engaged in for the purpose of abuse of that person’s office as a public official (s 8 (1)(c)), or for the purpose of corruption of any other kind (s 8(1)(e)).

  The misuse of information or documents that a person acquires in their capacity as a public official is captured pursuant to s 8(1)(d).

  Section 17(c) of the Bill makes clear that the Commissioner has the function of investigating only corruption issues ‘that could involve corrupt conduct that is serious or systemic’.

  However, the Bill does not propose to capture corrupt conduct by third parties where there is no wrongdoing by a relevant public official: this is a significant deficiency of the legislation and, in this respect, would leave the National Anti-Corruption Commission’s jurisdiction inferior to those of all State and Territory commissions other than Western Australia and Tasmania.

The second reading speech to the Bill makes clear that ‘[o]ther conduct that could adversely affect public administration, such as external fraud, will continue to be dealt with by existing integrity agencies’, and provides the Australian Federal Police as an example of such an agency.

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The difficulty with this approach is evident in the recent report by the Hon Tony Fitzgerald AC KC and the Hon Alan Wilson KC into the Queensland Crime and Corruption Commission. In considering the risk of narrowing corruption investigations via a ‘law enforcement’ approach, the authors point out that ‘a corruption investigation might not unearth sufficient evidence of criminality but may reveal that systemic or organisational changes are required to prevent any recurrence’.1 Citing Gabriel Kunis, they conclude that ‘There is a risk that a law enforcement approach to corruption can manifest as an 'orientation towards individual criminal acts and actors' which 'may cause (an anti- corruption agency) to miss the forest for the trees, or bias it towards cases with clear wrongdoing and identifiable wrongdoers.2

Retrospectivity

Section 8(4) makes clear that the Commission will have the power to examine matters which occurred prior to its establishment.

The power to commence an investigation

Referrals and complaints

The Bill ensures that the Commission will be able to deal with corruption issues referred by other agencies, as issues it becomes aware of ‘in any other way’: s 40. This means that it will be able to act on the basis of whistleblower reports and public complaints, including anonymous complaints.

While the Explanatory Memorandum is clear that this provision is intended to empower the Commission to also act on its own motion, it is unusual for the legislation not to include a specific own motion power. Insofar as this is a critically important power, it would be preferable to include a separate own motion provision.

Investigative powers

Hearings

Pursuant to s 62, the Commissioner may hold hearings for the purpose of corruption investigations. However, hearings must be held in private unless the Commissioner is satisfied that ‘exceptional circumstances’ justify holding the hearing in public, and it is in the public interest to do so (s 73).

1 Commission of Inquiry relating to the Crime and Corruption Commission, Report by by the Hon Tony Fitzgerald AC KC and the Hon Alan Wilson KC, 9 August 2022 p 85.
2 Ibid.

While this important area of corruption prevention (impaired confidence in the integrity

of public administration via serious third party fraud or contrivance) is left to the police, it

should also be noted that the police do not have the powers of an anti-corruption

commission

The ‘exceptional circumstances’ requirement is a serious backdown on Labor’s much publicised set of design features. It also involves a specious circularity: after the commission has carefully considered a range of factors, including whether a public

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hearing might unfairly damage a person’s reputation, and determined that it is in the public interest to hold a public hearing, it is met by a further hurdle.

Australia's strongest watchdogs are subject to no such requirement, and out of all Australian States and Territories only the Victorian Independent Broad-based Anti- Corruption Commission needs to meet this threshold before proceeding to a public hearing.

What constitutes ‘exceptional circumstances’ was considered by the
Victorian Court of Appeal in R and M v Independent Broad-based Anti-corruption Commissioner [2015] VSCA 271, with the Court holding that it requires circumstances that are ‘clearly unusual and distinctly out of the ordinary’. Determining whether such circumstances exist requires “both a qualitative distinction between the circumstances which might ordinarily be inquired of by the respondent, and, in addition, an assessment that those circumstances might be reasonably rare”.

The inclusion of an 'exceptional circumstances' requirement would
expose the Commission's decision to hold a public hearing to legal challenge. Such challenges can be exploited by well-resourced litigants to both delay
Commission investigations and obtain knowledge of the material that the
Commission has against them, allowing them to potentially seek to interfere with evidence. The spectre of these risks may mean that the Commission is less likely to hold a public hearing, even in cases where the threshold would be met.

Other investigative powers

Sections 58 and 63 empower the Commission to compel witnesses and the production of documents and things, where the Commission has ‘reasonable grounds to suspect’ that a person has information, documents or things, relevant to a corruption investigation.

Pursuant to s 117, public premises may be searched without a warrant: this is a power common to Commonwealth oversight and investigative agencies including the Australian National Audit Office, the Inspector General of Intelligence and Security, the Public Service Commissioner and the Merit Protection Commissioner.

Surveillance powers will also be available to the Commission, in accordance with amendments to be made to the Surveillance Devices Act 2004 (Cth) by the National Anti- Corruption Commission (Consequential and Transitional Provisions) Bill 2022.

Power to refer to agencies including the Office of the Director of Public Prosecutions

Section 41 allows the Commission to deal with a corruption issue in any one or more of a specified set of ways, including by referring the issue to a Commonwealth agency, or a State or Territory government entity, for investigation.

Findings and reporting

Under the proposed legislation, the Commission will be able to report their findings and opinions, including findings of corrupt conduct in relation to corruption investigations (s 149). In cases where at least one public hearing was held in the course of the

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investigation, the reports will be automatically made public (via tabling in Parliament: s 155).

While s 155 requires that the Minister or Prime Minister table the report within 15 sitting days after its receipt, there is no mechanism to ensure that reports are available to parliamentarians and members of the public in cases when the Parliament is not sitting. The inclusion of such a mechanism – for example, requiring a report to be provided to the Clerk and then distributed and placed on the Commission website – when the Parliament is not sitting is an important transparency measure.

In cases where no public hearings have been held, the Commission will be able to publish a corruption investigation report if publication is in the public interest, and any person or agency who is the subject of an adverse finding is given a ‘reasonable opportunity’ to respond (ss 156-157). State experience has taught us that rather than requiring that an undefined period of time be allowed, it would be preferable to specify a set minimum time (for example 3 months), allowing the Commission to provide a longer time if it considers it appropriate to do so (three months or such longer time as determined by the Commissioner).

The interaction between the limitation upon the use of public hearings, and these provisions, is that fewer reports will be made publicly available automatically and without delay.

Protections and oversight

Parliamentary Joint Committee on the National Anti-Corruption Commission

The Bill proposes the establishment of the Parliamentary Joint Committee on the National Anti-Corruption Commission (Division 1 of Part 10). While this Committee cannot consist of more than 50 per cent of Government members (s 172(3)), pursuant to s 173(1) the Chair must be a member of the Government. Insofar as s 173(5) provides that the Chair will have a casting vote if votes are equal, the requirement that the Chair be a Government member is a serious limitation upon the Committee’s independence. A preferable approach would be that taken in Victoria, in respect of the Pandemic Declaration Accountability and Oversight Committee: subsection 22(1A) of the Parliamentary Committees Act 2003 (Vic) provides that “The chairperson of the Pandemic Declaration Accountability and Oversight Committee must not be a member of a political party forming the Government”.

Pursuant to s 177(1)(g), the Committee’s functions will include reviewing the Commission’s budget and finances, and reporting accordingly to the Parliament. The Centre for Public Integrity believes that accountability institutions like the Commission should be funded via an Independent Funding Tribunal model. However in the absence of such a Tribunal the Bill must, at a minimum, require the Minister to table in the Parliament a statement of reasons for any deviation from a funding recommendation by the Committee. Any such requirement must specify a maximum number of days (not sitting days) within which tabling must occur.

Inspector

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Division 2 of Part 10 of the Bill also establishes an Inspector responsible for overseeing the operations of the Commission. While the Inspector is appointed by the Governor- General on the Minister’s recommendation, the appointment can be vetoed by the Parliamentary Joint Committee (s 185).

Procedural fairness

Procedural fairness is enshrined via s 157, which requires that the Commission allow subjects of proposed adverse findings an opportunity to respond before any report is published. The use of the qualifier “reasonable” means that any person who is the subject of such a finding has a right to appeal in respect of whether the opportunity provided was “reasonable”. Protection of procedural fairness is inarguably of utmost importance; it should not, however, be able to be used by well-resourced parties as a tactic to delay the release of Commission reports. For this reason, the Centre for Public Integrity supports the adoption of measures designed to impose a specific timeframe (for example, three months) within which subjects are required to respond, as long as the Commission retains discretion to extend that timeframe where appropriate.

Commissioner appointments

There is to be one National Anti-Corruption Commission Commissioner, and up to three Deputy Commissioners (ss 16, 18).

Under s 241, the Commissioner is to be appointed by the Governor-General on the advice of the Minister. The parliamentary Committee will, however, have veto power: s 241(1). Only persons who are retired judges (of a federal court, or a court of a State or Territory), or who have been enrolled for at least five years as a legal practitioner of a federal court or the Supreme Court of a State or Territory, are eligible for appointment as Commissioner (s 241(3)).

At least two of the maximum three Deputy Commissioners must also be retired judges (of a federal court, or a court of a State or Territory), or persons who have been enrolled for at least five years as a legal practitioner of a federal court or the Supreme Court of a State or Territory (s 242(4)). The other Deputy Commissioner, if one is appointed, can be appointed on the basis of the Minister being satisfied that the person has appropriate knowledge, qualifications and experience (s 242(3)). The parliamentary committee will be able to veto the appointment of a Deputy Commissioner (s 242(2)).

The process via which such significant appointments are made must be guaranteed to be transparent. The Centre for Public Integrity recommends that a robust process be legislated in order to promote public trust in the Commission’s work.

Provisions relating to journalists

Section 31 protects journalists and their employers from being required to do anything pursuant to the Act that would disclose or compromise an informant’s identity. However, Section 31(4) provides a search powers exception to this protection, stating that it ‘does not prevent an authorised officer from doing anything the authorised officer would otherwise be able to do in exercising powers under Part IAA of the Crimes Act 1914 and for the purposes of this Act’.

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While the inclusion of this provision means that even though the Act would not permit journalists and their employers to be compelled to do anything that might disclose or compromise an informant’s identity, on our present understanding it appears that officers of the NACC would be able to use the Commission’s search powers to seek to achieve those objectives. If this understanding is correct, it is important to note that sections 124(2A) and (2B) establish a public interest test in the case of search warrants involving journalists. However, pursuant to s 3C of the Crimes Act 1914 (Cth), such search warrants would be able to be issued by magistrates, or justices of the peace (or other persons

Legal professional privilege

Section 114(1)(b) appropriately abrogates legal professional privilege. However, pursuant to s 74(4) any evidence that would disclose legal advice or a communication protected by legal professional privilege must be given in private. This requirement will result in exploitation in order to disrupt Commission hearings, with the consequence that even those public hearings which are able to be held will be less effective. It will also keep secret information private.

Section 74 must be amended in order to give the Commissioner a discretion to hear such evidence in private, rather than impose a mandatory requirement.

Section 235 certifications

Pursuant to s 235, the Attorney-General has the power to certify that certain disclosures would be contrary to the public interest. Such a disclosure may be made where it would (amongst other things):

• -  prejudice the security, defence or international relations of Australia;

• -  involve the disclosure of communications between a Minister and a State or

  Territory Minister (or between State or Territory Ministers), and would prejudice Commonwealth and State or Territory relations (or relations between the States or Territories)

• -  involve the disclosure of Cabinet (or Cabinet committee) deliberations or decisions (s 235(3)).

  While the Attorney-General is required to give any such certificate to the Inspector (s 235(8)(b)), the Centre for Public Integrity recommends an additional number of protections in respect of information that is not certified as national-security information. First, it should also be required to be provided to the Chair of the Parliamentary Joint Committee on the National Anti-Corruption Commission. Secondly, in cases where the information affects a report’s conclusion, it should be made available on a confidential basis to the entire Committee. Thirdly, insofar as we advocate a pro-disclosure culture in respect of cabinet documents, we recommend that a s 235 disclosure certificate only be able to be made in respect of cabinet documents where those documents were created less than 30 days prior to the date of proposed certification.

employed in State or Territory court and who are authorised to issue search

warrants). In light of the power that it appears authorised officers will have to search for

documents that may reveal the identify of a journalist’s informant, any search warrants

relating to journalists must be required to be issued by a judge.

Statutory review mechanism

While we welcome the inclusion of a mandatory statutory review at s 278, the provisions establishing it are weak - both in respect of the provision relating to who must conduct the review, who can appoint those persons, and in respect of tabling. The Bill should make clear provision about the variety of persons qualified to undertake the review and require that they be appointed by the Parliament, not the Minister. It should mandate the minimum issues to be considered (for example, the Act’s provisions in respect of public hearings, its jurisdiction, inspector and parliamentary oversight, and emerging best practice), and it should require that the review report be tabled within a set number of days (not sitting days). Generally, a maximum period of seven days would be appropriate.

About The Centre for Public Integrity

The Centre for Public Integrity is an independent think tank dedicated to preventing corruption, protecting the integrity of our accountability institutions, and eliminating undue influence of money in politics in Australia. Board members of the Centre are the Hon Stephen Charles AO KC, the Hon Anthony Whealy KC, Professor George Williams AO, Professor Joo Cheong Tham, Geoffrey Watson SC and Professor Gabrielle Appleby. Former directors include the Hon Tony Fitzgerald AC KC and the Hon David Ipp AO KC.

More information at www.publicintegrity.org.au.