National Integrity Spotlight – May 2024

In this month’s edition of the National Integrity Spotlight, we consider the most recent updates from the NACC, consultation on the prevention of bribery of foreign public officials, and updates from various integrity bodies. 

NACC Update

Referral and Assessment Update

The National Anti-Corruption Commission (NACC) continues to provide regular updates on the number of referrals received, the assessment process, and investigations underway. 

Key data from 1 July 2023 through to 19 May 2024 suggests that: 

• 2,955 referrals were received; 
• 2,312 referrals were excluded at the triage stage of assessment as they did not involve a Commonwealth public official or did not raise a corruption issue; 
• 131 referrals are pending triage; 
• 283 referrals are currently under assessment, including 22 under preliminary investigation; 
• 295 referrals have been assessed; and 
• 21 new investigations have been commenced, including six which will be jointly investigated, and three further investigations have been referred to other agencies with oversight from the NACC. 

The NACC has also indicated that: 

• four matters are or have been before the courts, including two that have resulted in convictions, and one that has resulted in committal for trial;  
• two matters are under consideration by the Commonwealth Department of Public Prosecutions; 
• in one matter, the NACC has completed a final report with no corruption finding;  
• final reports are being prepared in relation to seven further matters with no prosecutions occurring; and 
• in seven further matters, there were no prosecutions and final reports will be prepared. 

Attorney-General’s Department commences consultation on adequate procedures guidance on preventing bribery of foreign public officials  

On 29 April 2024, the Commonwealth Attorney-General commenced consultation on draft guidance material relating to steps that corporations can take to prevent bribery of foreign public officials. The publication of guidance is a legislative requirement under the recently passed Crimes Legislation Amendment (Combatting Foreign Bribery) Act 2004 and the newly introduced offence of failure to prevent foreign bribery under section 70.5A of the Criminal Code Act 1995 (Cth). 

The new offence, which Gadens set out in the February 2024 edition of the National Integrity Spotlight, applies where an associate of a corporation “has committed bribery for the profit or gain of the corporation.” 

The draft guidance sets out considerations that organisations should have regard to in creating and implementing anti-bribery compliance programs, and contemplates that different obligations will apply to corporations on the basis of the scale, location, and risk profile of organisations. 

The consultation is open to the public, as well as organisations that face the risk of foreign bribery, until 9 June 2024. 

South Australia Independent Commission Against Corruption (SA ICAC) 

Rusby-Bar and Fuller matters  

On 1 May 2024, the SA ICAC released a public statement by Commissioner, Hon. Ann Vanstone KC, summarising the findings of the three reports by the Inspector of SA ICAC, Mr Philip Strickland SC, and the Inspector’s initial views. The three reports, which were tabled in Parliament on 30 April 2024, relate to Mr Strickland SC’s review of: 

• the investigation of former Department of Planning, Transport and Infrastructure officer, Mr Trent Rusby (the Rusby Investigation); 
• the investigation of Chief Superintendent Douglas Barr with respect to a South Australia Police recruitment drive known as Recruit 313 (the Barr Investigation); and 
• a complaint made by Mr Michael Fuller with respect to the way in which complaints made to various bodies were handled. 

In his report relating to the Rusby Investigation, the Inspector did not find any evidence of corruption, misconduct or maladministration by the former Commissioner or his staff, and noted that the investigation commenced in 2014, and that the matters were largely historical. While the Inspector criticised the former Commissioner’s decision to provide the Director of Public Prosecutions with a brief of evidence, notably including materials relating to other matters, the Commissioner rejected the criticism, noting that the Director of Public Prosecution has the discretion to accept or reject materials, the way in which evidence ought to be assessed, and whether matters should be prosecuted. 

In his report relating to the Barr Investigation, the Inspector stated that the investigation was appropriate and that, upon review, it could be determined that there was no evidence of bias, no unreasonable invasions of privacy, or any corruption, misconduct, or maladministration. These findings are in spite of negative public commentary about the handling of the Barr Investigation. 

Finally, in his report relating to the Fuller Complaint, the Inspector determined that no review of the matter has found any evidence of corruption, misconduct, or maladministration, despite the matters having been reviewed multiple times, including by a Parliamentary Committee. 

The Commissioner will fully consider all three final reports and any recommendations made before considering if a report to Parliament is appropriate. 

Lobbying and influence public forum  

On 9 May 2024, SA ICAC hosted a public forum on lobbying and corruption risks in South Australia. The expert panel was conducted by Jodeen Carney, Commissioner of Equal Opportunity SA, and comprised of the Honourable Christopher Pyne, Associate Professor Dr Yee-Fui Ng from Monash University, Deputy Commissioner David Wolf from the Independent Broad-based Anti-corruption Commission (IBAC), Executive Director Dr Catherine Williams from the Centre for Public Integrity, Mr Davi Washington from Solstice Media, and Board Member Mr Ian Horne from Tourism SA.  

In its panel discussion, SA ICAC examined integrity risks associated with lobbying and influencing activity in South Australian public administration, and the adequacy of the regulatory scheme implemented by the Lobbyists Act 2015 (SA).  

The Commissioner emphasised in her opening address that SA ICAC is interested in lobbying because the activity gives rise to a risk of corruption in public administration. Those seeking to influence the outcome of government decision making, whether administrative or regulatory decision making, might seek to leverage their personal connections or provide financial or political incentives to motivate decision makers to act in their favour as opposed to the public interest.  

Key matters addressed in the forum included: 

• that lobbying is necessary for a properly functioning democracy and promotes good government decision making informed by merit of the public interest; 
• it is important to mitigate lobbying integrity risks to ensure that everyone has an equal opportunity to influence government decision-making, rather than it being skewed to a sectional interest with privilege access; 
• lobbying poses serious risks of corruption that exist in the absence of transparency and accountability of the conduct of lobbyists and public officials; 
• the scheme should not be regulated in the way it currently is in South Australia because of the potential for actual and perceived conflicts of interest that arise with part of the executive overseeing the executive. An independent regulator with sufficient powers and resources to enforce compliance with the regime promotes accountability and transparency. 

A recording of the panel discussion is accessible here. 

New South Wales Independent Commissioner Against Corruption (NSW ICAC) 

ICAC Investigation: Corruption Uncovered in TfNSW and IWC Operations 

The New South Wales Independent Commission Against Corruption (ICAC) has uncovered a complex network of corruption involving former Inner West Council (IWC) senior project engineer, Tony Nguyen. ICAC’s investigation, known as Operation Hector, has revealed Nguyen’s involvement in awarding contracts exceeding $1 million to businesses with which he had undisclosed connections. Additionally, collusion between project managers at Downer EDI Works Pty Ltd and private contractors competing for Transport for NSW (TfNSW) projects has been uncovered, with Nguyen playing a central role. 

ICAC found that Nguyen’s path to corruption began during his time with the Glenfield Junction Alliance, where he manipulated tender processes for personal gain. Upon joining IWC, he engaged in collusive tendering schemes with undisclosed associates, disregarding procurement regulations amidst organizational upheaval following the council’s amalgamation. 

ICAC’s report highlights systemic vulnerabilities within TfNSW, including shortcomings in project oversight and staff awareness of corruption risks. These deficiencies provided fertile ground for individuals like Nguyen to exploit and perpetrate their illicit activities. 

The fallout from ICAC’s findings extends beyond Nguyen, implicating multiple individuals across TfNSW and Downer in fraudulent activities. ICAC found that the extent of corruption uncovered was substantial, from Nguyen’s clandestine partnerships to procurement irregularities facilitated by TfNSW officials. 

In response, ICAC has issued corruption prevention recommendations aimed at enhancing transparency and accountability within TfNSW and IWC. These measures include improved risk assessments, targeted awareness training, and the implementation of a debarment scheme to prevent misconduct by suppliers. 

Furthermore, ICAC is considering criminal charges against several implicated individuals, underscoring the seriousness of the offenses uncovered. The investigation, prompted by an anonymous complaint against Nguyen, underscores the importance of vigilance and reporting in combating corruption. 

The public inquiry, spanning over 25 days and featuring testimonies from 16 witnesses, concluded in November 2023. ICAC reported that this exhaustive process reflects its commitment to upholding the integrity of public institutions and holding perpetrators of corruption accountable. 

Operation Mantis – Investigation Unveiled: NSW ICAC Probes Canterbury-Bankstown Council Officials 

The NSW Independent Commission Against Corruption (ICAC) has announced a forthcoming public inquiry, scheduled to commence on 3 June 2024, as part of its ongoing investigation, known as Operation Mantis. This inquiry is set to scrutinize alleged misconduct involving former Canterbury-Bankstown Council employee Benjamin Webb, former council contractor Pietro Cossu, and potentially others. 

Central to the inquiry are allegations regarding the conduct of Mr Cossu and/or Mr Webb during the period spanning May 2020 to December 2022. Specifically, the ICAC seeks to ascertain whether these individuals improperly wielded their official powers by engaging the services of PMLV Invest & Const Pty Ltd (PMLV) for recruitment subcontractor tasks without transparently disclosing their financial stakes in PMLV or the financial gains they anticipated. Additionally, the ICAC will examine whether, from July 2020 to December 2022, Mr Cossu and/or Mr Webb manipulated their positions to favour General Works & Construction Pty Ltd (GWAC) in council contract awards. This aspect of the investigation probes potential efforts to influence contract allocations in favour of GWAC and explores the suspected utilization of PMLV for subcontracting purposes, possibly for personal gain or to benefit third parties. 

The overarching objective of the public inquiry is to gather pertinent evidence in line with the allegations outlined under section 13(2) of the Independent Commission Against Corruption Act 1988 (NSW). Commissioner Honorable Helen Murrell SC will preside over the inquiry proceedings, with Ms Georgia Huxley of Counsel serving as Counsel Assisting. 

The public inquiry will convene in early June and is scheduled to run for up to three weeks. 

Independent Broad-based Anti-corruption Commission (IBAC) 

Complaints about Victoria Police misconduct  

On 17 April 2024, the IBAC released the annual snapshot of its independent police oversight role. The snapshot highlights a significant increase in police misconduct complaints and notifications received by IBAC in 2023. 

During the 2023 calendar year, IBAC assessed a total of 4,317 allegations of Victoria Police misconduct and 1,914 complaints. This was in addition to 1,709 mandatory notifications from Victoria Police and 316 serious incident notifications. Mandatory notifications, which include potential Public Interest Disclosures, allegations of police misconduct, or suspected corrupt conduct, must be disclosed to IBAC by the Chief Commissioner of Police. Serious incident notifications refer to police conduct that resulted in death or serious injury. There was a 13% increase in mandatory notifications and a 19% increase in serious incident notifications from 2022.   

Throughout 2023, IBAC commenced 23 preliminary inquiries and investigations of Victoria Police, including seven ‘own motion’ investigations based on IBAC intelligence. Of these, 15 were finalised and addressed issues such as misuse of relationships of former officers, handling of family violence incidents, and improper conduct during a vehicle intercept. Two thematic reviews on Victoria Police were also finalised in 2023. These respectively concerned the use of oleoresin capsicum spray and incidents of family violence involving police personnel. As a result of its investigations, reviews, and inquiries, IBAC has made 19 new recommendations to Victoria Police.  

Tasmanian Integrity Commission (TIC) 

Lobbying reform  

The TIC has announced an intention to overhaul the state’s lobbying oversight system to enhance transparency and accountability. Lobbying has been regulated by the State Government Register of Lobbyists (Register) and the Lobbying Code of Conduct (Code of Conduct) since 2009. 

In 2022, administration of the Register and Code of Conduct shifted from the Department of Premier and Cabinet to the TIC, which prompted a review and reform initiative. The TIC’s Project Livingstone, which launched in 2021, included extensive consultation with the public and 28 submissions from various stakeholders to assess and improve the existing system.  

The proposed model was released in June 2023 for final consultation. 

The Tasmanian Government has focused on the development and implementation of user-friendly systems to support the input of key information by lobbyists into the Register and by public officials into a new ‘contact disclosure log’. Additionally, accessible and practical educative, training, and advisory materials will be developed and implemented for all stakeholders to ensure compliance and understanding of the new requirements. The TIC will also monitor compliance with the new systems to ensure their successful operation. 

Key themes from the consultation included enhancing entity and activity disclosures, addressing the risks of over-regulation, considering a ban on ‘dual hatting’, and potentially expanding the reform agenda to cover political donations and broader influence activities.  

The local government sector, not initially included, may be considered for future regulation.  

The TIC aims to finalise the new Code of Conduct by January 2025. In the interim, the current Register and Code of Conduct will be maintained and administered until the new Code is implemented. The TIC has indicated that the implementation may occur in stages. 

Western Australia Corruption and Crime Commission (WA CCC) 

CCC finds that the Department of Finance investigation into employee misconduct was inadequate 

On 15 May 2024, the WA CCC tabled a report entitled “Review of misconduct risks within Department of Finance: Lessons for all government authorities.”   

The WA CCC undertook a review of a Department of Finance (the Department) investigation into three findings of staff misconduct that involved alleged breaches of the Department’s policies and procedures relating to procurement processes, as well as the management conflicts of interest.  

The WA CCC found that, although the Department’s investigation made three findings of misconduct, the focus of the investigation was too narrow, and the resulting actions taken by the Department were inadequate. Specifically, the WA CCC found that the Department’s focus was limited to the individual employees when it should also have considered the wider system issues or risks of such misconduct occurring in the future.  

The WA CCC concluded that the Department had failed to identify and understand the wider system issues or broader agency risk. The WA CCC expressed concern that the Department’s failure to explore and understand the circumstances which enabled such misconduct to occur in the first place meant that risk of such misconduct occurring in the future remained.  

CCC report on the Mid West Ports Authority – procurement and tendering risks again in the spotlight

On 15 May 2024, the WA CCC tabled its report entitled “Misconduct risks at Mid West Ports Authority.”  

This WA CCC report identified the serious misconduct risks that arose when officers at the Mid West Ports Authority (MWPA) deviated from standard procurement and tender procedures.  

In May 2021, MWPA executed a contract for the provision of security services at the Port of Geraldton to an incumbent company owned by a former Mayor of the City of Greater Geraldton, despite ranking after other companies on the qualitative criteria for assessment. 

The WA CCC identified three crucial deviations from standard procurement processes which posed serious misconduct risk:

• failure to adhere to the MWPA Corporate Delegations Manual. 
• preparation of a presentation given to the Executive of the MWPA which included misleading and inaccurate statements that appeared to favour the award of the contract to the incumbent. 
• failure to adequately record pertinent information and the basis for decisions made during the tender process.  
  

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Authored by:

Cinzia Donald, Partner (Lavan)
Kelly Griffiths, Partner
Daniel Maroske, Partner
Kathy Merrick, Partner
Jack Tipple, Special Counsel
Anna Fanelli, Senior Associate
Kasia Jaruzelska, Senior Associate
Gabrielle Shina, Associate
Jin Lim, Lawyer
Jayme Stubberfield, Law Graduate (Lavan)
Ellie Pitcher-Willmott, Paralegal
India Weddin, Paralegal