National Integrity Spotlight – January 2024

In this month’s edition of the National Integrity Spotlight, we consider the most recent updates from the NACC, developments from various state corruption and integrity bodies, and how Australia scored on the 2023 Corruption Perceptions Index.

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 17 December 2023 suggests that:

• 2,444 referrals were received;
• 1,929 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;
• 121 referrals are pending triage;
• 237 referrals are currently under assessment;
• 185 referrals have been assessed; and
• 11 new investigations have been commenced, including four which will be jointly investigated.

Northern Territory ICAC – Conflicts of Interest

The Independent Commissioner Against Corruption in the Northern Territory (NT ICAC), Mr Michael Riches has recently released comments in relation to conflicts of interest, following a number of high-profile referrals. Commissioner Riches stated that “the proper identification, disclosure and management of conflicts of interest is essential to integrity in public administration.”

The Commissioner invited members of the Legislative Assembly to proactively disclose financial or personal interests that may constitute a conflict, or be perceived to be a conflict, with their official duties. It was also recommended that public officers review and update disclosures that have been made, and that immediate action is taken with respect to conflicts that require management.

Victoria Police issues response to recommendations of IBAC

The Independent Broad-based Anti-Corruption Commission (IBAC) has issued a Special Report analysing 104 recommendations made to Victoria Police from January 2016 to March 2022 to address and prevent police misconduct and corruption. The IBAC has specific power to make recommendations to Victoria Police under the Independent Broad-based Anti-corruption Commission Act 2011 (Vic).

Key findings of the report include:

• that Victoria Police accepted and implemented more than 90% of IBAC’s recommendations;
• half of IBAC’s investigations involving Victoria Police led to recommendations of discipline, and half of these recommendations were made in part because officers engaged in ‘obscuring behaviours’;
• the most frequent recommendation related to improving how Victoria Police handles complaints and undertakes misconduct investigations; and
• most recommendations that have been implemented were implemented within two years.

Western Australian Crime and Corruption Commission highlights risk of misconduct during the procurement process

The Western Australian Crime and Corruption Commission (WA CCC) has handed down a serious misconduct finding in respect to a Procurement Manager’s undeclared conflicts of interest when dealing with maintenance contracts.

The WA CCC commenced an investigation, after receiving a notification from Murdoch University concerning undeclared conflicts of interest in relation to contractors.

It was found that Murdoch University’s Manager of Facilities and Maintenance used his role to ensure a steady stream of work for a company named “BM OnDemand”. BM OnDemand had two shareholders, the Manager’s wife as well as his best friend.

The investigation found that the Manager failed to declare a conflict of interest to Murdoch University and concealed his involvement with the business. He went on to arrange for BM OnDemand to be awarded a stream of work totalling over $1,000,000. In return, numerous transfers totalling $72,883.77 were made from BM OnDemand’s bank account to the Manager and his wife.

Having regard to the information gathered by the WA CCC during the course of the investigation, the Commission was able to form an option of serious misconduct on the part of the Manager.

Medibank data breach hacker revealed

The Australian government has announced sanctions against Medibank hacker, Alekzandr Ermakov, for utilizing ransomware to attack the Medibank network in 2022. Ermakov, a Russian citizen, is being held responsible for the Medibank data breach which saw the personal data, including sensitive medical information, of almost 10 million Australians leaked on the dark web.

In 2021, Australia established a thematic autonomous sanctions regime in relation to significant cyber incidents. Under the regime, the Minister for Foreign Affairs can impose targeted financial sanctions and declare a person for a travel ban. The Minister must be satisfied that the person (or entity) has:

• caused, or attempted to cause, a significant cyber incident, being a cyber-related event that results in, or seeks to cause, harm to Australia or another country or countries;
• has assisted with causing, or with attempting to cause, a significant cyber incident; or
• has otherwise been complicit in causing, or in attempting to cause, a significant cyber incident.

On 23 January 2024, for the first time since the cyber sanctions framework was legislated, the Australian government used its powers to impose sanctions on Ermakov.

The sanctions include a targeted financial sanction and a travel ban. It is now a criminal offence, punishable by up to 10 years in jail and fines, to provide Ermakov with any assets, including cryptocurrency wallets or ransomware payments. The action taken by the Australian government was coordinated with the United States and the United Kingdom, with both jurisdictions designating Ermakov a cyber-hacker.

Updated Corruption Perceptions Index

Transparency International (TI) recently released its 2023 Corruption Perceptions Index (CPI).

The CPI ranks 180 countries and territories by their perceived levels of public sector corruption according to experts and businesspeople. The CPI scores are based on a scale of 0 and 100, with 0 being very corrupt and 100 being very clean.

The 2023 Report shows Australia ranked 14th on the CPI, with a score of 75 points. This remains steady with last year’s score of 75 points. As covered in our February 2023 edition of the National Integrity Spotlight, it was speculated that the improvement from Australia’s record low score in 2021 followed the establishment of the National Anti-Corruption Commission.

More widely, TI highlighted that the global trend of weakening justice systems is reducing accountability for public officials and allowing corruption to thrive. Authoritarian and democratic leaders are undermining justice results in:

• impunity for corruption and, in some cases, encouraging it by eliminating consequences for criminals;
• bribery and abuse of power affecting courts and other justice institutions; and
• vulnerable people having restricted access to justice, while the rich and powerful capture whole justice systems.

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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
Monique Kotevski, Lawyer
Emma Bolton, Solicitor (Lavan)