National Integrity Spotlight – July 2024

In this month’s edition of the National Integrity Spotlight, we consider the most recent updates from the NACC, the newly announced Fundamental Principles of Australian Anti-Corruption Commissions, and updates from various Australian integrity bodies. We also consider the updated Commonwealth Fraud and Corruption Control Framework, newly updated AML/CTF frameworks, and updates relating to the soon-to-be implemented ART.

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 2024 through to 28 July 2024 suggests that:

• 180 referrals were received;

• 148 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;

• three new preliminary investigations were commenced; and

• three new corruption investigations were commenced.

The NACC has also indicated that:

• it is currently conducting 30 preliminary investigations;

• it has 429 referrals pending assessment;

• six matters are currently before the courts; and

• 29 corruption investigations, including eight joint investigations, are being conducted.

Fundamental Principles of Australian Anti-Corruption Commissions

On 31 July 2024, the commissioners of the ten anti-corruption and integrity agencies of Australia announced the Fundamental Principles of Australian Anti-Corruption Commissions, intended to provide a framework or legislation and policy governing the bodies.

The 12 fundamental principles state that commissions must have:

1. the ability to receive and consider referrals from anyone;
2. the ability to commence an investigation on the commission’s own motion;
3. a mandatory reporting obligation for the heads of public sector agencies to report suspected corruption;
4. protections for whistleblowers and witnesses;
5. coercive powers to obtain information and evidence;
6. the ability to refer matters to a prosecuting authority;
7. the ability to make recommendations;
8. the ability to report on investigations and make public statements;
9. a corruption prevention and education function;
10. a sufficient and predictable budget;
11. transparency of appointments; and
12. effective and proportionate oversight.

Victorian Independent Broad-based Anti-Corruption Commission (IBAC)

IBAC releases 2024-2025 Annual Plan

On 27 June 2024, the IBAC released its 2024-2025 Annual Plan. This refers to the IBAC Plan 2021-2025  which outlines specific focus areas to enhance police and public sector integrity. In order to meet the goals of the final year of the IBAC Plan, the IBAC has developed five key strategic initiatives for 2024-2025 under the umbrellas of ‘police integrity’ and ‘public sector integrity’ to guide its operational activity in the coming year.

The 2024-2025 police integrity strategy will focus on high-risk police stations and specialist teams, excessive use of force, and police responses to family violence incidents and predatory behaviour perpetrated by police. The 2024-2025 public sector integrity strategy will focus on high-risk public sector agencies, including a focus on corrections and youth justice.

The IBAC intends to support these focus areas by implementing intelligence and external communication frameworks, enhancing complaint experiences, and exercising new oversight powers over Victoria Police. The success of the IBAC will be measured by performance targets focusing on equity, effectiveness, efficiency, and economy. These metrics guide IBAC in delivering its statutory responsibilities and achieving is objectives with accountability and transparency.

New South Wales Independent Commission Against Corruption (NSW ICAC)

On 14 June 2024, NSW ICAC published new guidelines for councillors regarding corruption risks associated with overseas travel. It aims to help councillors protect their reputation and security, as well as that of their councils, when travelling overseas. The guidelines note the range of existing requirements that apply to overseas travel for councillors and provide additional advice to councillors traveling on official council business.

The guidance explains how overseas travel can create corruption risks due to the increasingly complex and challenging global environment, or in situations where the travel is not approved by a council and/or paid for by a third party. Other risks may include information security concerns, damage to a council’s interests, or broader domestic interests, and potential for grooming and bribery.

The guidance states that councillors must not participate in overseas activities involving council projects without their council’s express approval. Risks of not adopting this approach include creating a perception that a councillor’s presence and support of a foreign proposal equates to council endorsement, misunderstandings of a councillor’s ability to influence project outcomes, and potentially harming Australia’s reputation as a trading and investment partner.

The guidelines also warn about potential blackmail opportunities and the potential for corrupt conduct, such as through inappropriate gifts, bribery and grooming, and abuse of office.

NSW ICAC to collaborate with researchers to use AI to uncover corruption

In June 2024, it was announced that NSW ICAC will collaborate with Dr José-Miguel Bello y Villarino from the University of Sydney Law School and the ARC Centre of Excellence for Automated Decision-Making & Society on a new research project. The project aims to explore how AI’s pattern-matching capabilities can aid anti-corruption agencies in detecting potential cases of corruption within the public sector. It will analyse the legal and technical requirements for safely operating AI-driven anti-corruption systems and provide policy insights for their effective use. The project is designed to result in a roadmap for deploying AI systems to detect both serious and subtle systemic corruption that might otherwise go unnoticed.

South Australian Independent Commission Against Corruption (SA ICAC) 

SA ICAC publishes University Integrity Survey, highlighting perceptions of corruption in public universities

On 4 June 2024, SA ICAC published the University Integrity Survey 2023, which reveals concerning perceptions of corruption risks in South Australia’s public universities. This integrity survey, which follows the first conducted in 2020, indicates a heightened awareness of vulnerabilities, particularly in nepotistic recruitment, misuse of authority, and in procurement practices.

Respondents of the survey identified nepotism and favouritism in recruitment as the most significant corruption risk, noting that these practices can lead to a culture of disgruntlement and decreased workplace performance. Misuse of authority was also prominently perceived, manifesting in forms of partiality in senior appointments, pressure to alter grades, and exploitation of casual staff. The survey noted instances of bullying and harassment, particularly when associated with individuals in positions of influence, leading to emotional harm and reduced moral among staff. Academic integrity issues, including fraudulent authorship and challenges related to students’ misuse of artificial intelligence, were also reported as emerging risks.

An important finding is that the universities do not foster a culture where staff feel safe to report misconduct, with increasing anxiety about retaliation of such reports since 2020. There is also a lack of understanding among university staff about their obligations to report suspected corruption, suggesting that corrupt conduct might go unreported. Overall, the survey underscores the need for improved training, robust integrity policies, and supportive environments to address corruption risks in South Australian universities.

SA ICAC responds to reports of the SA ICAC Inspector

On 27 June 2024, the ‘Commissioner’s response to three reports of the Inspector tabled 30 April 2024’ was tabled in Parliament. This response, by SA ICAC Commissioner the Hon. Ann Vanstone KC, addressed the reports made by the Inspector of the SA ICAC, Mr Philip Strickland SC, who has since concluded his term.

As summarised in the May 2024 National Integrity Spotlight, Mr Strickland SC as Inspector made reports concerning the examination of two investigations conducted by the previous Commissioner, the Hon. Bruce Lander KC (referred to as the Rusby Investigation and the Barr Investigation), and the processing of various complaints dating back to 2018 made by Mr Michael Fuller.

The Commissioner provided that despite the Inspector finding no evidence of corruption and no evidence of misconduct in public administration on the part of the former Commissioner or any of his employees, the “scope of the Inspector’s reviews can fairly be described as exhaustive”.

Commissioner Vanstone further emphasised that given the findings of the Inspector, the community and Parliament should reflect on the accuracy of the assumptions which offered to justify the 2021 amendments to the Independent Commission Against Corruption Act and Ombudsman Act 1972 (SA). These amendments are said to have detrimentally affected the public integrity scheme on which the community relies to safeguard public administration from corruption, misconduct and maladministration.

A copy of the Commissioner Vanstone’s response to the three reports can be found here.

Tasmania Integrity Commission (TIC)

Integrity Commission response to Weiss Review recommendation

On 8 July 2024, the TIC responded to the recommendations of the Weiss Independent Review into Paul Reynolds (Weiss Review), which was released on 28 June 2024.

The Weiss Review was initiated in response to the findings of the Commission of Inquiry into the Tasmanian Government’s Responses to Child Abuse in Institutional Settings which found there were failings in the initial investigation into allegations of child sexual abuse, and the decision to hold a police funeral following Reynolds’ death in 2018.

The Weiss Review assessed whether Reynolds used his position as a police officer to groom young people and commit child sexual abuse. The Review also considered if there was any misconduct by police officers involved in the investigation of any allegations against Reynolds.

The Weiss Review made five recommendations. One recommendation was for amendments to the Integrity Commission Act 2009 to ensure that all notifications made to TIC in respect of members of Tasmania Police who are alleged to have groomed and/or sexually abused persons can be investigated independently by TIC.

In response, TIC’s Chief Commissioner, Greg Melick released a statement which noted that TIC was established to prevent and investigate misconduct in public sector institutions, including Tasmania Police and that the Weiss Review highlighted issues of abuse of power and position, which undermine public trust. Commissioner Melick acknowledged the Weiss Review’s recommendation about the TIC and the importance of such work, noting that the TIC’s current budget and resources are insufficient to provide the level of investigation and oversight recommended by the Weiss Review.

Commonwealth Fraud and Corruption Control Framework 

On 1 July 2024, the updated Commonwealth Fraud and Corruption Control Framework took effect. The framework, which builds on the 2017 framework, was designed to support effective governance and accountability across Commonwealth organisations and sets out the elements that organisations need to ensure they employ effective fraud and corruption control. These elements are:

• governance and oversight;

• rigorous risk assessments;

• informed and targeted control plans; and

• effective controls encompassing appropriate prevention, detection, investigation, referral, and reporting mechanisms.

There are three key components of the framework, being:

1. Fraud and Corruption Rule, which provides a legislative basis for the Commonwealth’s fraud and corruption control arrangements, and is binding on corporate and non-corporate Commonwealth entities, and not binding on Commonwealth companies;
2. Fraud and Corruption Policy, which sets out procedural requirements for accountable authorities of non-corporate Commonwealth entities to establish and maintain an appropriate system of fraud and corruption control, and serves as guidance for other Commonwealth entities; and
3. Fraud and Corruption Guidance, which provides detailed guidance intended to assist officers responsible for fraud and corruption control to appropriately implement the Rule and the Policy.

The Framework also requires Commonwealth entities to:

• have governance structures and processes to oversee and manage risks of fraud and corruption effectively;

• have officials responsible for managing risks associated with fraud and corruption; and

• periodically review the effectiveness of the fraud and corruption controls.

Attorney-General and AUSTRAC announcement of two new national risk assessments for money laundering and terrorism financing

On 9 July 2024, AUSTRAC and the Attorney-General announced the release of the National Risk Assessments on money laundering and terrorism financing in Australia.  Having consulted the intelligence community, law enforcement and regulatory agencies, AUSTRAC stated the risk assessments aim to “provide a collective understanding of the scale, sophistication and threat of money laundering and terrorism financing in Australia.”

Key findings in Money Laundering in Australia: National Risk Assessment (Money Laundering Assessment) most notably include the following:

• money launderers make prominent use of Australia’s lawful domestic financial channels to place, layer and integrate funds;

• Australia remains an attractive destination to store and integrate criminal proceeds because of its stable political system and economy;

• crimes generating the highest value of illicit proceeds that require laundering are drug offences, tax and revenue crimes and defrauding government-funded programs;

• the increased speed of financial transactions has made it harder for reporting entities to identify and freeze suspicious transfers before funds leave an account;

• opaque legal structures can be created in Australia and used by criminals to help conceal their identity and illicit activity; and

• the use of professional service providers who knowingly or unknowingly assist launders to establish, advise on or operate corporate and financial infrastructure, reducing visibility of the ultimate beneficial owner.

Key findings in Terrorism Financing in Australia: National Risk Assessment most notably include the following:

• Australia is an exporter of small-scale terrorism financing funds to offshore terrorist organisations and affiliated groups;

• there is no evidence or intelligence base to suggest terrorism financing funds are flowing into or returning to Australia;

• the scale of funds to support foreign fighter travel has decreased in line with fewer individuals participating in offshore conflicts;

• the use of social media, communication, and crowdfunding platforms have become integral to recruitment and fundraising activities;

• transactions conducted through regulated financial channels often mirror legitimate financial activity and do not raise suspicion making terrorism financing difficult to detect; and

• financial intelligence efforts continue to evolve from a largely reactive role in monitoring suspected violent extremists and supporting investigations, towards a proactive role in countering violent extremism.

Administrative Review Tribunal updates

The Administrative Appeals Tribunal (AAT) has announced that the new tribunal, the Administrative Review Tribunal (the ART) will commence operation on 14 October 2024. The new tribunal is being introduced due to concerns about ‘political stacking’, as well as significant backlogs. Matters that are before the AAT at the date of transition will be transferred to the ART. In the meantime, the AAT will continue to accept applications for the review of decisions. The AAT has stated that the ART will not be in a position to consider cases already decided by the AAT.

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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
Gabrielle Shina, Associate
Ellie Pitcher-Willmott, Lawyer
India Weddin, Paralegal
Kristy Yeoh, Special Counsel (Lavan)
Freya Surma-Litchfield, Graduate (Lavan)