National Integrity Spotlight – June 2023

This edition of the National Integrity Spotlight considers all that has been happening since the commencement of the National Anti-Corruption Commission (NACC) on 1 July 2023, the final report from the Robodebt Royal Commission, the historic penalty in AUSTRAC’s case against Crown, the findings of Independent Commission Against Corruption’s (ICAC) investigation into the former NSW Premier, amendments to the Commonwealth PID Act, and the Crimes Legislation Amendment (Combatting Foreign Bribery) Bill. We also consider the Inquiry into probity and ethics in the Australian Public Sector and the 2023-2027 strategic direction of the Australian Criminal Intelligence Commission.

Commencement of the NACC

The long-awaited NACC commenced operations on 1 July 2023.

On 3 July 2023, in his first public address as Commissioner of the NACC, the Hon Paul Brereton AM RFD SC highlighted the role of the NACC in addressing corruption and that he aims for the NACC to develop ‘the reputation of being fearless but fair, independent and impartial.’

The Commissioner noted that, by 5pm on Sunday 2 July, 44 matters had been referred online and 5 telephone call backs had been requested. By close of business on 4 July 2023, those figures had increased to 186 reports by the webform, and 116 calls. By close of business on 10 July 2023, those numbers had jumped again to 311 referrals. The NACC noted that approximately 54% of referrals related to matters well publicised in the media and confirmed this included referrals relating to the Robodebt Royal Commission report.

NACC eLearning Tools

An eLearning module has been released by the NACC Taskforce for public officials across all departments and agencies in the Commonwealth Public Sector. The APSLearn training can be accessed here. The Attorney-General’s department has also released a series of educational tools and guidance on topics including:

1. the mandatory referral obligations of heads of Commonwealth agencies under the NACC Act;
2. responsibilities for Public Interest Disclosure officers under the NACC Act;
3. voluntary referrals;
4. the process of making a referral, both voluntary and mandatory; and
5. information for ministers, parliamentarians, and their staff.

Robodebt Final Report

Following an 11 month inquiry, Ms Catherine Holmes AC SC delivered the final report in the Royal Commission into the Robodebt Scheme on 7 July 2023. The Inquiry found that the unlawful debt collection scheme issued more than 400,000 false notices to welfare recipients from 2015 to 2019.  Commissioner Catherine Holmes conducted 46 days of hearings and heard from more than 100 witnesses, including two former prime ministers.

The final report presented 57 recommendations, split into several overarching categories, including failures in the budget process, automated decision-making, and improving the Australian Public Service. Of note, the report highlighted two known suicides by July 2017 and criticised the government for failing to conduct a comprehensive review of the Scheme.

Notable, the final report contained a sealed chapter where several officials involved in the scheme were recommended or referred for civil action or criminal prosecution. The sealing of this section was done to avoid prejudicing future legal proceedings.

AUSTRAC’s historic penalty in the Crown Resorts Limited Prosecution

On 1 March 2022, AUSTRAC commenced proceedings in the Federal Court of Australia against the Crown for alleged serious and systemic non-compliance with Australia’s AML/CTF laws. The alleged non-compliance related to breaches of section 36(1) (ongoing customer due diligence) and 81(1) (reporting entity to have an AML/CTF program) of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act). The proceedings followed the 2021 Royal Commissions into Crown and an independent investigation by the Australian Transaction Reports and Analysis Centre (AUSTRAC).

On 30 May 2023, AUSTRAC and Crown Perth and Crown Melbourne (together, Crown) jointly proposed that Crown would pay a penalty for various contraventions admitted by Crown, including that it:

1. failed to appropriately assess the AML/TF risks they faced and to identify and respond to changes in risk over time;
2. did not have appropriate risk-based systems and controls in their AML/CTF programs to mitigate and manage the AML/TF risks they faced;
3. failed to establish an appropriate framework for Board and senior management oversight of their AML/CTF programs; and
4. did not conduct appropriate ongoing customer due diligence on a range of specific customers who presented higher money laundering risks.

On 11 July 2023, Justice Michael Lee ordered Crown to pay a penalty of $450 million over two years.

NSW ICAC report

On 29 June 2023, the NSW Independent Commission Against Corruption (ICAC) delivered its report into Operation Keppel. ICAC found that former NSW Premier, Gladys Berejiklian, engaged in serious corrupt conduct in failing to report to ICAC suspicions that her then boyfriend and fellow MP, Daryl Maguire, may have engaged in corrupt activities. ICAC also found that she failed to declare a conflict of interest while dealing with grant applications in Wagga Wagga, being Mr Maguire’s electorate.

ICAC also found that Mr Maguire engaged in serious corrupt conduct by improperly using his office and its resources and failing to disclose his position in G8wayinternational or the pecuniary benefits received from its activities. ICAC said the corrupt conduct could amount to misconduct in public office, an offence which can result in substantial jail time.

ICAC has sought the advice of the Director of Public Prosecutions (DPP) as to whether any prosecution should be commenced.

Amendments to the Public Interest Disclosure Act 2013 Act (Cth)

On 1 July 2023, a number of changes to the Public Interest Disclosure Act 2013 (Cth) (PID Act) came into effect, following the passage of the Public Interest Disclosure Amendment (Review) Act 2023 (Cth) (PID Amendment Act) on 19 June 2023. The primary purpose of the PID Amendment Act was to implement a series of reforms arising from the PID Act review conducted by Mr Philip Moss AM, various other Parliamentary Inquiries, as well as to better align the PID Act with the private sector whistleblowing scheme in the Corporations Act 2001 (Cth) and improve the operation of the PID Act.

The PID Amendment Act included provisions that ensure ‘personal work-related conduct’ is carved out of the PID Act, an increase in the scope of protected witnesses, a higher threshold for disclosable conduct, and directions the interplay between NACC disclosures and the PID Act.

The Government has also indicated that it intends to progress broader reforms aimed at addressing the complexity of the PID framework and providing protections for public sector whistleblowers.

Crimes Legislation Amendment (Combatting Foreign Bribery) Bill

The Crimes Legislation Amendment (Combatting Foreign Bribery) Bill 2023 (Cth) (the Bill), introduced on 22 June 2023, will, if passed, amend the Criminal Code and the Income Tax Assessment Act 1997 to strengthen the legal framework for prosecuting foreign bribery.

Schedule 1 of the Bill:

1. extends the foreign bribery offence to include the bribery of candidates for public office (not just current holders of public office);
2. extends the foreign bribery offence to include bribery conducted to obtain a personal advantage (the current offence is restricted to bribery conducted to obtain or retain a business advantage);
3. removes the existing requirement that the benefit or business advantage be ‘not legitimately due’ and replaces it with the concept of ‘improperly influencing’ a foreign public official;
4. removes the existing requirement that the foreign public official be influenced in the exercise of their official duties; and
5. makes it clear that the foreign bribery offence does not require the prosecution to prove that the accused had a specific business, or business or personal advantage, in mind, and that the business, or business or personal advantage, can be obtained for someone else.

The Bill also creates a new indictable corporate offence for the failure to prevent foreign bribery where companies may be held directly liable for the activities of employees, contractors, agents, and subsidiaries.

The Bill is currently before the House of Representatives.

Inquiry into probity and ethics in the Australian Public Sector

On 27 June 2023, the Joint Committee of Public Accounts and Audit (the Committee) began the Inquiry into probity and ethics within the Australian Public Sector, with a view to examining whether there are systemic factors contributing to poor ethical behaviour in government agencies, and identifying opportunities to strengthen government integrity and accountability.

The inquiry will consider issues arising from five Auditor-General Reports from key government agencies including APRA, ASIC, ACCC, the Department of Health and Aged Care and the Department of Infrastructure, Transport, Regional Development, Communications and the Arts.

The Committee is accepting submissions addressing the terms of reference until Friday, 25 August 2023.

The Australian Criminal Intelligence Commission’s Strategic Direction for 2023-2027

The Australian Criminal Intelligence Commission (ACIC) has released its Strategic Direction for 2023-27. In continuing to seek to protect Australia from serious criminal threats, the ACIC has set out four key priorities, namely to:

1. be a trusted source of criminal intelligence;
2. provide comprehensive information and intelligence through the implementation of the National Criminal Intelligence System;
3. provide accurate and timely background checks; and
4. be a high-performing agency.

The strategic direction reaffirms the ACIC’s commitment to preventing crime, protecting communities, and maintaining the rule of law in Australia.

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Authored by:

Daniel Maroske, Partner
Kathy Merrick, Partner
Kelly Griffiths, Partner
Cinzia Lee Donald, Partner (Lavan)
Phoebe Brosnan, Special Counsel
Anna Fanelli, Senior Associate
Sarah Maneckshana, Associate
Gabrielle Shina, Associate
Emma Bolton, Solicitor (Lavan)
Jethro Schoeman, Solicitor (Lavan)
Sophia Liu, Lawyer
Stefani Giangregorio, Lawyer
Anastasia Tyshing, Paralegal