The announcement states that
The CIC will be a centralised, specialist centre for the investigation of corruption in the public sector. It will also work with agencies to build resilience to corruption and bolster agency capability to detect, deter and investigate corrupt conduct.
The CIC will be established as an independent statutory agency, led by a commissioner and two deputy commissioners. The CIC will comprise: a law enforcement integrity division – this will have the same functions and powers as the current Australian Commission for Law Enforcement Integrity, but with a broader jurisdiction a public sector integrity division – this will investigate alleged criminal corruption involving government departments and their staff, parliamentarians and their staff, the staff of federal judicial officers, and in appropriate circumstances, recipients of Commonwealth funds.The consultation paper accompanying the announcement states
Current arrangements
Existing integrity and anti-corruption arrangements in the Commonwealth public sector are best described as a multi-agency approach. The Commonwealth’s present integrity framework is comprised of a range of agencies and other entities, each contributing to promoting integrity and preventing, detecting and investigating corruption in different parts of the Commonwealth public sector. Each entity operates in a tailored way specific to the function it performs, reflecting the different remits of different integrity entities.
Agencies and other entities which form part of the multi-agency approach include the:
• Australian Commission for Law Enforcement Integrity (ACLEI) and the Integrity Commissioner
• Australian Electoral Commission
• Australian Federal Police (AFP)
• AFP-hosted Fraud and Anti-Corruption Centre (FACC)
• Australian National Audit Office (ANAO) and Auditor-General
• Australian Public Service Commission (APSC) and Commissioner (including the Merit Protection Commissioner)
• Australian Securities and Investments Commission (ASIC)
• Commonwealth Ombudsman
• Independent Parliamentary Expenses Authority (IPEA)
• Inspectors-General of Intelligence and Security, Taxation and the Australian Defence Force (IGIS, IGT and IGADF)
• Parliamentary Committees (include the Senate Standing Committee of Privileges and Standing Committee of Privileges and Members’ Interests for the House of Representatives)
• Parliamentary Service Commissioner and Parliamentary Service Merit Protection Commissioner, and
• Royal Commissions.
Several of these entities operate across the public and private sector (such as the AFP and ASIC). Others have jurisdiction only in relation to public officials employed under the Public Service Act 1999 (Public Service Act) (such as the APSC), and others have jurisdiction only in relation to high-risk law enforcement bodies and functions (such as ACLEI) or specific parts of the public sector (such as the IGIS, IGT and IGADF). Some investigate misconduct and impropriety, including where such conduct involves corruption or fraud, and others criminal conduct, including corrupt criminal conduct. See page 2 of the overview diagrams at Attachment A for an outline of these functions and the powers available to each.
These arrangements have proven successful in that the Australian public sector is consistently ranked as a low corruption jurisdiction and it is generally accepted that there is no evidence of systemic or endemic integrity issues in the federal public sector. However, the current structure is necessarily diverse, exhibits several complexities and is not always well understood. There is no single central body at the Commonwealth level with ultimate responsibility for the prevention, detection and investigation of corruption issues across the public sector.
There is also no single definition of ‘corruption’, potentially contributing to a lack of understanding of what kind of conduct is criminal corruption compared to behaviour which gives rise to broader and more generalised ‘integrity’ issues where failures such as breaches of the APS Code of Conduct or other agency specific codes of conduct would not constitute offending against Commonwealth law. Further, no single body is collecting consistent, across-the-board data about integrity issues in order to get a ‘big picture’ of problems that may arise, as a means of analysing trends and to inform prevention efforts.
The Proposed Commonwealth Integrity Commission
The Australian Government proposes to establish a Commonwealth Integrity Commission (CIC) to detect, deter and investigate suspected corruption and to work with agencies to build their resilience to corruption and their capability to deal with corrupt misconduct. The CIC will consist of a ‘law enforcement integrity division’ incorporating the existing structure, jurisdiction and powers of ACLEI and a new ‘public sector integrity division’. Both the law enforcement and public sector divisions of the CIC will be headed by separate deputy commissioners, who will each report to a new Commonwealth Integrity Commissioner.
The two divisions will have different jurisdictional coverage, powers and functions, tailored to the nature of the entities within their jurisdiction. The law enforcement division will retain the powers and functions of ACLEI, but with an expanded jurisdiction to cover several further agencies that exercise the most significant coercive powers and therefore present a more significant corruption risk. The public sector division will cover the remaining public sector. As such, its powers and functions will be different to those of the law enforcement division and will be appropriately tailored.
Jurisdiction
Law enforcement division
The law enforcement division will have jurisdiction over those agencies already within ACLEI’s remit, being: • the Australian Criminal Intelligence Commission • the AFP • the Australian Transaction Reports and Analysis Centre (AUSTRAC) • the Department of Home Affairs, and • prescribed aspects of the Department of Agriculture and Water Resources (DAWR).
Its jurisdiction will also be expanded to cover additional public sector agencies with law enforcement functions and access to sensitive information, such as the: • Australian Competition and Consumer Commission (ACCC) • Australian Prudential Regulation Authority (APRA) • Australian Securities and Investments Commission (ASIC), and • Australian Taxation Office (ATO).
The proposal to bring the ACCC, APRA, ASIC and ATO within the law enforcement division’s jurisdiction reflects those agencies’ access to significant coercive powers and highly sensitive information and thus the fact that these bodies bear some significant resemblance to traditional law enforcement bodies already within ACLEI’s remit. Each of these proposed additional agencies to be overseen by the law enforcement division has the power to undertake investigations, compel the production of documents, enter premises and, for ACCC and ASIC, access stored telecommunications. These agencies also have access to sensitive and often highly valuable information, such as taxpayer or company information and knowledge of the tax or relevant corporate regulatory systems, as well as their vulnerabilities. These agencies operate closely with the corporate sector and those they regulate, and may be targeted by people or corporate entities or organised crime groups seeking to evade regulatory systems and enforcement action.
This combination of access to powers, information and influence presents a heightened risk and a need for enhanced scrutiny and integrity oversight arrangements.
The law enforcement division’s jurisdiction will also extend to cover the whole of DAWR, rather than only prescribed aspects. The proposed expansion to the whole of DAWR will overcome the uncertainty ACLEI has experienced as a result of only having jurisdiction over the parts of the agency prescribed in the Law Enforcement Integrity Commissioner Regulations 2017, which are based on the performance of border-related functions and access to coercive powers. The Parliamentary Joint Committee on ACLEI acknowledged and detailed these difficulties in its 2016 report Inquiry into the jurisdiction of the Australian Commission for Law Enforcement Integrity, and recommended the whole of DAWR be brought within ACLEI’s jurisdiction.
Public sector division
The public sector division of the CIC will have jurisdiction over: • public service departments and agencies, parliamentary departments, statutory agencies, Commonwealth companies and Commonwealth corporations • Commonwealth service providers and any subcontractors they engage, and • parliamentarians and their staff.
By extending the jurisdiction of the public sector division of the CIC to service providers and contractors, the CIC will have the capacity to oversee the integrity of entities which expend or receive significant amounts of Commonwealth funding where there is evidence of corrupt conduct that meets the relevant criminal threshold proposed.
The CIC will also be able to investigate members of the public or other private entities that receive or deal with Commonwealth funds (and might not otherwise be within jurisdiction), to the extent that their suspected corrupt conduct intersects with a public official’s suspected corrupt conduct. The CIC will also be able to refer relevant matters to the AFP in appropriate circumstances, such as where the AFP is conducting an investigation into the criminal conduct of an individual or organised crime figure and it would be more efficient for the AFP to also consider the public sector element at the same time.
Further consideration (through the consultation process on the proposed model) will be given to whether the public sector division of the CIC could be given jurisdiction over members of the federal judiciary (noting their staff are employed under the Public Service Act and so will come within CIC jurisdiction).
Functions
The CIC will provide a dedicated, specific and expert investigative capability that can be applied to the public sector.
The CIC will also collect and analyse case studies and data from across the public sector and disseminate this analysis and data to help build effective prevention and risk mitigation strategies. It will also provide training and inform policy development and reforms on integrity issues. Through these functions, it will strengthen the detection and investigation of corruption, as well as enhance agencies’ resilience to corruption, thereby improving the integrity and accountability of the public sector.
Investigations
The CIC’s primary function will be the investigation of serious criminal conduct that represents corrupt conduct in the public sector.
Law enforcement division
The law enforcement division will investigate corrupt conduct amongst staff within its jurisdiction, giving priority to serious and systemic corruption. The current definition of corruption under the LEIC Act will remain the relevant standard to which the law enforcement division will investigate.
Public sector division
The public sector division will investigate conduct capable of constituting a nominated range of specific criminal offences. It will only investigate criminal offences, and will not make findings of corruption at large. This approach ensures that it is the courts making findings of criminally corrupt conduct. T
he CIC, as the peak corruption oversight organisation for the public sector, will receive mandatory referrals of allegations of serious or systemic corrupt conduct from agency heads. It could also receive referrals of matters from the AFP where those matters were considered to constitute serious or systemic criminal offending that represents corrupt conduct in the public sector.
The CIC will also be able to refer issues that did not meet the necessary threshold back to the relevant agency to deal with according to the relevant code of conduct or other procedures, or to the AFP where appropriate. At the conclusion of an investigation, the CIC will be able to refer a criminal brief of evidence to the Commonwealth Director of Public Prosecutions (CDPP). It will not make findings of corruption (or other criminal offending). Findings of corruption will be a matter for the courts to determine, according to the relevant criminal offence. This addresses one of the key flaws in various state anti-corruption bodies, being that findings of corruption can be made at large without having to follow fundamental justice processes.
The CIC will not replace agencies’ own responsibility to prevent, detect, investigate and respond to internal misconduct and other integrity issues, including by educating staff and having in place relevant controls. The CIC will inform this work through its insight into whole-of-Commonwealth risks and best practice. Nor will the CIC replace the functions and responsibilities of existing integrity agencies like the Commonwealth Ombudsman and the APSC—those agencies’ functions and responsibilities will operate alongside the CIC, supported by appropriate referral and information sharing arrangements. The CIC’s investigatory role will complement those of the AFP, providing a dedicated, specific and expert resource for public sector corruption investigations. The AFP will retain its role in investigating criminal corruption outside of the public sector, and could cooperate with or take over investigations on referral by the CIC where appropriate (as is current practice with ACLEI).
The relationship between the CIC and the AFP-hosted Fraud and Anti-Corruption Centre (FACC), which is a multi-agency forum that decides on the appropriate treatment of corruption, fraud and foreign bribery matters (not an investigation forum), will be given further consideration. One option is that the FACC would be able to refer public sector corruption issues (that meet the relevant criminal threshold) to the CIC or the AFP depending on the circumstances (for example, a matter could be referred to the AFP because it involves members of the public outside of the CIC’s jurisdiction, or organised crime figures already the subject of an AFP investigation). This protocol could be the subject of a formal arrangement through a memorandum of understanding.Two perspectives are noted here and here.
