Accountability Round Table
STRENGTHENING GOVERNMENT INTEGRITY
Open Government Partnership: Transition from NAP1 to NAP2
Government request for Civil Society responses.
Response from the Accountability Round Table - Submissions and Comments
A. Public Sector Integrity
- Submissions
(a) Government Integrity
WHY WE NEED A FEDERAL ANTI-CORRUPTION COMMISSION
1.What evidence of corruption is there?
(a)Allegations of bribery by Note Printing Australia (NPA) and Securency, which produced and sold bank notes both to the Australian and overseas governments. These allegations date back to 1999 and continued up to 2011. Evidence of bribes up to many tens of millions of dollars were made to tax haven accounts all over the world. The companies are controlled by the Reserve Bank and reports reached the Reserve Bank Board, but nothing effective was done.
(b)AWB (formerly the Australian Wheat Board, until 1 July 1999), and payments made contrary to international trade sanctions.
(c)The Australian Public Service CommissionState of the Service report (January 2018) on corruption in the Public Service, including that staff believe they work in a high corruption risk environment.
(d)Allegations of systemic fraud in the Defence Department reported in the Ageon 27 December 2017, sufficient to spark an Internal Audit. This is the Commonwealth Government’s biggest spender, the allegations included Defence Department staffers colluding with contracting companies to design well-paid jobs for themselves, and the Department awarding contracts to companies without a competitive tender process and only flimsy justification. The report found 80 procurements breached Department guidelines, 45 procurements were unable to be examined because of missing paperwork, and only 79 procurements met the Department’s internal rules.
(e)Recent research arising from economic analysis by Price Waterhouse Coopers, for Transparency International, showed that the impact of corruption in Australia resulted in our GDP this year could have been $72.3 billion higher had Australia maintained its 2012 reputation for minimal corruption.
(f)The activities of Eddie Obeid’s family in relation to the grant of mining licences in the Bylong Valley and the behaviour of former NSW Minister for Mining, Ian McDonald.
(g)Corruption in Victoria’s Education and Transport Departments uncovered by IBAC.
(h)Corruption in the Queensland Police and Government uncovered by the Fitzgerald Inquiry in the 1990s.
(i)Corruption in the NSW municipal investigations in relation to land development decisions.
(j)The emergence of the Panama Papers showing the amount of money held for Australian clients in tax havens, a potential source of information relating to corruption.
(k)The amount of money donated by companies and individuals in uncontrolled political donations.
(l)The Australian Government’s actions in 2004 while negotiating with the Government of East Timor. During these negotiations, Australian agents installed listening devices inside the East Timorese cabinet room, enabling Australia to listen to Cabinet deliberations during the negotiations. When East Timor discovered and launched proceedings in The Hague to have the oil and gas treaty declared void, ASIO officers raided the offices of the East Timorese solicitor in Australia, seizing their files on the matter and the passport of the ASIS officer who was to give evidence of Australia’s behaviour. His passport was cancelled, preventing him travelling to The Hague to give evidence. The behaviour of Australia’s officers, no longer denied, amounted to an indefensible fraud and grossly unethical activity. If such behaviour had occurred during court proceedings in Australia, those responsible would unquestionably have been imprisoned for a very serious contempt of court.
(m)The activities of the Commonwealth Bank over a considerable period, including laundering money on many occasions and multiple other offences. The bank’s officers are not public servants, but no relevant Commonwealth agency appears to have picked up these activities until AUSTRAK did recently. The activities of the Commonwealth Bank staff however is but an example of corrupt activity on a grand scale in the major Australian bank. To that
(n)These questions are examined in the speech “Corruption More Than A Cancer”, delivered by the former UK Prime Minister David Cameron to Transparency International, in December 2017.
2.Why do we need a National Integrity Commission?
Corruption occurs where and when money, power and influence are found and persons pursue them in a criminal or improper way. The largest quantity of each is found in Australia in Canberra. Each year the Federal Government purchases tens of billions of dollars of goods and services. One of the largest purchasers is the Defence Department which in 2009 alone sought tenders for more than $45 billion. Corruption is usually well-hidden; it is difficult to discover and expose. The Commonwealth is also a signatory of the United Nations Convention Against Corruption (UNCAC) and a member of the Open Government Partnership. Article 36 of UNCAC requires a State Party to ensure the existence of bodies specialised in combatting corruption through law enforcement able to carry out their functions effectively, without any undue influence. It is highly doubtful that Australia has complied with this obligation.
Political donations are made by many individuals out of a genuine desire to fund and support the political party of their choice, without any ulterior motive. But most large donations are made as a means to obtain access and influence which is not available to the general community. There is no adequate control in the Federal sphere of electoral donations. The Federal system is the weakest of this nation’s electoral funding regimes. There are no prohibitions on any class of donor, no caps on the size of donations and expenditure. It is all but impossible for anyone to determine who has given how much to which politician or political party and for what purpose. Donations can also be hidden by the use of bodies such as the Free Enterprise Foundation or the North Sydney Forum.
Nor is there any adequate regime in place to prevent Ministers, Members of Parliament or public servants leaving a position and moving to employment in private industry, taking with them their knowledge, experience and means of access. There is a high risk that whilst public officers they will make decisions favourable to prospective private sector employers who will later reward them with high value employment or other benefits.
There is little incentive on the part of public sector employees to complain about suspected corruption, in light of the seriously flawed rules for protecting whistle-blowers. Freedom of information is also inadequately maintained in the Commonwealth area.
Risks of corruption have increased in recent years for a variety of reasons: the increase in governmental control of information; increased need for funding of political campaigns; methods employed by government and failure to enact legislation, to provide adequate controls and transparency; the commercialisation of government services and projects; the development of lobbying; and the failure to stop or control the flow of Ministers and their staff to the private sector. Similarly the flow of Ministers and their staff to the lobbying industry on retirement from their positions.
All of the above are simply part of the reason for the distrust building in the community directed at Government and the Public Service.
3.Are the present defences adequate?
(i)The principal body claimed to make a National Integrity Commission unnecessary, is the Australian Commission for Law Enforcement Integrity (ACLEI). Its role is to support the Law Enforcement Integrity Commissioner detecting and preventing corruption in law enforcement bodies, such as the Australian Crime Commission, the Department of Immigration and Border Protection (DIBP), the Australian Federal Police, Austrac and the Department of Agriculture. The scheme of the Act requires the head of each department to report to the Integrity Commissioner any instance of corruption discovered in the relevant department, which will then be investigated by ACLEI, which has about 40 staff. ACLEI does not have jurisdiction over most public servants, Members of Parliament, their staff, the judiciary or most Federal bodies or persons making decisions or providing services involving the expenditure of public funds in the Commonwealth. Government’s approach to preventing corruption by this body has been that no single body should be responsible, rather that there should be a range of bodies and governmental initiatives to promote accountability and transparency. The shared responsibility relies on the obligation imposed on each agency to refer misuse involving corruption to the Integrity Commissioner.
Since the Government’s approach to corruption involves no single body being responsible, it follows with shared responsibility that each body is likely to assume all is well because someone else is making sure nothing corrupt is occurring. Corruption can fall through the gaps. Relying on cooperation between a range of bodies covering only part of the activities of the Commonwealth was never a satisfactory approach to preventing corruption in the Federal area and has been shown to be completely ineffective.
(ii)The Australian Federal Police
The AFP is principally concerned with criminality in the Federal area, and particularly such matters as drug trafficking and counter terrorism. A Sydney Morning Herald investigation in 2011 led to the researcher, Linton Besser, concluding that the AFP were reluctant to deal with fraud matters and would only deal with official misconduct which touched on criminality at the top end of the spectrum, because it had other priorities. There is no evidence of the AFP having discovered any serious examples of corruption, which, as previously noted, is usually hidden and difficult to discover. It requires highly trained investigators with specialised knowledge and extensive powers. The AFP is not a suitable agency to investigate corruption in the Federal area. Indeed, the AFP is unlikely to be able to recognise corruption if it fell over it in a criminal investigation.
(iii)The Australian Public Service Commission (PSC)
Substantially the same comments apply as with the AFP. The PSC has a variety of functions, its principal obligation being to lead and shape a unified and high performing Australian Public Service (APS), to give advice to Government on the Australian Public Service, contribute to effective APS leadership and reporting on performance of the APS. It is plainly not a body specialised in investigating corruption or an appropriate substitute for a unified NIC.
(iv)The existing bodies do NOT provide adequate protection. It is essential that there be a comprehensive independent integrity system incorporating a general purpose anti-corruption agency with educative, research and policy functions, and all necessary investigative powers, subject to Parliamentary oversight.
4.What good have Anti-Corruption Commissions ever done?
(i)The Painters and Dockers Commission (conducted by Costigan QC) in the 1980s exposed rampant corruption in the Bottom of the Harbour tax evasion scheme and in the Australian Taxation Office.
(ii)The Fitzgerald Commission in the 1990s exposed very serious corruption both in the Queensland Police Force and the Queensland Government more generally.
(iii)The NSW ICAC exposed the mining licence frauds in the Bylong Valley area, involving the Obeid family and the NSW Minister of Mines, and a series of corrupt activities in land development and municipal council decisions, as well as a variety of improprieties in election funding.
(iv)The Victorian IBAC, at a time when most Victorians believed that their State was corruption free, exposed serious fraud in the investigation of both the Education and Transport Departments and serious police misbehaviour in Ballarat.
(v)The Anti-Corruption Commissions in Hong Kong and the United Kingdom have both operated effectively for decades in their respective communities.
5.Conclusion
The second National Action Plan should include a Commitment to build on Commitment 4.2 - National Integrity Framework in the first National Action Plan. The Commitment should be to establish a comprehensive and powerful corruption control agency with powers to investigate alleged corruption in in the exercise of any Commonwealth function or expenditure, to come into operation not later than 1 July 2020.
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Accountability Round Table
(b Electoral Integrity.
Political Donations & Lobbying
The first National Action Plan raised the issue of confidence in Australia’s electoral system and political parties. However, it appears action in these areas relate primarily to the work of the Joint Standing Committee on Electoral Matters (JSCEM), which is not an initiative of Australia’s Open Government Partnership (OGP) National Action Plan (NAP).
It is pleasing to see that the Government’s proposed Consultation for Australia’s Second Open Government National Action Plan 2018-2020 highlights public sector integrity as one of five areas it will focus on in the coming two years. Unfortunately, the ideas put forward for addressing public sector integrity are extremely vague, but perhaps that is because the government intends to respond positively to suggestions from civil society before it broadens what will be addressed in NAP2.
In the interest of a truly robust open government partnership, in which National Action Plans deliver ambitious “action across a broad spectrum of important areas for government”, the Accountability Round Table (ART) anticipates that the final NAP2 will include a detailed and totally revamped approach to the Federal political campaign finance regime. This is necessary if a reformed regime is to deliver to the Australian community an “open, transparent and accountable” system that is capable of going some way to restoring public trust in members of parliament and the electoral system that grants them the privilege of representing the Australian people.
To assist in achieving the goal or restoring trust, ART wishes to see the NAP2’s focus in the area of public sector integrity considerably broadened. For example, it must include an examination into all aspects of lobbying and lobbyists.
Consultation with civil society also needs to be improved in the NAP2. In NAP1 interactions with civil society in the area of political donations was heavily reliant on inquiries conducted by JSCEM (submissions to and appearances before the JSCEM). There did not appear to be a meaningful attempt to extend the OGP’s reach so that it included the broader community. This, ART argues, needs to be part of the NAP2.
2. Matters and Issues arising from the Consultation Document
Public Sector integrity ART- Matters arising from Consultation Document.
This response takes up aspects of NAP1 Commitments 4.1 and 4.2 that will be considered within the Australia’s Open Government Partnership for inclusion in the proposed NAP2. It will be recalled that consultation is yet to occur between Government and Civil Society under NAP1 on those Commitments.
It is pleasing to see that the Government’s statement highlights Public Sector Integrity as an area for inclusion in NAP2. It is also pleasing to see that the material provided includes the two most serious corruption risk areas – the operation of our Government and the operation of our political campaign finance, election and lobbying systems.
The introductory paragraph in the statement provided by the Government on the topic states:
“Australia is a country with some of the highest standards of integrity in government, and we are taking effective action against the risk of corruption.”
We have many ways to prevent, detect, investigate and address claims or perceived corruption across the different parts of our government. This includes internal processes, laws, and appropriate powers to investigate wrongdoing.”
That statement is true but only because it includes States like Queensland and New South Wales which have robust anti-corruption bodies and reformed political donations regimes. We will not, however, be putting forward proposals that relate to State and Territory governments, only for the Commonwealth. The task at hand is, and should be, to consider the Commonwealth system for addressing its two most serious corruption risk areas, the accountability of the Commonwealth Government and all elements of the Commonwealth election system and processes,
To meet our commitments under the Open Government Partnership Articles of Governance we must “fight corruption” (p. 2) and have “robust anticorruption policies, mechanisms and practices” (p. 21). We must also be “ambitious” and “go beyond” our “countries current practice” (p. 3). Under the “Open Government Declaration”, we have also committed to having robust anti-corruption policies, mechanisms and practices, ensuring transparency in the management of public finances and government purchases, and strengthening the rule of law” (ibid, p 21 “)
All these are necessary if a reform regime is to deliver to the Australian community an “open, transparent and accountable” system and make any progress in restoring public trust in government, including the Members of Parliament and the electoral system that grants them the privilege of representing the Australian people.
If we are to achieve this, we must
- examine the State and Territory Government’s anti-corruption systems as they relate to the accountability of their government and electoral systems
- identify best practices in minimising the risks of corruption in those areas and
- consider whether current practices can be improved.
We should also consider how best to ensure that the system introduced is kept under appropriate review.
There is considerable community concern at present about these matters. The vast majority of our community, however, are unaware of the Open Government Partnership because they have not been informed adequately by Government, and the experience of the co-creative consultation to date has been confined to the very few organisations and individuals aware of our Open Government Partnership. These organisations were already known within government. The Open Government Partnership needs to reach beyond such organisations.
In preparing NAP2 the government and civil society members participating in the OGP should be giving serious consideration to how we can enable more Australians to become aware of our OGP Partnership and participate in it.
See also comments submitted in relation to the proposed task “Trust”
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Accountability Round Table
B. Access to Government Information
1. Submission
Freedom of Information