What should a federal ICAC look like? The hypothetical long arm

By Gabrielle Appleby & Grant Hoole

Friday April 29, 2016

A national anti-corruption watchdog is again being debated in Canberra, thanks to cross-bench senators who established a Select Committee inquiry in February. While neither major party is actively behind the proposal, the committee’s hearings and report – which it hopes to deliver in interim form before the election – provide an opportunity to debate important questions of need and design for such a body.

Is there a genuine need for a new integrity commission to target corruption within the federal government and Parliament? Or can these objectives be met by tinkering with and expanding the jurisdiction and powers of existing institutions? There are, in fact, many important and powerful anti-corruption institutions at the federal level including the  (ACLEI), the Commonwealth Ombudsman, the Australian National Audit Office and the Australian Public Service Commission.

The challenge is to determine whether these bodies provide a sufficient web to catch instances of corruption and – just as importantly – to instil public confidence that high standards of integrity are observed throughout the Commonwealth public service.

“There are obvious gaps in the jurisdiction of existing national integrity bodies.”

The ACLEI is a powerful body, but is limited to investigating law enforcement agencies and officers. Further, it is widely unknown to the public, so its capacity to enhance public confidence in government administration is necessarily hamstrung.

The Ombudsman can’t investigate ministers, and lacks the powers usually associated with a powerful anti-corruption body such as New South Wales’ much loved (by the public if not the politicians) ICAC. It may also suffer from the perception of being toothless, at least partly because it achieves many important resolutions behind closed doors.

The auditor-general is powerful and robustly independent, but can only engage in systemic performance audits rather than investigate individual complaints about corruption.

The APSC has an important mandate to foster high standards of conduct in the public service, but its inquiry functions are limited, and its jurisdiction doesn’t reach political actors.

Even if the Commonwealth were not convinced to introduce a shiny new integrity commission, there are three more modest – and we would even say relatively uncontroversial – improvements that could be made to the existing institutions immediately.

Three modest and uncontroversial improvements

First, to address the incongruous position that there are no institutions with the specific goal of fostering integrity within Parliament itself, the Commonwealth should appoint an independent parliamentary ethics officer. They should be tasked with providing parliamentarians with confidential ethical advice around issues that arise in the performance of their duties, including questions about conflicts of interest and expenses.

Second, there is an urgent need for a handbook to help public servants and the public understand and navigate the existing mechanisms. A consequence of federal accountability measures being diffused among many institutions – which the government claims is one strength of the federal system – is that the role, or even the existence, of some institutions is not well known. A single point of clear, accessible information on the operation of this framework would be a significant improvement on the current situation.

Third, all of the existing major integrity institutions must be given budgetary security. The government’s defunding of the Office of the Australian Information Commissioner after the Senate refused to pass legislation abolishing it serves as a timely and grave reminder of how a government can emasculate statutory oversight bodies that have fallen from favour. In this respect, all integrity institutions should be given the same budgetary security as that enjoyed by the auditor-general, whose budgetary appropriations may only be adjusted by Parliament.

If it is ultimately decided that a brand new integrity commission is warranted, the Commonwealth needs to think carefully about a number of design features for such a body.

Key questions of institutional design

One of the first questions concerns breadth of jurisdiction. Should a commission investigate all forms of misconduct, even that falling short of criminal conduct? Should it be limited to investigating potential criminal conduct only? Or should it be even further circumscribed to investigating only serious or systemic corrupt conduct?

Any new commission would be operating in the context of other existing federal investigatory and integrity mechanisms. Presumably, it would be granted extraordinary investigative powers like a Royal Commission, allowing it to make serious incursions into traditional legal protections and fundamental rights. As such, there is a strong argument that a commission should not be able to wield these powers in the investigation of non-criminal matters or even minor criminal matters.

The nature of these powers is such that they are only justified where a commission is investigating serious criminality or widespread patterns of misconduct with the potential to significantly undermine public confidence in government.

Addressing the ‘Cunneen question’

Should a national integrity commission have the power to investigate conduct of a third party (that is, not a public official) who might influence a public official’s capacity to conduct their duties properly?

The High Court in 2015 held that the NSW ICAC’s jurisdiction was limited to investigating wrongdoing on the part of a public official. The NSW Parliament then amended the ICAC’s governing statute to extend its powers to investigating third-party conduct as well.

“There is a strong argument that third-party conduct should fall within the jurisdiction of a new national commission.”

This ensures ICAC can investigate the conduct of individuals implicated in defrauding a public official, or in collusive tendering practices for government contracts. Such conduct has the capacity to undermine public confidence in government decision-making, even when it involves no improper behaviour on the part of government officials. It could also affect how taxpayers’ money is spent, how public assets are used, and how equality of access is afforded to government services and contracts.

Thus, there is a strong argument that third-party conduct should fall within the jurisdiction of a new national commission, although this extension should be circumscribed by a jurisdictional focus on serious and systemic corruption, which will help limit the application of highly incursive investigative powers.

Closing the gaps and filling the cracks

The question of who a commission can investigate doesn’t end with third parties. There are obvious gaps in the jurisdiction of existing national integrity bodies, as described above.

In contrast, state anti-corruption commissions are usually granted broad jurisdiction to investigate government, parliamentary agencies and elected officials, other integrity institutions, and often government contractors. One of the strong justifications for creating a new national integrity commission would be to cover federal officials who currently fall between the cracks.

We would note, however, that there is a difficulty at the federal level in extending the jurisdiction of a commission to the investigation of judges. Constitutionally, the independence of the federal judiciary is insulated from the other branches of government, and an integrity commission, likely appointed by the government and Parliament, would probably breach this limitation.

That’s not to say that a carefully crafted judicial complaints and disciplinary body could not and should not be introduced at the federal level – but it needs to be a separate project from the establishment of a national integrity commission.

It is axiomatic that any integrity commissioner must be independent and trusted as impartial by both the public and those who may fall under scrutiny. As such, it is appropriate that both the government and the Parliament have a role in the commissioner’s appointment and removal. Removal should be allowed only on limited grounds. Remuneration should be guaranteed not to be reduced during the commissioner’s term.

Further, because so much rests on the commissioner’s good judgement – in making decisions about whether to conduct an investigation, hold a public hearing, or withhold information from the public domain – the appointment should be made following a transparent, merit-based process. A list of merit-based criteria for appointment should be carefully formulated and specified in legislation.

Public hearings and parliamentary oversight

One of the most vexed questions that arises in relation to the design of a commission is that of public hearings. The holding of public hearings by an investigatory body with the power to compel the production of documents and the testimony of witnesses in circumstances where the ordinary safeguards – including many of the traditional privileges and the rules of evidence – do not apply, is exceptional and dangerous.

It has the potential to destroy the reputation of individuals, compromise ongoing investigations, and prejudice future court cases. Superficial media coverage may cast the misleading impression that those summoned before the commission are being placed ‘on trial’.

“A narrowly circumscribed power to hold public hearings does not necessarily sacrifice the benefits of publicity.”

There are, however, arguments that public hearings perform an important public educative function, can deter future wrongdoing, and might give rise to new investigatory leads. Any power to hold a public hearing ought to be statutorily circumscribed and the statute ought to provide for a clear, immediate and efficient avenue of review regarding a decision to hold a public hearing.

A narrowly circumscribed power to hold public hearings does not necessarily sacrifice the benefits of publicity. An integrity commission should have the ability to issue public reports, tabled in Parliament. Public reporting can achieve educative and deterrence functions but, in contrast to public hearings, is less likely to result in sensationalised, one-sided portrayals in secondary coverage, particularly in a way that might appear that a commission has engaged in a judicial process, or that individuals have been found ‘guilty’ of corrupt conduct.

Finally, there is the question of overseeing the commission: who will guard the guardian? The answer is that this responsibility should fall to many different actors. An efficient and low-cost system of review should be available for those impacted by the harsh powers of the commission, providing an alternative to costly and time-consuming applications to the courts.

Judicial involvement nevertheless remains important: both in supervising the exercise of the most extraordinary investigative powers, and in providing a final avenue of review against a commissioner’s findings. Finally, there should be, as exists in most state jurisdictions, a bi-partisan parliamentary oversight committee. This reflects the ultimate accountability of a new commission to the public through their elected representatives in Parliament.

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