Reflections on a watchdog finding its feet and standing its ground

By Stephen O'Bryan

Monday January 8, 2018

While I don’t intend to specifically comment on the consideration of a federal anti-corruption agency, I believe my observations about our experience at the state-level should be of interest to those considering strengthening our national integrity system.

When IBAC was established, the legislation was heavily panned by both the then-opposition and a variety of commentators, with the running theme being that IBAC was likely to be ineffective due to the restricted nature of its investigative powers. IBAC’s police oversight powers were not an issue, as IBAC was essentially given the same very broad powers that the former Office of Police Integrity had to investigate police corruption and misconduct. However, IBAC’s power to investigate corrupt conduct in the broader public sector was quite a different story.

The original definition of corrupt conduct in our act was quite narrow, as it needed to involve proscribed criminal offending, but did not include one of the most obvious forms of serious criminal offending for a public official, being misconduct in public office, or MIPO. Notwithstanding, the offense of MIPO is a principled one within the law. There was apparently the view within government at the time that it was too vague and uncertain in nature to be entrusted to us.

Not only could IBAC not investigate alleged serious MIPO, but on a strict reading of our act, we could not investigate things like serious conflicts of interest, which in our experience often asks criminal behaviour; nepotism; other unreasonable or suspicious favoritism; internal deception or other unconscionable behaviors, such as undue influence, as well as other corporate corruption of proper process that while not amounting to criminal offending, would meet ordinary definitions of corrupt behavior in the public sector.

Moreover, the threshold for commencing investigations into public sector corruption was legislated in vague language, where the conduct in question had to be serious corrupt conduct, but with there being no legislative definition of serious.

Also, there was the requirement where IBAC needed to be reasonably satisfied, based on facts, that if proven at trial, beyond reasonable doubt, it would establish an offense had been committed.

Needless to say, there was substantial expert commentary around what this might mean. In particular, whether at one extreme it meant that, before IBAC could investigate, it needed to be provided with all the evidence one would need to find during an investigation, before making any findings of corrupt conduct.

Commentators at the time were also concerned, as was I, with the potential for such vague language to land us in regular court challenges, thereby thwarting effective and timely investigation of serious matters.

The watchdog finds its feet

Compare the situation with that of Singapore and Hong Kong, where their long-established anti-corruption commissions are able to, and do, investigate the mere whiff of corruption, as they term it, to ensure public confidence in government. Indeed, in many parts of the world, the most effective anti-corruption agencies have jurisdiction to also investigate corruption in the private sector, regardless of its connection with the public sector, on the understanding that public and private sector corruption are two sides of the one undesirable coin.

So, when IBAC commenced it was in the environment of claims that, due to the legislation, the commission was a toothless tiger and designed to fail.

In some respects, this view, coupled with an oft-cited opinion from within the public sector that there was no corruption in Victoria, actually helped us in our early days. Because the external expectations of us uncovering corruption were low, we could quietly go about our business, including focusing on the major task of establishing the agency from the ground up.

It also worked in a motivational way for us in those early days, as we accepted the challenges ahead and worked internally to band together to set out to prove the commentators and naysayers to be wrong.

We took the view that the Victorian parliament contended for a pragmatic interpretation of our highly restrictive and often vague legislation to be applied, so our primary objective — investigating and exposing serious corrupt conduct — would be achieved.

We did not shy away from tackling the challenges I have described that were embedded in the act. Rather, we quickly commenced a range of investigations into alleged serious public sector corrupt conduct, alongside our police misconduct investigation work.

Success with public hearings despite restrictive legislation

We collated practical examples of the limitations of our legislation, with the view to building a strong case for change, so as to improve the ability of IBAC to more effectively achieve its purpose. In my view, it would’ve been counterproductive for us to publicly critique the legislation, which had been put in place by parliament, before we had these clear case examples of the limitations of the legislation.

Many of you may be aware that in our early years … IBAC has been successful in exposing serious and systemic corruption in some of the largest Victorian departments, such as Transport, via our Operation Fitzroy, on which we reported to the parliament following our first public hearings in 2014, and education, with our Operation Ord and Dunham public reports that followed public hearings in 2015 and in 2016, respectively.

We have also exposed serious corruption in other state government agencies and local councils, with findings around these investigations included in several IBAC special reports, as well as in our annual reports and in published summaries on our website.

So far, we have held four public hearings. Our experience is that public hearings are very effective in terms of exposing corruption, and encouraging credible complaints of improper conduct, as well as driving speedy reform in the public sector. However, like many of the provisions contained in our act, the provisions around our holding public hearings are very restrictive.

The default position is one of private hearings, with public hearings only allowed if certain public interest tests are met, and then, moreover, if the circumstances are exceptional — another undefined term, I might add.

Vindicated by legal challenges

While the predictions that there would be frequent court challenges made to the legitimacy of IBAC commencing investigations have so far proven incorrect, an active area of challenge for IBAC has been around our coercive public hearings, which are conducted in the style of public inquiries. We have had numerous challenges, mostly in private, from lawyers representing parties, contesting the legitimacy of our public examinations, and we have publicly fought out one challenge in the courts, involving two members of Victoria Police in an investigation known as Operation Ross.

The Operation Ross challenge turned out to be a lengthy saga, ending up in the High Court. Unfortunately, this delayed by over a year, an important investigation involving serious police misconduct. However, importantly, in terms of what was decided, in particular in a Court of Appeal, it validated IBAC’s general approach to public hearings.

And importantly, it confirmed at High Court level, our coercive examination powers in situations where a person of interest is yet to be charged with a criminal offense but is reasonably suspected of having committed one.

Operation Ross examined alleged systemic excessive use of force by police officers stationed at Ballarat police station in regional Victoria. Our public report was tabled in November 2016, and followed public hearings conducted in Ballarat six months earlier. [When prosecutions arising from IBAC operations went before the courts, its public reports and the hearing transcripts were taken down from its website.]

The good news for us is that our legislation has since been amended, making it easier for IBAC to start corrupt conduct investigations. These amendments followed our strategy from earlier on in my turn as commissioner, where we flagged an intention to report to parliament, after 12 months of being fully operational, on aspects of our legislation and application of the new legislation.

We intended to articulate the challenges and have a crack at a number of the restrictions and vagaries that I have already mentioned, with the aim being to garner support for legislative change.

Reform wishlist only partly fulfilled

In our special report of April 2014, we published a blueprint for desired change. This included the call for an introduction of a requirement for public sector agency heads to mandatorily report suspected corrupt conduct.

At that time, corrupt conduct notifications by government agencies, other than Police, were merely voluntary. One effective thing we did was to place it on public record that there had been a number of corrupt conduct allegations made during that time, where IBAC had not felt able to commence investigations, because of threshold restrictions in the act. Importantly, we pointed out that not all of these were suitable for referral to other agencies for investigation, meaning that they had to be dismissed without investigation.

In response to our 2014 special report, the then-government, the same one that established IBAC, produced a bill to address at least some of the areas that we had raised. While that bill never got past the tabling stage, due to an impending election, the opposition of the day latched onto the critical weaknesses in our act and promised to deliver change.

The opposition won government, and our act was duly amended in 2016, with changes made, including lowering our investigative threshold from reasonable satisfaction to reasonable suspicion, deleting the need for IBAC to be satisfied by facts proven beyond reasonable doubt, adding MIPO as a prescribed offence, and mandating the heads of public sector agencies to report suspected corrupt conduct to IBAC.

We have so far failed to gain traction, however, on our push to have the significant restrictions around public hearings removed. I’m not an advocate of regular public hearings for the sake of them – IBAC holds just one or two a year – however, I am concerned to lower the risk posed by the expensive delays around challenges to public hearings in the courts, which are caused by vague legislative language.

Prevention is equally important

I’ve focused mainly on how we have used and strengthened IBAC’s legislative powers to investigate and expose corruption. Equally important, however, is that our legislation includes functions around preventing corruption. Under our legislation, we have a comprehensive suite of corruption prevention and education functions to commensurate with anti-corruption agencies nationally.

While there is no issue with the way these are set out in the act, we have had to determine the most effective and efficient way for IBAC to fulfill these prevention functions. Particularly given the size and complexity of the Victorian public sector, which comprises some 3500 entities and more than 300,000 employees.

IBAC’s corruption prevention strategy focuses on three priority action areas:

  • engaging with the community and the public sector to improve understanding of corruption and its harms;
  • improving the reporting of corruption and helping to build the public sector’s capacity to address reports;
  • alerting organizations to the latest information and intelligence to help them stay ahead of corruption risks and build their corruption resilience.

Our corruption prevention efforts are informed by consultation with the key stakeholders and research. They are directed towards sharing information and providing guidance on corruption risks and issues revealed through our expository activities, including our investigations, strategic intelligence, analysis, research and reviews.

These works allow public sector bodies to consider and tailor information to suit their own circumstances. In this way, we’ve worked to ensure our prevention and expository functions work together hand-in-hand.

IBAC’s approach is founded on the core principle that public sector bodies must retain primary responsibility for ensuring their own integrity and corruption resistence. Public sector leaders have a thorough understanding have a thorough understanding of their own organisation systems, resources, operating environments, and risks, and are therefore best placed to develop and implement appropriate integrity and corruption prevention frameworks.

It is not something IBAC can or should do for them.

This is an edited extract from a speech Stephen O’Bryan gave at Transparency International’s inaugural National Integrity Conference in March, 2017.

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