The Mandarin’s 2024 conference: ‘Rebuilding trust and integrity in the Australian Public Service’

I acknowledge the traditional custodians of the land on which we assemble, the Ngunnawal people, and other people and families that have a traditional connection to the lands of this region. I pay my respects to their Elders past, present, and emerging, and to all First Nations people joining us today.

I am very grateful to the organisers of this event, the Mandarin 2024 Conference, for providing an opportunity for the Commission to participate in your discussion about rebuilding trust and integrity in the Australian Public Service. If I may say so, your program today is an exciting and engaging one, and I only wish that other commitments did not prevent me from remaining to hearing the discussions that will follow on some topics which, as I hope you will see from my remarks, I consider of the utmost relevance and importance. 

Today, I will present the Commission’s perspectives on promoting integrity in the Australian Public Service, and some of the lessons that have emerged from the first now nearly eight months of our operations, in particular as they apply to public servants.

I will begin with some views about the place and content of integrity in the Commonwealth public sector. Then, I’ll provide an overview of the Commission and its remit, and our activities to date. Finally, I’ll turn to some of the themes we have seen emerging that are relevant to trust and integrity in the APS, and our priorities for corruption prevention and education for this year.

Integrity in the Commonwealth public sector

Integrity in the Commonwealth public service is critical to ensuring that public power is exercised honestly, impartially and in the public interest.  It is also critical to ensuring that programs that are intended to deliver benefits to the people do so, and are not eroded by the diversion of resources along the way for improper purposes. I have defined integrity, for our purposes, as involving making decisions and giving advice honestly and impartially, on the evidence and the merits, in the public interest and without regard to personal interest; accepting responsibility for it, including for mistakes; and reporting honestly.

In June last year, as I was about to commence my work with the Commission, I observed that the integrity landscape today in the Commonwealth is quite different from that which Ian Temby encountered when he established the first corruption commission in this country – the New South Wales Independent Commission Against Corruption – 35 years ago.  Since then, there has been a sea change in the tolerance of the public, the press and the public service for corrupt conduct.  I also said that I did not believe we were beginning in an environment devoid of integrity – that it was already a strongly espoused value of the APS, with a firm basis.  I still hold to those views; but, concurrently with the advent of the Commission in July last year, we saw the emergence of a number of significant integrity issues, some concerning the APS and some pertaining to consultants.  The nature of those issues illustrates the point: we are no longer dealing with bribes of cash in brown paper bags, but with misuse of information and access, or lapses in ethical decision making.

A good starting point for public servants is to remember that their duty is owed to the Government and People of the Commonwealth. That is not to deny that the role necessarily involves supporting the Government of the day to achieve its intent, within lawful constraints, rather than finding obstacles to their doing so: the Government of the day represents the people of the Commonwealth, and is entitled to implement its policies, within the law.  But that does not extend to circumventing the laws, which constrain governments as they do individuals; nor to extracting private benefits from their decisions.

Balancing these considerations is no easy task. It is an inevitable consequence that public servants will sometimes face difficult ethical dilemmas or questions of conscience.

How they respond to those dilemmas is determined more by organisational culture than by policy and protocol.  Culture is the sum total of ways of living built up by a group of humans, which is transmitted from one generation to another.  It establishes accepted bounds and decision points for behaviour.  It provides organisational norms and boundaries for value-based decisions that affect the group and the society in which it operates. It is what people do, not what formal policies might tell them to do. 

Leaders in the APS are instrumental in shaping a public service that demonstrates integrity in everything it does.  Leaders must foster in our institutions, from the top down and at every level, a culture in which decisions are made and advice is given honestly, impartially and in the public interest; in which matters are reported honestly, without embellishment or exception; in which staff feel free to speak up when appropriate; where constructive criticism is welcomed; where honest if unwelcome advice and reports are not dissuaded, but encouraged; in which  responsibility is accepted, including for the inevitable mistakes; and in which the careers of officials who adhere to those values and do not always follow the line of least resistance, are seen to prosper.

Leadership involves instilling a culture in which subordinates feel safe to adhere to these precepts. 

Integrity also involves taking early responsibility for mistakes, learning from them, and above all implementing action to rectify what can be put right.  Mistakes are inevitable; we all make them.  But integrity issues arise from seeking to avoid responsibility for mistakes.  It is almost always the coverup, not the initial error, that causes grief. This is particularly prevalent in organisational cultures in which it is perceived that the honest reporting of bad news will be unwelcome.  I say perceived, because often it is not in fact the case, and the superior will never have intended to create such an impression; but it is easy to overlook how intimidating senior leaders are seen to be by junior subordinates, by virtue of the standing, status and authority implicit in their position.  It requires active engagement with subordinates – and demonstration by the outcomes for others who do the right thing – to convince them that they are safe to reporting wrongdoing and confess errors. 

And while I adhere absolutely to the principle that leaders are responsible for what happens on their watch, even if they are not aware of it, it does not follow that when a mistake is made, heads must roll.  As I have elsewhere observed, a culture in which for every mistake there is a demand for a sacrificial head positively discourages people from acknowledging their mistakes, taking responsibility for them, and rectifying so far as they can what can be put right.

As we reflect on the role of leadership in enhancing and cementing integrity across the Commonwealth public service, I think it’s worthwhile to refer to one of the proposed amendments to the Public Service Act currently under consideration, which is to introduce a new APS value - stewardship.  

This proposed new value aligns with the view I have just outlined. At the core of the notion of stewardship is the idea that it is your responsibility to care for the agency you have joined, and when you come to depart, to leave it better and stronger than when you inherited it. It gives priority to the welfare of the organisation, rather than the career of the individual. 

Stewardship is also related to the existing value of accountability. Ethical leadership involves being prepared to be accountable, not avoiding be held to account. Accountability includes for success in achieving outcomes  – not only in the short term, but also in the long term; it also includes the welfare of subordinates; compliance with law, good governance, and morality; and reputational impacts – those of the agency, the service, the government and the nation, not just your own. 

An overview of the Commission

The National Anti-Corruption Commission commenced operations on 1 July 2023. The Attorney-General, the Hon Mark Dreyfus KC MP said last month, that the National Anti-Corruption Commission is “the most significant Commonwealth integrity reform in at least a generation.”

The historic legislation which establishes the Commission – the National Anti-Corruption Commission Act 2022 – was enacted following the convergence of several streams. First, and foremost, the clearly expressed will of the Australian people at the last federal election, for an independent anti-corruption body with broad jurisdiction in respect of the Commonwealth public sector. Secondly, a government with the mandate to act on that desire, and an agenda to strengthen integrity across the Commonwealth public sector. And thirdly, the leadership of the Australian Public Service, which embraced the objective of embedding a pro-integrity culture at every level.

The mission of the Commission is to enhance integrity in the Commonwealth public sector, by deterring, detecting and preventing corrupt conduct involving Commonwealth public officials, through education, monitoring, investigation, reporting and referral.

The Commission’s jurisdiction is concerned with corrupt conduct that involves Commonwealth public officials. That term includes Parliamentarians, and staff members of Commonwealth agencies. In turn, the definition of staff member of a Commonwealth agency includes not only individuals employed by the agency, but also those engaged in any way in assisting the agency, and individuals involved in delivering services to or on behalf of the Commonwealth under a contract. In light of the extent to which government has in recent years retained external consultants, and the extent to which the delivery of many Commonwealth services has been outsourced to contracted service providers, this is a large field, which I expect will attract considerable interest from the Commission in the months and years to come.

A public official engages in corrupt conduct if they breach the public trust, abuse their public office, or misuse official information. In addition, any person – not limited to public officials – engages in corrupt conduct if they do something that could cause a public official to behave other than honestly and impartially in performing their public duties. And the definition of corrupt conduct extends to attempting, conspiring or planning to engage in any of those types of conduct, even if it is not implemented or successful, or participating in another’s corrupt conduct.

Corruption is essentially about the misuse of public power, position, privilege or property, at least usually for private purposes. It results in the diversion of public resources, and the undermining of trust in our public institutions. Although it is not the only form of corrupt conduct within the definition, breach of public trust lies at its core. The concept of public trust recognises that public powers are conferred on public officials for the public benefit; and it will be a breach of that public trust – within the definition of corrupt conduct – if a power is not exercised honestly for the purpose for which it is conferred.

Often overlapping with breach of the public trust, it will be an abuse of office for a public official to use their powers or office improperly to obtain a benefit for themselves or to inflict a detriment on someone else.

However, it is crucial to recognise that mere mistakes, incorrect decisions, and even negligent maladministration, are not in themselves corrupt conduct. Generally, an element of dishonesty, and/or personal benefit (for the perpetrator or another) is necessary to make it corrupt.

It is also important to realise that the Act does not legislate new standards of behaviour. The conduct it characterises as corrupt conduct has always been regarded as improper, at least by right-minded people. The difference is that now there is an agency with the function and powers of detecting, investigating and exposing it. This is important, because it means that individuals who are already behaving properly do not need to learn and adapt to new behavioural framework. The Act is a means for upholding standards of integrity and conduct that already exist.  For that reason it is entirely appropriate that our jurisdiction rightly includes corrupt conduct that occurred before the Commission’s establishment.

Anyone can refer a matter to the Commission. Agency heads must refer corruption issues of which they become aware, if it concerns the conduct of a staff member of the agency, and the agency head suspects that the issue could involve corrupt conduct that is serious or systemic.  We can also investigate matters of our own motion.

There are powerful protections, from liability and reprisals, for anyone who refers a corruption issue or provides information or evidence to the Commission. Corruption is by its very nature conducted in and dependent upon secrecy. Its hallmarks are confidential communications and inscrutable exercises of power. For this reason, whistleblowers play a critical role in exposing corruption, and in bringing those responsible for it to account. 

So, a person who refers, provides information about, or gives evidence to the Commission about a corruption issue, cannot be subject to any civil, criminal or administrative liability (including disciplinary action) for doing so, and no contractual or other right or remedy can be enforced against them. This includes (but is not limited to) absolute privilege in proceedings for defamation, and protection from termination of employment for making the disclosure. These protections override all other laws of the Commonwealth.  Referrals can be – and many are – anonymous. 

At the Commission we triage and assess referrals to determine whether they are within jurisdiction, whether they raise a corruption issue, and if so whether and how to deal with them. To help decide whether and if so how to deal with a matter, we can conduct preliminary investigations, in which we can exercise some of our powers to compel production of documents and provision of information.

We can deal with a corruption issue, by:

• Investigating it, solely or in conjunction with another agency, if it could involve corrupt conduct which is serious or systemic.
• Referring it to another agency; or
• Taking no further action.

In an investigation we have extraordinary powers: to require production of documents and information; to summons witnesses for examination on oath or affirmation at hearings, ordinarily in private but in exceptional circumstances in public; and, under warrant, to intercept communications and use surveillance devices.  Information and evidence cannot be withheld from us on grounds of legal professional privilege, or public interest immunity; nor can it be withheld under the privilege against self-incrimination, but evidence obtained in those circumstances cannot be used against the witness by whom it is given in a criminal prosecution of that witness. 

We will not and cannot investigate every matter that is referred to us, nor even every matter that raises a serious corruption issue. There are many filters: first, does the matter involve a public official? Next, could the conduct amount to corrupt conduct? If so, could it be serious or systemic? We prioritise our effort, usually according to the gravity and scale of the conduct, and whether an investigation is likely to add value in the public interest. For example, where a matter has already been fully investigated and exposed in another forum, or another process can provide remedies that we cannot, it may not add value to conduct another investigation simply to characterise the conduct as corrupt. On the other hand, where other agencies might encounter obstacles in gaining access to information, our extraordinary powers may be a reason for conducting an investigation. And sometimes, the value may lie in “clearing the air”; providing a conclusion that there was not corrupt conduct, where there has been an allegation or perception of corruption, may assist in restoring public confidence and reputations.

An important corollary of this is that just because we open an investigation does not mean that we necessarily think there is corruption to be found. 

At the conclusion of an investigation, the Commission reports to the Attorney-General.  The report may contain a finding that a person has engaged in corrupt conduct.  That is in administrative finding of fact, not a finding of criminal guilt, to which different standards of proof and protections apply.  The Commission can also make recommendations.  Under section 15(2) of the Public Service Regulations 2023, it is a ground for the termination of the employment of an APS employee that a NACC investigation report includes a recommendation to terminate the employee’s employment.  But that refers to a final report after an investigation in which the employee has been afforded procedural fairness. Of course, an agency might appropriately take precautionary action at an earlier stage, but that must depend on its own assessment of the risk involved, on the facts known to it. The mere pendency of a NACC investigation is not, and should not be, a sufficient basis. The legislation that governs us requires that ordinarily our proceedings be conducted in private, chiefly to avoid the  risk of unfair and premature damage to reputations that can be caused when unproven allegations of corruption are publicised.  It is a mistake to think that the opening of an investigation of itself provides a basis for taking action against a staff member.

Where the Commission has held a public hearing, the report must be tabled in Parliament. The Commission can also publish reports, if satisfied it is in the public interest to do so. The Commission favours transparency wherever possible, but is also conscious of the potential unfair impact of publishing reports in some circumstances. 

Our first 7 months

To date, our operational efforts have been focussed on receiving and assessing reports of corruption. This began on day one.  Increasingly, as these referrals are triaged and assessed, our main effort is shifting to the conduct of investigations.

Up to 18 February 2024, the Commission had received 2,534 referrals of suspected corrupt conduct, overwhelmingly voluntary referrals from members of the public.  Nearly 80% were excluded at the triage stage, because they did not concern a Commonwealth public official or did not raise a corruption issue.  In the assessment process we have opened 18 preliminary investigations, of which five have been completed, each resulting in a conclusion that no corruption issue arose.  We have opened 13 corruption investigations, four of them jointly with other agencies, and we have referred 5 corruption issues to other agencies for investigation.  In 220 cases which passed triage, we have decided to take no further action.  Typically, this is because  there are insufficient prospects of finding corrupt conduct, or the matter is already being adequately investigated by another agency, or a corruption investigation would not add value in the public interest.  We are also progressing 7 active investigations that were commenced by the former Australian Commission for Law Enforcement Integrity.

Emerging themes

It will be apparent from the statistics I have already quoted that the public perception of corruption greatly exceeds the actuality. That is not a cause for complacency, for two reasons: first, because the perception bespeaks a lack of trust and confidence in our institutions; and secondly, because there is still an actuality that underlies it

So far as concerns the APS, there are two dominant domains in which we are seeing both perception and actuality of corrupt conduct. They are procurement; and recruitment and promotion.

Concerns in both those areas relate to: the preferring of family, friends and associates; and misuse of official information to gain an advantage.

While in respect of selection and promotion, many complaints are really grievances by disappointed applicants who cannot accept that others succeeded on merit, not all can be so dismissed.  It is not necessarily corrupt to support the selection of someone you know.  It is inevitable, especially in specialist fields, that some applicants might be known professionally to decision-makers.  But it depends on the nature of the relationship.  I do not think that, at least in most circumstances, a professional relationship presents a problem. However, a close personal relationship, and even more so a family relationship, does. 

In the field of procurement, it is important to appreciate that mere compliance with the rules does not mean that conduct is ethical. The fact that there might be circumstances that justify a limited tender process does not mean that you can ethically award the contract to your best mate who is the sole provider approached. In particular, contracts for a value just under the threshold for a limited tender process tend to be a red flag. 

Our corruption prevention and education priorities

The ancient adage that ‘Prevention is better than cure’ is especially true in the context of corruption, because the world’s best investigation and enforcement processes can rarely recover the whole of what is lost through corrupt conduct.  Through our prevention and education functions, we can help agencies and governments avoid deviating from the integrity track, and I consider this a very important aspect of our role. 

Our corruption prevention and education agenda is firmly focussed on enhancing integrity in the Commonwealth public sector, including the APS.  We are approaching this along four routes.

• First, we seek to provide those who might be exposed to potentially corrupting individuals and influences – essentially, decision-makers – with the wherewithal to recognise and resist them. 
• Secondly, we seek to encourage individuals who may become aware of corrupt conduct to report it, and to ensure they know how to do so, and of their rights and protections.
• Thirdly, through building awareness in the public sector, officials and the public about corrupt conduct, corruption risks and vulnerabilities, we seek to reinforce a culture in which corrupt conduct is considered unacceptable and not tolerated by individuals, institutions and communities.

To these three ends, we have so far made 71 presentations to stakeholders across the Commonwealth public sector: starting with parliamentarians, agency heads and senior public servants, and extending to other stakeholders, including relevant professional associations and civil society organisations.

Fourthly, we can conduct public inquiries into corruption risks and vulnerabilities, and measures to prevent corruption, in Commonwealth agencies.  As an extension of this, we are establishing an audit and monitoring function, to examine and audit  the processes and procedures of Commonwealth agencies for corruption risks and vulnerabilities. 

We have identified three areas of thematic focus for our corruption prevention and education work in 2024. These are:

• Conflicts of interest:  Everyone in public life will sometimes encounter situations where they may have a private material or personal interest or connection that is relevant to their public duty.  Not every such conflict results in corrupt conduct; most do not.  Yet at the heart of almost every case of corruption is a conflict of interest.  I do not believe you can or should try to prohibit conflicts of interest; they are inevitable.  The conundrum is identifying when they arise, distilling and explaining when an interest or relationship becomes problematic, and understanding how they should be managed, to avoid them developing into integrity issues.  I do not believe that this has been satisfactorily undertaken so far, and our first focus is on remediating this, to provide guidance to the public sector on managing conflicts. 
• Ethical decision-making: Recent controversies, such as Robodebt, have placed renewed emphasis on the challenges that can confront public servants in an environment where the public service is expected to be responsive to the Government of the day.  Ultimately, reinforcing the decision-making process must be a central pillar of anti-corruption efforts.  That is because corruption involves subverting the public decision-making process to serve a private purpose.  So decision-makers are a key audience for anti-corruption efforts, and equipping them to exercise their functions ethically, in an environment where they can be many pressures, is vital.
• The Electoral Process: With a federal election due in not much more than a year, it is timely to focus on issues that are likely to arise in the context of an election, so that we can provide guidance on the corruption vulnerabilities.  The Commission will produce guidance concerning corruption risks and vulnerabilities associated with issues such as grants, political donations and fundraising, foreign interference, government advertising and appointments.

Conclusion

We commenced our work in 2023, the same year the revelations of the conduct of firms retained as consultants to government set off shockwaves across the public service and the public. The concept that contractors used by a government agency to serve the people would misuse their position to advance their private interests, became part of a broader reckoning with questions of good governance, administration of contracts and public trust in institutions.

At much the same time, the circumstances surrounding the Robodebt scheme were exposed in last year’s final report from the Royal Commission. I wish to be clear that I am not to be taken as characterising all or any of that conduct as necessarily corrupt.  However, at the least it exposed defects in the decision-making process. This has already prompted reform across the Commonwealth landscape.  One that relates closely to what I have said about culture is to base the performance assessment of SES officers on behaviours as well as on outcomes.

At the outset I spoke about culture. It is interesting that a recent study of outcomes of whistleblowing reported a poor association between the outcome and organisational policy, but a strong association with organisational practices, which were founded in organisational culture.  It is not through policy, but through embedding a culture of the kind that I have described, that we will rebuild trust and enhance integrity in the APS.