National Public Sector Governance Forum 2024

First, I acknowledge the traditional custodians of the land on which we assemble: the Kaurna people of the Adelaide Plains. I pay my respects to their Elders past and present, and acknowledge their continuing connection to country and culture, and the contribution they make to the life of this city and this region.

Thank you for the opportunity to address you all today, in the beautiful city of Adelaide. 

Today, I will talk about what it means to be a guardrail institution tasked with upholding public trust in institutions. Then I’ll describe what we are seeing at the Commission, in terms of the corruption trends and vulnerabilities that have emerged in our first 16 months, and our strategic priorities to address them. Thirdly, I’ll turn to some of the challenges and controversies; first, how we have to balance the desire for transparency with the need for secrecy; the importance of our independence and what that means; and finally, I will touch on the recent report of the Inspector: what it means, how it came about, and how we are addressing it.

The NACC: a guardrail institution

It was the premise of the late Honourable Paul Finn, that ‘the most fundamental of fiduciary relationships in our society is that which exists between the State (and its officers and agencies) and the community (the people)’. The National Anti-Corruption Commission is one of our ‘guardrail institutions’ that constitute the integrity branch of the Commonwealth government. The central role of the Commonwealth integrity branch, of which the Commission forms part, is not merely to prevent corruption, but also to uphold public trust in government. 

The Commonwealth Integrity Branch

The Commission is one of several key, independent yet inter-related components of the Commonwealth Integrity Branch. The ANAO is concerned with monitoring the compliance of agencies with accountability and regulatory frameworks. The Commonwealth Ombudsman addresses complaints by individuals of maladministration affecting them personally. The Australian Public Service Commission maintains the values and standards of the Australian Public Service. The Australian Electoral Commission is concerned with integrity in the electoral process and elections. The Independent Parliamentary Expenses Authority monitors the use by Parliamentarians of their entitlements. I will shortly describe how our role differs.   

Purpose and mission

We were established to provide ‘independent assurance to the people of Australia that corrupt conduct involving Commonwealth public officials is prevented, detected, investigated, and responded to appropriately’.

To generate that effect, we have adopted as our mission: ‘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.’ 

Lines of operation

To achieve that mission, we have two main lines of operation: 

1. deterring corrupt conduct through detection, investigation and exposure 
2. preventing corrupt conduct through education and engagement. 

In at least some corners of the public mind, the Commission’s success is closely connected with its response to referrals of individual instances of suspected corrupt conduct. But individual accountability alone cannot bring about systemic change.

For this reason, the Commission is prioritising corruption prevention and education alongside its investigations. The world’s best investigation and enforcement processes can rarely recover the whole of what is lost through corrupt conduct, so the ancient adage that ‘prevention is better than cure’ holds especially true in the context of corruption. 

While our work preventing corruption through engagement and education may attract less attention and interest than our deterrence and investigation activities, it is no less important, and it has greater potential to bring about system-wide cultural change. I believe we are already seeing this in attitudes across the public sector. 

Corruption prevention strategies

We are approaching corruption prevention through 3 strategies. 

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. This informs work we are doing to develop and provide guidance on ethical decision-making for public officials. 

Secondly, we seek to encourage individuals who may become aware of corrupt conduct to recognise and report it, and to ensure they know how to do so, and of their rights and protections. This involves educating not only the public sector but the community about corrupt conduct, how to report it and the protections available to reporters. 

Thirdly, through building awareness in the public sector, we seek to grow a culture in which corrupt conduct is considered unacceptable and intolerable by individuals, institutions and communities.

The impact of organisational culture

Organisational culture is critical to this. Corruption involves subverting the public decision-making process to serve a private purpose. Recent controversies, including Robodebt, have given renewed prominence to the challenges that can confront public servants in an environment where the public service is expected to be responsive to government. Equipping decision-makers to exercise their functions ethically, in an environment where there can be many pressures, is vital. 

How people respond to ethical 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 the 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. Culture is what people do, not what formal policies might tell them to do. If there is a disconnect between policy and culture, culture will come up trumps every time.

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 omission; and in which responsibility is accepted, including for the inevitable mistakes. 

Our role

The management of public expectations poses an ongoing challenge for integrity agencies. The statutory functions of agencies may at times contribute to a disconnect between what they can do, and what some segments of the public may expect them to do. Aggrieved members of the public may also find themselves directed to different agencies depending on the nature of their complaint, which can understandably be a source of frustration. 

So I think it is necessary to emphasise that the Commission is an anti-corruption commission concerned with serious and systemic corruption in the Commonwealth public sector. We are not a complaints-handling agency, nor an administrative decisions review authority. 

Making a referral to us is not like making a referral to the Ombudsman or an application to the ART: we do not adjudicate on individual complaints. Referrals to us are not individual initiating processes on which a referrer is entitled to an adjudication, but a source of information that, with other information, can help us identify and decide what we should investigate, and where we should focus in the public interest, to have the optimal impact in deterring and preventing corrupt conduct. 

Often that means we will focus on matters which are not and have not been the subject of investigation by other agencies, rather than those which have been or are under investigation elsewhere.

Emerging trends

Some statistics

Initially, our efforts were focussed on receiving and assessing reports of corruption. This began on day one. Increasingly, as the referrals have been triaged and assessed, our main effort has shifted to the conduct of investigations. 

In our first year to 30 June 2024, the Commission received 3189 referrals, with another 947 since then. About 85% are excluded at the triage stage, because they do not concern a Commonwealth public official or do not raise a corruption issue. 

We are currently conducting 35 preliminary investigations to help us decide whether there is a corruption issue and if so whether and how to deal with it. Another 17 preliminary investigations have been concluded, all but two finding that no corruption issue arose; the remaining have transitioned to investigations. 

We are conducting 29 corruption investigations, 6 of them jointly with other agencies.

We have also closed one joint investigation, with a decision to take no further action, when it was determined that corrupt conduct would not be found. 

We referred 16 matters to other agencies for investigation or consideration. 

In about 90% of cases which passed triage, we decided to take no further action. Typically this was because there were insufficient prospects of finding corrupt conduct, or the matter was already being adequately investigated by another agency, or a corruption investigation would not add value in the public interest. 

There are currently 5 prosecutions on foot in which we are involved, 4 arising out of matters which transitioned to us from the former Australian Commission for Law Enforcement Integrity, and 1 from a NACC investigation earlier this year. In matters transitioned from ACLEI there have so far been 6 convictions. 

However, contrary to what some commentators have suggested, criminal prosecutions are not our main focus. Our focus is on corruption investigations to find corrupt conduct, from which a criminal prosecution may in an appropriate case be a significant byproduct.

Emerging trends in public sector corruption

From the referrals we received and assessed, and the matters we investigate, there emerge 3 main domains in which we are seeing both the perception and the actuality of corrupt conduct, albeit the actuality far less frequently than the perception. They are the fields of procurement, recruitment and promotion, and at the interface of the public sector and the private sector. 

In the field of procurement, referrals covered the tender process itself (such as awarding contracts to businesses who did not offer the most competitive tender, collusion between businesses to win contracts, and failures to follow tender processes), and conduct during the delivery phase (misuse of government resources, and contractors accessing government information and using it to win further contracts). 

In respect of selection and promotion, while many complaints are really grievances by disappointed applicants who do not accept that others succeeded on merit, we have seen cases of senior officials procuring the appointment of family members to their agencies. 

And the interface of the public sector and the private sector, which is nowadays so widespread with the proliferation of contractors and consultants, and the outsourcing of functions of government to the private sector, inevitably creates conflicts of interest, with the private sector necessarily interested in and driven by profit.

In all 3 areas, the perceived and actual mechanisms of corruption are typically:

1. the preferring of family, friends and associates, and 
2. the misuse of official information to gain an advantage. 

These mechanisms produce a subversion of the public decision-making process, to serve a private benefit. Almost invariably they have their origin in a conflict of interest. 

A conflict of interest exists when you have a personal interest or relationship, or another duty, that could be affected by or could affect how you perform your official functions as a public official. 

Conflicts of interest are inevitable: everyone in public office will have them. Most do not lead to corrupt conduct. Put simply, corruption arising from a conflict of interest occurs where someone actually prefers their own private interest to the public interest. 

When a conflict is identified, there are 2 crucial steps: the first is declaring the conflict so everyone is aware of it, and the second is managing it, so as to ensure, so far as possible, that performance of the public function is not and can be shown not to be influenced by the personal interest. 

Priorities

To assist in prioritising our efforts on a logical basis, the Commission has adopted 6 Strategic Corruption Priorities (SCPs). These are the thematic areas on which we are focusing, to best add value in combating corruption in the Commonwealth public sector. We focus on areas where we are not duplicating the efforts of others. 

Our current strategic corruption priorities are:

• corruption at the Australian border
• corruption in complex procurements
• corruption in senior public official decision-making
• corruption involving contractors and consultants
• corruption in the environmental sector
• corruption affecting vulnerable people. 

 

Current investigations

Of our 29 current investigations:

• 6 relate to former or current parliamentarians
• 3 relate to former or current parliamentary staffers
• 5 relate to contractors or consultants
• 7 relate to senior executive officials
• 8 relate to law enforcement officials
• 8 involve procurement
• 1 involves recruitment
• 4 involve corrupt conduct at the border
• 4 involve law enforcement misconduct
• 3 involve grants schemes
• 5 relate to contractor conflicts of interest
• 9 relate to conflicts of interest of Commonwealth public servants. 

Many fall in multiple categories, and others fall in none of the categories I have mentioned. It is important to remember that most investigations do not result in a finding of corrupt conduct.

Balancing transparency and secrecy

There are often calls in some quarters for more information about our activities, for public hearings, and to produce outcomes— or ‘scalps’—publicly and promptly. 

Why are we ‘secretive’

First, we work with legislation we are given. The legislation that governs us requires that ordinarily our proceedings be conducted in private. This is chiefly to avoid the risk of unfair and premature damage to reputations that can be caused when unproven allegations of corruption are publicised. In accordance with the legislation, we will conduct public hearings where the circumstances and the public interest justify an exception to the general rule. 

Secondly, investigations rarely benefit from publicity. Publicity has the potential to compromise the efficacy and the fairness of investigations. It limits investigatory pathways and options, particularly the use of covert powers, it alerts persons of interest, enabling the destruction or distortion of evidence. That is why investigatory agencies generally don’t talk about their operations, and we are no different. 

Thirdly, our hearings are meant to be a means of gathering evidence and information, not a show trial from which many of the protections of a criminal trial are absent. Unlike a criminal or civil court, we can compel witnesses to incriminate themselves, and it is a large step to do that in public where the usual protections do not apply. And many witnesses—particularly whistleblowers—are more comfortable and give more helpful evidence in private than in public. 

What we do disclose

To provide as much transparency as we can, each week we publish statistics about the number of referrals, assessments and investigations. More recently we have provided some information about the general nature of investigations, by the type of person and type of conduct involved. 

At the conclusion of an investigation, we can publish our reports if satisfied it is in the public interest to do so, and I have said that we will usually be disposed to do so, especially if a finding of corrupt conduct is made, or where it is appropriate to ‘clear the air’ of an unfounded allegation. 

Demands for public hearings and so-called scalps are counterproductive. Amongst other things it means that every time an issue is considered, we have to second-guess whether the decision is being made for the right reason, or to placate the clamour. And in those situations, the paramount need for fairness tends to make you doubly hesitant to hold a public hearing or to make a finding of corrupt conduct, to be sure that your judgment is not being influenced by public popularity. 

Operation Bannister

This cartoon appeared a couple of weeks ago, in the Canberra Times, depicting us sweeping our business under the carpet. It followed publication of our report in Operation Bannister, which concluded that a former Home Affairs official who had received payments from a close relative who was a principal of Paladin had not engaged in corrupt conduct. 

In some places, this was misreported that the National Anti-Corruption Commission had cleared Paladin of corrupt conduct. We chose to publish the report chiefly to clear the air of the allegation about the former Home Affairs official. 

The investigation was opened and completed by our predecessor agency ACLEI. The focus of the investigation was only the conduct of the former Home Affairs official, not the conduct of Paladin. It is a matter of public record that there is a separate AFP foreign bribery investigation into Paladin. 

ACLEI concluded that there was no corrupt conduct by the official in question. Because it had not been reported on by ACLEI, responsibility for reporting transitioned to us. We reviewed the evidence and came to the same conclusion. The evidence in fact demonstrated convincingly that the official was not in a position at the relevant time to provide any relevant information or influence to advantage their relative in Paladin and could not have done so. But some were dissatisfied. 

Independence and fairness

This is why our independence is so important. Anti-corruption commissions have always generated controversy, and probably always will. Often, that is because they pursue the powerful or the popular. In our case, it is because we haven’t pursued the unpopular.  Since commencement, we have been committed to carrying out our work in good faith, with integrity, and in the public interest. That does not mean that our decisions will always be popular; often they won’t be. One of the chief reasons for our independence is so that we are free to make unpopular decisions: sometimes unpopular with the government of the day, sometimes with the people. For us, it cannot be a popularity contest. Making decisions that we believe to be right, though they will be unpopular, is what integrity requires of us. 

Our business is of the utmost gravity. To those who say we take an unduly narrow view of what is corrupt conduct, and an unduly cautious approach, I would say that to stigmatise someone as corrupt is a most serious matter, not lightly to be done. We are given extraordinary powers to do that, but with that comes a great responsibility to exercise them with care.

Broadly, corruption is about the abuse of public power or position for a private purpose. In our legislation, it includes breach by a public official of the public trust. But in this context, breach of the public trust has a well-established meaning in the, reflected in the second reading speech on our Act. 

Public powers are conferred on public officials to be used in the public interest, and it is a breach of public trust to use them for a purpose for which they were not conferred – typically, for a private purpose. The idea of breach of public trust is concerned with the misuse of entrusted public power, for a collateral purpose. It does not mean doing something that the public may dislike or disapprove. 

I think my record demonstrates that when there is appropriate evidence and a proper legal basis I won’t hesitate to call out bad behaviour, by the powerful and the popular: whether by the wealthiest in the land, or by our celebrated special forces. But I will not call individuals corrupt without a proper evidentiary basis, or on some extended notion of the idea of corruption that does not justify the word. 

If there are to be scalps, they must not be the result of an unfair process, or of pressure to produce them. All this requires a Commission that can proceed with perseverance and fairness, not persecution and vengeance. This is why calls to produce scalps, publicly and promptly, are unhelpful. Surely we don’t want the scalps of those where corrupt conduct is not proved by evidence to our comfortable satisfaction?

The Inspector’s Report

Almost a year ago to this day I spoke in this forum about our first 4 or so months, our remit and my vision. It was the day after the resignation of the CEO of Optus, and I made some remarks which gained quite some publicity at the time about a ‘blame culture’ in which someone has to be seen to suffer a penalty for a mistake. 

I said:

‘This deters people from owning and dealing constructively with mistakes. I don't want to get into particular events, but who is going to benefit from the resignation of Optus's chief executive? I don't see that Optus is going to benefit in any operational sense. Reputationally, there's been a sacrifice to the gods if you like, but that's about all there is to it. If we recognise that mistakes will happen, accept responsibility for them, and put things right, rather than just seeking a scapegoat, we will do a lot to improve culture in the public service.’

Ironically, a year later I find myself in that situation. 

Last month, the Inspector of the Commission published a report about the Commission’s decision not to investigate the referrals from the Robodebt Royal Commission. That report contained a finding that although I declared a perceived conflict of interest, and managed it by delegated decision-making to a Deputy Commissioner, and excusing myself from the meeting when the decision was to be made, this was insufficient to avoid the decision being affected by ‘apprehended bias’ —that is, the possibility that a reasonable observer could think that the decision was possibly not impartial on account of my involvement in some parts of the process.

My involvement ‘though not unlawful’ arose from a mistake of law or fact as to the extent to which the principles of apprehended bias required me to be isolated from the process.

Any mistake of law or fact is within the definition of ‘officer misconduct’ in the NACC Act, and so that stinging finding inevitably followed. Some have suggested that I should resign. Others have gone further. One commentator even posted that it was ‘revolver in the library time’ for me, which was liked by another 1700 followers. 

I have accepted that viewed through the lens of the legal notion of ‘apprehend bias’, I have been found to have made a mistake, for which I have taken sole responsibility. Given the need to ensure there is public confidence in the process, we decided that the original decision should be reconsidered, by an eminent independent person, and in this way, the mistake will be rectified. 

Today I am not going to canvass the original decision, as it is to be independently reconsidered. But I want to explain what the finding in the report means, how it came about, and what we are doing to address it.

What does it mean?

First, the finding is about what the law calls ‘apprehended bias’ not actual bias.

Apprehended bias is where a reasonable observer could possibly think that the decision could possibly not be impartial. The Inspector found that in the light of my having declared a perceived conflict arising from a past professional relationship, delegating the decision and leaving the room for the decision was insufficient to avoid the decision being affected by apprehended bias because of my participation in parts of the process.

Secondly, there is no suggestion of actual bias, intentional impropriety nor reflection on my integrity; my involvement was described as ‘an error of judgment’. The finding of ‘officer misconduct’ depends and depends only on the finding of mistake of law or fact, because ‘officer misconduct’ is defined to include conduct which though not unlawful arises from a mistake of law or fact. 

Such mistakes are professional inevitabilities for judges, tribunal members and administrative decision makers. The finding of ‘officer misconduct’ depends on nothing more than the type of mistake of law or fact that judges are found to have made every day. 

To those who say that it is much more serious than that, I first suggest that they carefully read the concluding paragraphs of the Robertson Report[1] which make very clear that that is the basis of the conclusion reached. 

And secondly, that whether circumstances are such as to give rise to a reasonable apprehension of bias is a question of judgment on which minds can and often do reasonably differ, and that the High Court has said that the fact that an appellate court concludes that, on account of apprehended bias, a trial judge ought not have sat ‘does not involve any personal criticism of the judge, or any assessment of [their] qualities or [their] ability to have dealt with the case … fairly and without pre-judgement or bias’. 

How did it happen?

I have always said that declaring a conflict is not enough: it is managing it that is crucial.

So why did I remained involved to the degree I did—especially as I might be taken to know the law? Although I considered that I would be able to make an impartial decision, I nonetheless recognised that some might think my impartiality could be affected by my prior professional association with one of the 6 persons referred. So I declared a perceived conflict and recognised that measures had to be put in place to ensure that the decision was not influenced by it.

On the other hand, the Robodebt Royal Commission referrals were received in the first week of the Commission’s existence, while we were just establishing our processes, policies and procedures. They raised several legal and policy questions for the Commission for the first time, including the scope of our jurisdiction and the meaning of ‘corrupt conduct’ under the NACC Act. They also had very significant resource implications. These were matters for which I had ultimate responsibility. I considered that it would have been irresponsible and negligent to abandon any involvement, to provide no guidance on these issues, to say it was ‘not my problem’, and to leave other officials to their own devices.

So in those circumstances, having regard to the nature of the conflict (arising from a past professional relationship, not as has been said in some quarters a close personal friendship), having regard to the nature of the decision to be made (which was not a quasi-judicial decision as to whether someone had engaged in corrupt conduct, but a preliminary decision as to whether an investigation should be opened), and having regard also to the status of the delegate (a Deputy Commissioner with a significant history of independent decision-making, who was given no direction as to how to exercise her delegated power, and whose appointment as a statutory officer could not be affected by me), in all those circumstances, it was my judgement that an appropriate balance could be achieved by delegation of the decision to that Deputy Commissioner, and by excusing myself from the meeting when it came to make the decision, so that it could be made freely—and all could if they wished speak freely—in my absence, while I continued otherwise to provide input on issues of general application.

How are we fixing it?

I accept that my judgment in this respect has been found to be mistaken through the prism of the law relating to apprehended bias. But the legal lens is not the only one.

There was a balance to be struck between my responsibility as a leader for managing the affairs of the Commission and issues that would have lasting implications for it on the one hand, and avoiding the perception that my prior professional relationship with one of the referred persons might influence the decision on the other. 

Having accepted that I got the balance wrong, we are now setting about putting it right, through having the decision independently reconsidered. Indeed we commenced this process once we had decided that the Robertson Report cast sufficient doubt on the decision that it was in the public interest to have it independently reconsidered, even without waiting for finalisation of the Inspector’s investigation. 

We are sourcing and appointing an appropriate person who will independently reconsider the decision whether or not we should investigate the referrals. We expect to be able to announce an appointment soon. 

We have also amended our conflict of interest procedures, so that the option of a person who has declared a perceived conflict not being the ultimate decision-maker but otherwise participating in the process is removed.

Conclusion

As to the suggestion that I should resign, I think you will by now have gathered my response.  First, if every judge who has been found to have made a mistake of law or fact resigned, there would be none sitting.  Secondly, the work of the Commission proceeds apace. The referrals continue to roll in unabated.  Our 29 investigations advance.  Even in those difficult days when the Inspector’s Report was published, I was conducting a hearing in one investigation; next week I will do so in another. 

But most importantly, if I were to be deterred from discharging my duties by adverse publicity, the important independence of the Commission would be undermined, in no small way.  It would be a statement that our yardstick should be popularity, not integrity.  It would say that we should avoid making difficult decisions, lest they be unpopular.  From there it is a short path to becoming an architect of oppression and vehicle of vengeance, rather than an instrument of integrity.

 

[1] The report of Alan Robertson SC, which the Inspector adopted.