Defence Intelligence Organisation

What DIO Does

DIO provides all-source intelligence assessments to customers at the national level, to inform defence and government policy and planning, and to support the planning and conduct of Defence Force operations. DIO also aims to develop and maintain a defence intelligence capability for use in time of crisis and conﬂict.

DIO is an assessment agency rather than an intelligence collection agency. Its assessments focus on the Asia–Pacific region and cover strategic, political, defence, military, economic, scientific and technical issues which have the potential to impact on Australia’s security interests.

DIO focuses on overseas developments and does not concern itself with domestic concerns or situations within Australia.

Further information about the role and functions of DIO can be found on the Department of Defence website.

Senior Appointment

On 14 December 2004 the Minister for Defence, Senator the Hon. Robert Hill, announced that Major-General Maurie McNarn had been selected as the new Director of the Defence Intelligence Organisation, with effect from 24 January 2005, and that Mr Frank Lewincamp PSM, would take up another senior level appointment within the Defence portfolio.

At the time of his appointment Major-General McNarn was serving as Commander Training Command—Army, having previously been the Australian National Commander—Middle East Area of Operations, in the period leading up to, and during, the war in Iraq.

Flood Inquiry

The background to the Inquiry into Australian Intelligence Agencies conducted by Mr Philip Flood is described in ‘The Year in Review’ chapter of this report. Mr Flood delivered his report to the government in early July 2004.

Mr Flood made a significant number of recommendations directly affecting DIO, each of which was accepted by the government. These recommendations included the following:

the position of Director DIO should preferably be filled by a suitably qualified high-quality military officer
a position of Deputy Director DIO should be created and filled by a suitably qualified high quality civilian when the Director's position is filled by a military officer (and vice versa when it is not)
the mandate for DIO be revised to focus clearly on supporting defence strategic policy and meeting the strategic assessment needs of the ADF
DIO should cease publishing intelligence not directly serving strategic level military-related analysis, and develop products which are more strongly defence-oriented
DIO should give greater focus to longer term and strategic assessments.

Accountability Arrangements

Mr Flood has made two recommendations which are directly related to increasing the external oversight and accountability of DIO, as follows:

the mandate of the PJCAAD should be extended to also include ONA, DIO and DIGO, and
the mandate of the IGIS should be extended to permit ‘own motion’ inquiries in respect of ONA and DIO, without ministerial referral.

These recommended changes require amendments to the ISA and the IGIS Act. The vehicle for achieving these amendments is the ISLA Bill, which was introduced into parliament on 16 June 2005.

As discussed elsewhere in this report ²⁰ , Mr Flood specifically recommended that the IGIS should formally review ONA’s statutory independence on a periodic basis. Mr Flood, however, was silent as to whether the IGIS should perform a similar function in respect of DIO.

DIO is a subordinate organisation within the Department of Defence, with no separate statutory mandate or direct line of budget funding. Nonetheless, the expectation is that DIO’s assessments should also be independent and any suggestion of political or other forms of external pressure to tailor assessments to reach particular conclusions, would be of equal concern.

With this in mind, there will need to be occasions when I review the independence of DIO’s assessments, using the own motion powers which Mr Flood recommended should be afforded to my office in respect of DIO. Such review activity could only occur should the ISLA Bill be passed and the necessary amendments to the IGIS Act come about.

Complaints and Inquiries

In last year’s annual report I provided background information on the interaction between this office and a then serving member of the ADF, Lieutenant Colonel Lance Collins, concerning a range of grievances about the Australian intelligence community in general, and DIO in particular. ²¹

I included as an annex to that publication, a copy of an unclassified report which had been prepared by my predecessor as Inspector-General, Mr Bill Blick, into those of Lt Col Collins’ grievances which fell within the jurisdiction of this office. ²² These matters related to Lt Col Collins’ belief that:

DIO acted in mid-1998 to quash early warning, included in an assessment prepared by Lt Col Collins, of problems developing in East Timor which would require Australian Defence Force deployment
throughout 1999, DIO maintained a line of assessments in relation to East Timor that were relatively soft on Indonesia, reﬂecting a DIO view that related more to its perception of an Australian policy line than professional assessment of the situation, and
in December 1999 DIO, without warning, cut access to a particular intelligence database.

After a conducting a thorough investigation, Mr Blick concluded in respect of each of these points that:

what Lt Col Collins interpreted as an attempt to quash contrary views appeared to be legitimate expressions of concern about parts of the content of his assessment and about his wide distribution of assessments and comments
DIO assessments during the period in question did not uniformly, or even predominantly, adopt a pro-Jakarta line although there were instances where that interpretation might be available, and
to the extent that evidence was available, it supported the view that the loss of access to the database resulted from technical problems rather than a deliberate decision.

Mr Blick completed his report in May 2003, and advised Lt Col Collins in June 2003 that he had referred a copy of his report to the Minister for Defence. In July 2003, the Minister for Defence referred an unclassified version of Mr Blick's report, to Lt Col Collins, and to an individual who was conducting a redress of grievance investigation for the Army, into matters raised by Lt Col Collins which fell outside of the jurisdiction of this office.

In early April 2004, media reporting revealed that Lt Col Collins had written to the Prime Minister, expressing dismay at a range of alleged intelligence failures, and had called for, '… an impartial, open and wide-ranging Royal Commission into intelligence and the inﬂuences upon it.”

Very shortly after my appointment as IGIS in late March 2004, I was asked by the then Chief of the Defence Force, to independently review various papers associated with Lt Col Collins’ grievances and Mr Blick's report. I did so administratively, rather than in the guise of a formal IGIS Act inquiry.

On 30 April 2004, the Prime Minister publicly released an unclassified version of Mr Blick's report, in response to media enquiries about Lt Col Collins’ complaints.

On 3 May 2004, I wrote to Senator the Hon. Robert Hill, Minister for Defence, informing him that my views (on the papers) were consistent with those of my predecessor but suggested that while Mr Blick's investigations into the alleged disconnection of the intelligence database was comprehensive it was not exhaustive, and that it would be desirable to pursue this matter further.

The Minister for Defence agreed with my suggestion and asked me, pursuant to section 8(3)(a) of the IGIS Act, to conduct an inquiry into that matter.

The attention paid to Lt Col Collins’ concerns by the media in April 2004, coincided with the research phase of the Inquiry into Australian Intelligence Agencies being conducted by Mr Philip Flood.

Mr Flood sought to meet with Lt Col Collins but reported that Lt Col Collins ultimately declined to be interviewed 'because neither the Inquiry, nor the Army, was in a position to agree to his condition that expenses for his senior and junior counsel be met.” ²³

The Flood Inquiry nonetheless obtained access to the intelligence estimate which had been prepared by Lt Col Collins in 1998 which he believes was subject to quashing action, and independently analysed all estimates prepared by DIO and ONA around this time, for any evidence of a pro-Jakarta line or bias.

Mr Flood’s analysis of these documents is contained in the Report of his inquiry, which was provided to the government in early July 2004. The more salient of Mr Flood’s conclusions were that:

while the July 1998 Intelligence Estimate of the situation in East Timor (of which Mr Collins was the principal author) was a significant work of analysis, it discussed matters which were well beyond and outside the scope of an intelligence estimate and this compromised its utility to DIO and the Commander Australian Theatre
the Estimate included comments on Australian political developments, including a state election, disparaging comments on policies pursued both by Labor and Coalition Governments, and reference to Wik/native title and greenhouse gases
the Estimate did not prove to be a fully accurate prediction of what actually transpired, and<
the Inquiry found no evidence in any of the DIO and ONA assessments it reviewed of a pro-Jakarta bias. ²⁴

Mr Flood stated in his report that he did not make a separate investigation into Mr Collins’ allegations regarding the disconnection of the intelligence database, as this matter was being separately investigated by this office.

I devoted significant resources during the first half of the reporting period to this inquiry. This involved calling on the services of two officers from the Defence Security Authority with forensic IT expertise, re-interviewing a number of individuals who had previously provided statements or been interviewed by Mr Blick, and interviewing a number of persons with whom Mr Blick had not spoken.

I provided the report of my inquiry to Senator Hill on 30 November 2004. I suggested that Senator Hill seek further advice from the Secretary of the Department of Defence in respect of certain issues.

Senator Hill issued a press release on 9 December 2004, in which he indicated that he had sought advice from the Secretary to the Department of Defence on matters raised in my report, and that the Secretary was pursuing legal and administrative issues arising from the report. Senator Hill attached a copy of my letter to him of 3 May 2004, to the press release he issued on 9 December 2004. This letter is reproduced at Annex 3 to this report.

At the request of Minister Hill, I prepared an abridged version of my inquiry report which would be suitable for public release (having regard to security and privacy issues). Minister Hill released the abridged version of my report to the public on 25 August 2005. Although it was released outside of the period covered by this report, I have included the report at Annex 4, given its topicality and for ease of reference.

The conclusions I reached were:

the denial of access to the intelligence database in December 1999 was deliberate and not the result of technical faults in any part of the system
while the evidence did not establish that the then Director DIO directed the cut in access, a person identified as ‘Mr A’ had instructed another person to effect this outcome, and
Mr A may have made statements in 2001 that potentially raised issues of a legal or administrative nature.

I noted that while the denial of access to the particular database for 26 hours did not seem to have been a critical deficiency in operational terms, one can readily understand the sensitivity of those in the field to any change, without consultation, in intelligence access arrangements. It appeared that security concerns were the motivating factor within DIO for the action. The issue of what general responsibility should lie with the then Director of DIO was also canvassed.

In releasing the abridged version of my report, Minister Hill stated that he had drawn certain conclusions from this matter and initiated the following administrative actions to ensure that such a scenario is not repeated in the future:

if it was decided to remove access to a database from those in the field, even if the consequences were not significant and the action was justified, the users should have been told and given reasons for the decision
furthermore, the fact that Mr Blick in his investigation was left to reach conclusions, which at least one officer knew to be incorrect, was highly unsatisfactory
the events called for disciplinary action under the Public Service Act which has now occurred, and
in relation to attitudinal differences between the strategic intelligence and tactical intelligence communities, significant reform has since occurred in accordance with the recommendation of the Flood report. This process of reform is ongoing. ²⁵

Footnotes
20 See chapter on ONA.
21 IGIS Annual Report 2003–2004, pp. 48–49.
22 IGIS Annual Report 2003–2004, Annex 3, pp. 89–97.
23 Flood, p. 47. 24 ibid, pp. 47–50.

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