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Defence Signals Directorate
What DSD does
DSD’s primary function is to collect foreign signals intelligence. It produces and disseminates reports based on what it collects. These reports are provided to key policymakers, the intelligence assessment agencies, and other selected government agencies.
DSD must not intercept communications within the domestic Australian telecommunications network. If the collection of foreign intelligence requires such interception, this would be conducted by ASIO under a warrant.
Since 29 October 2001 DSD’s intelligence collection and reporting activities have been regulated by ministerial directions, ministerial authorisations and privacy rules made pursuant to the Intelligence Services Act 2001 (ISA).
Intelligence priorities for the Australian intelligence community are established in a planning document that is endorsed and regularly reviewed by the National Security Committee of Cabinet.
DSD also acts as the government’s authority on matters relating to the security and integrity of information that is processed, stored or communicated by electronic means. This is commonly referred to as Information Security.
Further information can be found on the Defence Signals Directorate website.
Significant issues
Support to military operations
Significant numbers of Australian Defence Force (ADF) personnel were deployed regionally and more further afield, in a variety of operational environments, during 2005–06.
One of DSD’s key functions is to provide high-quality signals intelligence products and services to the ADF, to ensure the optimal military effectiveness of these deployments.
DSD also contributes to the security of ADF missions abroad by ensuring that sensitive electronic information systems are sufficiently robust to deflect attempts at unauthorised access, compromise or disruption.
The number and variety of ADF deployments imposed significant demands on DSD during the reporting period.
I received several briefings throughout 2005–06 on the support provided to the ADF by DSD, and was satisfied that DSD is properly focused on delivering to the ADF the best possible service it is able to provide.
Support for counter-terrorism activities
A very important focus for DSD in the current global security environment is to identify, collect and share foreign intelligence information relating to terrorist-related targets.
Various terrorist atrocities in our region, but especially the Bali-bombing incidents of 2002 and 2005 in which numerous Australians died or were severely injured, have served to bring home the reality that terrorist activities in our region pose a very real threat to Australia and Australians.
Obtaining and sharing information of this kind directly assists government to develop policies and plans to reduce the risks posed by these targets to Australian persons and Australian interests, both within Australia and abroad.
Domestic spying allegations against NSA
The counterpart of DSD in the United States is a body called the National Security Agency (NSA). NSA, like DSD, collects foreign signals intelligence by technical means.
In December 2005 The New York Times published several articles suggesting that the US President, Mr George W. Bush, had secretly authorised NSA to eavesdrop on Americans and others inside the United States to search for evidence of terrorist activity, without first obtaining court-approved warrants (which are ordinarily required under US laws to authorise domestic telecommunication interception activities).33
There followed significant media interest, both in the United States and elsewhere, about the legality or otherwise of NSA conducting so-called “warrantless surveillance”.
While the Bush administration and the US Attorney-General argued forcefully that the program undertaken by NSA was properly and lawfully authorised, the controversy did prompt some local concerns as to whether DSD was similarly engaged in domestic surveillance activities.
Although my initial thoughts on the subject were that the legal framework under which DSD operates is very different from that which is applicable in the United States, and that we had seen no suggestion of DSD engaging in “warrantless” domestic surveillance, I naturally raised these concerns with senior managers within DSD.
As stated elsewhere, DSD’s primary function is to collect foreign signals intelligence. This function is prescribed under section 7(a) of the ISA. Section 7(a) states that DSD is empowered “to obtain intelligence about the capabilities, intentions or activities of people or organisations outside of Australia …” (emphasis added).
Should there be a demonstrated need to obtain intelligence on an Australian person DSD can seek a ministerial authorisation from the Minister for Defence, but it can only do so where the intelligence is expected to relate to persons or organisations outside of Australia and where certain other specific criteria are satisfied.34
In cases where a person of interest is deemed to be involved in activities that are, or are likely to be, a threat to security, the Minister for Defence must first obtain the agreement of the Attorney-General before the Minister is able to provide an authorisation.
Should the subject be involved in activities of intelligence interest or concern within Australia, this is a matter which would properly be handled by ASIO. If need be, ASIO has access to a wide range of special powers which may be exercised under warrants obtained under either the ASIO Act 1979 or the TIA Act. Such warrants are subject to strict conditions and are regularly reviewed by this office.
In considering the briefings I have received, the relevant legislative framework, the technology framework and the inspection activities I undertake, I have seen nothing which suggests that DSD is involved in illegal or unauthorised domestic intelligence collection activities of this sort.
Flood Review implementation
DSD, like the other members of the AIC, was subjected to detailed scrutiny by Mr Philip Flood, in the course of his 2004 Review of the Australian intelligence agencies.35
After surveying DSD’s role and current activities and examining the Directorate’s management structure and resourcing, Mr Flood made two specific recommendations, namely:
- that a periodic external review should be undertaken of its performance against high priority and enduring targets, and
- the management structure of DSD should be strengthened by the creation of two additional senior executive service level positions.
Action in respect of the first of these recommendations was pursued during the reporting period, with a retired senior public servant with extensive knowledge of the AIC being formally engaged to conduct this review.
I have been briefed on the role and functions of the review and would expect a similar briefing when the review is completed.
In respect of the second recommendation, appropriate staffing action was undertaken to establish and fill a new position at the Deputy Director level with responsibility for technical matters, and a new branch head level position with responsibilities for collection and analysis. I engaged with these officers regularly during monthly meetings I have with senior DSD managers.
Intelligence Services Legislation Amendment Act 2005
As discussed in the ‘Legislative Review’ chapter of this report, the ISA was introduced to give effect to various recommendations contained in the Flood Review into Australia’s intelligence agencies, and an administrative review of the ISA coordinated by DPMC.
The Bill was sponsored in the Parliament by the then Minister for Defence, Senator the Hon Robert Hill, who received significant policy, legal and administrative support from DSD.
I received frequent briefings from DSD on the progress of the Bill, from its initial drafting through to its enactment in December 2005. I would like to commend those DSD staff involved in progressing this matter for the professional and thorough manner in which they undertook this task.
Inspection activities
Shortly after I was appointed as Inspector-General I wrote to the Director DSD setting out the range of inspection activities I planned to undertake.
I wrote again to the Director DSD in November 2005 setting down the inspection activities involving DSD which I planned to undertake during the 2006 calendar year. These activities include but are not limited to:
- reviewing all ministerial authorisation submissions made by DSD to the Minister for Defence
- monitoring DSD reporting for compliance with the ISA and the DSD privacy rules
- conducting monthly meetings with relevant DSD staff to discuss compliance, intelligence policy, and legal issues, and
- visiting various DSD collection sites outside of Canberra, as the opportunity permits.
Ministerial authorisations
The ISA provides a framework within which DSD can deliberately collect the foreign communications of Australians, in limited circumstances.
If DSD wishes to obtain a ministerial authorisation to intercept the foreign communications of an Australian person, the Director needs to satisfy the Minister for Defence that the person of interest is, or is likely to be, involved in one or more of a range of activities including:
- activities that present a significant risk to a person’s safety,
- acting for, or behalf of a foreign power,
- activities that are, or are likely to be a threat to security, or
- committing a serious crime.36
In order to obtain a ministerial authorisation, the Director DSD provides a comprehensive written submission to the Minister in respect of each individual on which DSD wishes to produce intelligence.
My office has access to the details of every authorisation which is approved, and I personally review documentation for each new or renewed authorisation usually within four weeks of the authorisation being granted. (This usually occurs following our regular monthly meeting with DSD staff).
In reviewing this material I have regard to the intelligence case which has been put to the minister, whether approval has been obtained from the Attorney-General in cases where the subject is judged to be a threat to security, and the proposed duration of the authorisation.
As a separate but related exercise, in the second half of the reporting period I had a member of my staff conduct a series of spot checks of various DSD databases to ensure that collection activities which were enabled by the granting of each ministerial authorisation did not exceed any limits imposed in that approval, and that such collection only occurred during the period specified in the authorisation.
These checks, for the most part, revealed that the requirements of each ministerial authorisation were being complied with. We did identify several data entry errors relating to expiry dates, only one of which had the potential to lead to unauthorised collection, but as this was picked up prior to the correct expiry date passing, no unauthorised collection occurred.
DSD also proactively brought to our attention a single instance where collection activities approved under a ministerial authorisation continued for a very brief period beyond the nominated expiry date of the authorisation. There was a small amount of collection (which was not processed) and when the error was detected this material was swiftly destroyed.
All the above instances were subject to thorough investigation and review by DSD to ascertain what occurred and why, and to identify appropriate remedial actions.
While I am involved in ongoing discussions on possible changes to DSD’s internal systems to ensure there is no reoccurrence, I am satisfied with the interim measures DSD has taken to date, and expect that the ultimate result will be an even more robust process.
Privacy rules
The Minister for Defence is required by section 15(1) of the ISA to make written rules regulating the communication and retention of intelligence information concerning Australians.
The then Minister for Defence issued such rules in late October 2001 to coincide with the commencement of the ISA. The rules were developed in consultation with the then Inspector‑General.
The DSD privacy rules, which are identical for practical purposes with the privacy rules under which ASIS and DIGO operate, are unclassified. A copy of the rules was published as an annex to the IGIS annual report for 2001-2002 and can also be accessed on the DSD website. 37
Although the vast majority of DSD reporting relates to foreign entities, a small proportion of its reports do contain intelligence on Australian persons. As it is sometimes important for this information to be provided to government decision-makers, the DSD privacy rules provides a framework to enable this information to be communicated, but only so long as strict criteria are met.
A fully staffed section within DSD monitors that the requirements of the privacy rules are being met. My office fulfils a similar function independently of DSD.
There is regular dialogue between DSD and my office on privacy issues arising from DSD’s reporting. It must be said that this is not because DSD is frequently in breach of the privacy rules but because DSD’s collection activities are inherently complex and will periodically throw up complex privacy related issues.
It is not possible to provide details of these issues in a public report, but I can say that the incidence of Australian persons being identified in DSD reporting is extremely low relative to the number of reports DSD disseminates. In some cases this occurs because DSD is not aware that the person holds Australian citizenship or permanent residency (commonly having dual nationality). As soon as DSD become aware of their status corrective action is taken.
In previous years I have commented favourably on the work of the Office of Compliance within DSD, and can say that in 2005-06 they have continued to make a valuable contribution.
Monthly meetings
As mentioned elsewhere in this section members of my staff and I meet with key DSD personnel on a monthly basis. These meetings ordinarily involve several DSD senior managers, as well as staff from the compliance section, the intelligence policy section, and DSD’s ‘in-house’ legal adviser.
These meetings typically involve broad-ranging discussion on privacy rules casework, collection priorities, ministerial authorisations, legislative and parliamentary reviews, and current legal issues, as well as any topical issues which may have featured in the media. Any briefings I might seek on specific aspects of DSD’s work are also usually scheduled to coincide with these meetings.
I also meet with the Director DSD, either prior to, or following each monthly meeting, or in his absence, with one of the Deputy Directors.
I have found these meetings to be a useful means of directly conveying my thinking on relevant privacy, legislation and legal issues to officers at a range of levels, and to also obtain a deeper understanding of DSD’s activities.
New collection activities
In order to remain effective DSD must continually enhance its collection activities and counter threats to its capabilities.
DSD regularly informs this office of projects with these objectives and we discuss any aspects that might involve legality or propriety. I was briefed on several such projects during the reporting period.
Site visits
DSD maintains a number of facilities around Australia which are integral to its collection activities.
During the reporting period I visited one of these sites and also an ADF facility which works closely with DSD.
Training
In previous reports the sustained effort DSD has put into training all staff on the requirements of the ISA has been outlined. This continued to be the case during the reporting period.
In 2005-06 either I or one of my staff delivered 11 presentations to DSD staff on the role of my office and the principles underpinning the application of the privacy rules.
Complaints and inquiries
The level of complaint about DSD is generally low because its primary business is to collect foreign signals intelligence by technical means. Given this focus DSD’s activities are unlikely to come to the notice of or impact directly on members of the Australian public.
During 2005–06 I received one complaint which included DSD in a preliminary inquiry. I also received one other complaint which was handled administratively.
Footnotes
33 See for example, ‘Bush Secretly Lifted Some Limits on Spying in US after 9/11, Officials Say’, The New York Times,
15 December 2005, p. 1.
34 The requirements for obtaining a ministerial authorisation are set out at s.9 of the Intelligence Services Act 2001.
35 Discussed in more detail in IGIS Annual Report 2004-2005, pp. 2-4, and 29.
36 Section 9(1A) of the Intelligence Services Act 2001.
37 The DSD Privacy Rules are available on the Defence Signals Directorate website (accessed on 1 September 2006).