The year in review

Overview

The terrorist bombings which occurred in London in July 2005 (which claimed 52 lives including one Australian and caused significant injuries to a number of other Australians), marked the start of another reporting period in which there were heightened demands on Australian intelligence and security agencies. There was also:

the second occurrence of a major bombing in Bali (20 persons died, including 4 Australian nationals and there were 19 other Australian casualties)
direct Australian Defence Force (ADF) involvement in extremely hostile operating environments (principally in Iraq but also Afghanistan)
significant ADF deployments to the Solomon Islands and East Timor
the detection and disruption of serious threats to the interests of Australians at home and abroad
conviction (at first instance) of two people in Australian courts on terrorism related charges
the arrest and charging of 22 other people on terrorism related offences, and the processing of these charges by various state courts, and
a significant intelligence effort to support security for the Commonwealth Games which took place in Melbourne, in March 2006.

The Australian Intelligence Community (AIC) has grown substantially in the past 12 months. Plans have been announced for the AIC to expand further in the near to medium term, in order to meet the significant new demands being placed upon it.

There has also been a raft of legislative changes in the 12 months covered by the report. The pace of change in this area has been such that a significant amount of the time of this office has been devoted to reviewing existing or proposed legislation. This legislation related work is outlined in the next chapter of this report.

There is also a vital public interest in ensuring that any new measures to protect national security which have been implemented, or are presently being contemplated, should not be unduly corrosive of the values, individual liberties and mores on which our society is based.

It is against the backdrop of this dynamic global and domestic security environment that I report on the activities of my office for the reporting year 1 July 2005 to 30 June 2006 (referred to hereafter as “2005–06” or “the reporting period”).

AIC leadership changes

New Minister for Defence

On 24 January 2006 the Prime Minister announced that the Hon. Dr Brendan Nelson MP, would become the next Minister for Defence, and he was sworn in to this position on 27 January 2006.

New Director-General of Security

On 10 July 2005 the Prime Minister announced the selection of Mr Paul O’Sullivan for the position of Director-General of Security. This followed the appointment of Mr Dennis Richardson AO as Australia’s Ambassador in the United States of America.

Mr O’Sullivan joined the Department of Foreign Affairs and Trade following the completion of tertiary studies at Sydney University and subsequently served in several overseas posts, including as Australia’s Deputy Chief of Mission in Washington, and as the Australian Ambassador in Bonn and Berlin. Immediately prior to his appointment as Director-General of Security, Mr O’Sullivan served as the Senior Adviser (International) in the Prime Minister’s Office.

New Deputy Secretary Intelligence and Security in Defence

Mr Ron Bonighton AM, a senior public servant of many years service, retired as the Deputy Secretary Intelligence and Security (DepSec I&S) within the Department of Defence on 18 November 2005.

In my various dealings with Mr Bonighton over several years, I found him to be a person of integrity with a genuine commitment to the principles of accountability. I wish him well in his retirement.

Mr Bonighton’s replacement as DepSec I&S is Mr Shane Carmody, who has served in various senior positions within the Department of Defence, including periods as a Deputy Director in DSD.

Honours and awards

Mr Bill Blick PSM AM

My predecessor as Inspector-General, Mr Bill Blick PSM, was made a Member of the Order of Australia (AM) in the Queen’s Birthday honours which were announced on 12 June 2006.

Mr Blick was made a member of the order, “for service to the community, particularly through roles that contribute to the monitoring of federal systems of administrative law and national security.”

IGIS activities

Inspection program

A particular strength of the model set out by Justice R. M. Hope¹, as contained in the Inspector-General of Intelligence and Security Act 1986 (IGIS Act) and developed by my predecessors, is the inspection program conducted by this office. The legislation provides for both formal inquiries and inspection activities to be undertaken by the office. However, it is the inspection program which is the centrepiece, taking up around 60% of the total time of the office.

The strength of the inspection program is that it is proactive and attempts to influence the culture of the intelligence and security agencies and assists to prevent or forestall problems of illegality or impropriety.

If combined with professional leadership and governance in the agencies, the outcome should mean few, if any, genuine “scandals” and only a very modest rate of the sort of errors which are bound to occur in even the best organisations. It should also mean only a modest number of formal inquiries need be undertaken by this office.

Moreover, inspection activities have assumed even sharper importance in recent years because of the need to monitor and review use of the special powers and capabilities made available to agencies engaged in counter-terrorism work. Examples of this are ASIO’s access to questioning and detention warrants and the capacity for ASIS staff to carry weapons for self-defence in prescribed circumstances.

The office has therefore paid particular attention to maintaining an effective and comprehensive inspection program. As well as handling increases in volume, this has included:

(a) ensuring that we review every request for the use of special powers warrants (e.g. listening device, entry and search etc.) made by ASIO under the Australian Security Intelligence Organisation Act 1979 (ASIO Act) and the (now) Telecommunications (Interception and Access) Act 1979 (TIA Act), and all requests for ministerial authorisations (to permit the deliberate collection of intelligence about Australian persons) made under the Intelligence Services Act 2001 (ISA)
(b) taking all opportunities to speak to groups of staff at induction or other training courses to promote awareness of the importance of accountability and acting legally and properly. Other means to promote the role of OIGIS within the AIC have also been pursued
(c) visiting all Australian-based AIC offices and sites on a regular basis (not simply the central offices of the AIC agencies)
(d) providing comment, wherever possible, on draft and existing policies and guidelines affecting individual AIC agencies, or which are likely to have cross-AIC implications, and
undertaking pilot projects to see if particular extensions to the inspection program would be useful.

Complaints and inquiries

Complaint and inquiry levels for the AIC since September 11, 2001 are not showing the sort of increase that one might have expected. This is a period in which there has been substantial growth in the size and activities of the agencies and in such circumstances one might expect to see a distinct increase in complaints and inquiries.

However, the figures have remained at much the same general level rather than showing an upward trend. Statistics on this are contained in the ‘Performance’ chapter of this report.

This is not to suggest that complaints are seen as relatively unimportant by my office. All are given close consideration in a timely manner. I noted in the 2004/05 annual report that I wished to achieve better timeliness but in a way which is still consistent with a thorough and incisive approach. For the 2005/06 financial year the average time for completed inquiries was 81 days. This compares to a five year average (2001/02–2005/06) of 104 days.

Enhanced relations with Ombudsman

The office has historically had good links to the Commonwealth Ombudsman.

Practice has been that when the IGIS was either absent from the country, or on an extended period of leave, the Commonwealth Ombudsman would be appointed to act in his place.

Mr Ian Carnell and Professor John McMillan signing the MOU between their offices, Canberra, December 2005

Subsequent to my appointment as IGIS in March 2004, the Prime Minister signed an instrument so that Professor John McMillan will serve as Acting IGIS, whenever I am out of the country, or on extended leave.

Professor McMillan and I have also worked closely on submissions which overlap our respective interests and appeared jointly before relevant parliamentary committees to offer our perspectives on issues within our respective remits. Details of these activities are provided in the next chapter.

We are also concerned to ensure that there are no gaps between our respective remits, that there is no unnecessary duplication of efforts, and that complaints which are raised with one office but fall in the remit of the other, are handled as seamlessly as possible.

The Ombudsman and I formally entered into a Memorandum of Understanding (MOU) on 14 December 2005, covering these issues. A copy of this MOU is provided at Annex 3 of this report.

Projected growth of OIGIS workload and budget

As referred to earlier, the AIC continued to grow substantially during 2005-06.

Of those figures which are publicly available, the Attorney-General announced on 16 October 2005², that ASIO employed 980 staff as at that date, that ASIO was expected to grow to 1180 staff by the end of 2005–06, and that ASIO was projected to expand to approximately 1860 staff by 2010–11.

In July 2004 Mr Philip Flood AO recommended in his Report of the Inquiry into Australia Intelligence Agencies³ that ONA’s budget should increase from $13.1 million to $25 million per annum, so as to support an increase in staff numbers from 74 to 145 persons. The government accepted this recommendation and staffing actions in 2004–05 and 2005–06 saw this figure being close to achieved.

The other agencies have also grown substantially.

There is inevitably more inspection work for OIGIS as the AIC agencies undertake more activity. I am pleased to advise that the Federal Budget which was handed down in March 2006, provided a significant boost to the recurrent funding base of the office, staggered over four years. Funding has been provided to enable the number of staff employed in OIGIS (in addition to the Inspector-General) to grow from six to the equivalent of 12 positions by the end of the 2009–2010 financial year.

Community outreach

A number of targeted outreach activities were undertaken in 2005/06 to maintain awareness of the office within the community.

These activities included the revision of a brochure explaining the role and functions of the IGIS into plain English and its production in three other languages (namely Arabic, Urdu and Indonesian).

This material was placed on the IGIS website and was also distributed via the Commonwealth Ombudsman’s outreach program. I am grateful for Professor McMillan’s ready assistance in this regard.

I also made personal contacts with a number of Islamic community leaders, addressed a meeting in a Mosque and was interviewed on a community radio station servicing a large ethnic community in Melbourne.

In addition to the above, articles by or about the office were published in the Defence Magazine (July 2005), the Public Sector Informant (August 2005) and the Admin Review law bulletin (No. 57, March 2006).

I also delivered a keynote address to the Australian Institute of Professional Intelligence Officers conference held in Sydney in November 2005, and was interviewed on Dateline regarding ASIO’s questioning and detention powers (broadcast on SBS on 3 August 2005) and Sunday regarding ASIO security assessment processes (broadcast on channel 9 on 10 February 2006).

Training

Visibility within the AIC is also important and hence I and members of my staff have actively sought to make presentations at suitable agency training courses and seminars as often as possible.

In 2005–06 we presented to approximately 700 staff from across the six AIC agencies.

The presentations are suitably tailored to the particular agency or audience, but all cover the history and activities of this office, the importance of the rule of law and agencies acting in accordance with the law, and the need for accountability and community confidence in their use of special powers and capabilities.

In addition to delivering presentations on the role and functions of the IGIS, members of my staff and I have also attended several agency training courses, so that we might obtain a better appreciation of the training which is provided to agency staff and the pressures to which trainee intelligence officers in particular are subjected.

Parliamentary committees

PJCAAD

The Parliamentary Joint Committee on ASIO, ASIS and DSD (PJCAAD), came into existence in March 2002, during the 40th Parliament.

The PJCAAD ceased to exist under that name with the commencement of the Intelligence Services Legislation Amendment Act 2005 on 2 December 2005, when it was retitled the Parliamentary Joint Committee on Intelligence and Security (PJCIS).

PJCIS

The retitling of the PJCAAD as the PJCIS was proposed by Mr Philip Flood in his 2004 report, to complement his recommendation that the remit of the committee be extended to all of Australia’s intelligence agencies.⁴

With the commencement of the ISLA Act 2005, the size of the committee was also increased from seven to nine members, and provision was made for the establishment of a Deputy Chair.

During the course of 2005–06 I appeared before the PJCAAD/PJCIS on 11 August 2005, when I was questioned about proposed changes to the ISA; and I met with the PJCIS on 2 March 2006, when I spoke briefly on my involvement on the Security Legislation Review Committee (for information on the SLRC see the next chapter).

My staff and I also met with the Secretary to the PJCAAD/PJCIS on three occasions during 2005–06, to discuss matters of mutual interest.

Senate Legal and Constitutional Committee

As discussed in the next chapter, the Commonwealth Ombudsman and I lodged a joint submission to this committee’s inquiry into the Anti‑Terrorism Bill (No.2) 2005 on 11 November 2005, and also appeared before the committee at public hearings in Sydney, on 17 November 2005.

I also lodged a written submission to the committee’s review of the Telecommunications (Interception) Legislation Amendment Bill 2006.

Senate Finance and Public Administration Committee

I appeared before the Senate Finance and Public Administration Committee during its consideration of Supplementary Budget Estimates on 31 October 2005.

I was not required to appear before the committee during its consideration of Additional Estimates (February 2006), or Estimates hearings for the 2006–07 Budget (May 2006).

Foreign visitors/international cooperation

During 2005–06, OIGIS received a number of international visitors. Notable among these were visits from:

United Kingdom Intelligence and Security Committee (September 2005)
South African National Intelligence Coordination Committee (October 2005)
Eminent Jurists Committee (March 2006).

In addition to the above, the office also received visits from representatives of various foreign agencies with which AIC agencies have liaison relationships. In each of these instances I invited further contact should any issues of concern about the propriety or legality of the conduct on any AIC agency arise.

Significant issues

Execution of counter-terrorism related entry and search warrants

In June 2005, ASIO, with the assistance of state and federal police, executed a number of entry and search warrants on premises associated with persons of security interest.

My office received several complaints, most of which concerned the return of goods seized. Some complainants queried whether the warrants had been legitimately issued, but I was able to respond that I had personally reviewed the warrant requests and the legislative requirements had been fully met.

Except in instances where some goods have needed to be retained for particular purposes, I found ASIO amenable to suggestions on my part to facilitate the return of seized goods as soon as reasonably possible.

These cases were handled administratively, rather than by reliance on more formal mechanisms such as preliminary or full inquiries.

I also received complaints that material about the execution of the warrants had apparently been leaked to the media. ASIO and the AFP conducted investigations into whether any leaks had come from their respective organisations.

Since then I have sought and obtained access to the records of that ASIO investigation. The conclusion reached by the investigation was that there was no indication that any leak was from ASIO. Having examined the investigation records personally, I am satisfied that the ASIO investigation was conducted thoroughly and professionally and I saw no reason to question the conclusion reached.

In November 2005 a large number of police entry and search warrants were executed in the wake of the arrest of a significant number of persons who have subsequently been charged with a variety of terrorism-related offences under the Criminal Code 1995. Complaints about these warrants were referred to the relevant Commonwealth or State Ombudsman.

Security assessment of US citizen Mr Scott Parkin

In early September 2005, a United States citizen, Mr Scott Parkin, was taken into custody in Melbourne on the basis that his temporary visa for entry into Australia had been revoked, and in consequence he would be held in immigration detention pending his removal back to the United States.

Shortly following his arrest I received a complaint from a member of the public raising concerns about the role ASIO may have played in these events.

On the basis of this complaint, and having ascertained that ASIO had triggered these events by issuing an adverse security assessment in respect of Mr Parkin, I conducted an inquiry under section 15 of the IGIS Act into ASIO’s actions in relation to Mr Parkin.

I provided the report of my investigation into this matter to the Attorney-General on 29 November 2005. The report was in two parts, the first part of which is an unclassified document which I believed could properly be released into the public domain.

The Attorney-General released a copy of my unclassified report on 6 December 2005.⁵ A copy of this report is provided at Annex 4 to this annual report.

In brief, I found that the security assessment of Mr Parkin was based on credible and reliable information and that the necessary legal requirements had been met. Contrary to some suggestions, there was no evidence or reason to think that the security assessment was influenced from elsewhere within the Australian Government or by external bodies.

More detail on the matter is contained in the ASIO chapter of this report.

I should also note that in the course of this inquiry I wrote to the Commissioner of the Australian Federal Police (AFP), pointing to a newspaper article which purported to give some details of an adverse security assessment made of Mr Parkin by ASIO. I was subsequently advised that the AFP had accepted this reference and would conduct an investigation.

In May 2006 the AFP advised that it had not been possible to identify the source of any leak which may have occurred.

Privacy rules/guidelines

As a result of the formal incorporation of DIGO into the ISA, it has been subject to privacy rules on reporting involving Australian persons since 2 December 2005.

There was also a review of the ISA in 2005–06, coordinated by the Department of the Prime Minister and Cabinet (DPMC) which, among other things, led to a government decision that ONA and DIO should be subject to privacy guidelines consistent with the requirements placed on ASIS, DIGO and DIO. Such guidelines were subsequently developed and implemented.

The DIGO privacy rules and the DIO and ONA privacy guidelines are provided as annexes 5, 6 and 7 of this report, respectively.

My office was involved in the development and endorsement of these privacy rules/guidelines, but also more specifically with the development of agency specific internal guidance on the application of the rules/guidelines and associated training programs.

More detail on this is provided in the agency specific chapters for DIGO, DIO and ONA.

Computer ‘cleansing’ allegations

On 22 June 2005, the SBS current affairs program, Dateline, aired a story entitled “Sledgehammer Politics”.

It was reported in the story that officers who said they were from the Attorney-General’s Department had obtained access to computers belonging to, or used by, various individuals who had advance access to the manuscript of a book Axis of Deceit authored by former ONA analyst, Mr Andrew Wilkie.

The story alleged that hard drives had been smashed by the government officers. There was an inference that ASIO might have played a role in these so called ‘cleansing’ activities.

The suggestion that ASIO may have been involved was also raised in a research brief entitled Spy versus spy: Government control of sensitive information⁶, by the Parliamentary Library.

I conducted a preliminary inquiry and was able to advise the complainant that ASIO had not been part of the so called “cleansing” activities.

More generally I advised the complainant that:

“The Attorney-General’s Department then managed a process which involved the parties concerned being visited and having the sensitive elements deleted from their computer hard drives. As part of the process a copy was made of each hard drive. The disks onto which the copying was done were government property. Taking a copy was a precaution so that if any other data was accidentally lost when the sensitive elements were deleted, the other data could be retrieved.

After the sensitive elements were deleted (but only those elements), each concerned person was given the choice of having the copy of their hard-drive (on a government supplied disk) destroyed in front of them. In some instances this offer was accepted. The purpose of such visible destruction was, I am told, to provide assurance to the person that the government was not retaining any of the information the person had on their computers.

As you will note, the process was managed by the Attorney-General’s Department. That department is not within my jurisdiction. In as much as any intelligence agency was consulted or provided assistance to the Attorney-General’s Department, I can see no reason, on the basis of my investigations to date, to conduct a full inquiry as provided for under the Inspector-General of Intelligence and Security Act 1986.”

Balibo related subpoena

The NSW Coroner is conducting an inquest into the death of Mr Brian Peters in East Timor, in October 1975. Mr Peters was one of five newsmen killed at that time who have come to be known as the ‘Balibo Five’.

My predecessor conducted an extensive investigation in 2000-01 into claims that intelligence information said to have been in the possession of DSD before the killings was not passed on to the government, and that if it had been, the tragic fate of the newsmen could have been averted.

Mr Blick ultimately concluded that intelligence material meeting the above description did not exist, although there was intelligence material relating to journalists in Timor. Mr Blick further concluded that all relevant material held by DSD was passed to government and that DSD did not deliberately withhold a particular item of intelligence.⁷

I considered the matter carefully and concluded that the public report of Mr Blick’s inquiry represented the extent of information about the specific subject matter detailed in the subpoena, which could be appropriately disseminated in the public domain by the IGIS.

I therefore relied on section 34(5) of the IGIS Act which exempts the IGIS from any requirement to produce or divulge to a court, any information obtained in the course of an IGIS Act inquiry.

This was accepted and the subpoena was accordingly discharged.

Cole Commission

On 10 November 2005 the Hon. Terrence Cole AO RFD QC was appointed, by Letters Patent, to conduct an inquiry into and report on whether decisions, actions, conduct or payments by various Australian companies mentioned in the Final Report of the Independent Inquiry Committee into the United Nations Oil-for-Food Programme breached any Federal, State or Territory law.

Given the evident thoroughness of Commissioner Cole’s approach I have not felt it necessary for me to initiate an inquiry into the conduct of the AIC in these matters, but will consider Commissioner Cole’s report when it is finalised.

Footnotes
1 Justice R. M. Hope, Royal Commission on Australia’s Security and Intelligence Agencies, General Report, AGPS, Canberra,
December 1984.
2 The Hon. Philip Ruddock MP, Attorney-General, Media Release 191/2005 dated 16 October 2005.
3 P. Flood, Report of the Inquiry into Australian Intelligence Agencies, Canberra, July 2004, Recommendation 4, p.180.
4 P Flood, op. cit., Recommendation 1, p.180.
5 Section29(1)(bb)(i)(ii) and (c) of the Intelligence Services Act 2001 refers.
6 Spy versus spy: Government control of sensitive information, Parliamentary Library Research Brief, No. 13, 2005-06, 24 March 2006.
7 An unclassified version of Mr Blick’s report was published at Annex 3 to the 2001-2002 IGIS Annual Report, pp.82-90.

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