The year in review

Federal election and change of government

The 41st Parliament of the Commonwealth of Australia was formally prorogued at 1200 hrs on 17 October 2007, and writs were issued for an election for the House of Representatives and half of the Senate, which was conducted on 24 November 2007.

A new government, under the Prime Ministership of the Hon Kevin Rudd MP, was sworn in on 3 December 2007.

With the change of government, those individuals who had held ministries under the Howard Government with oversight and management responsibilities for AIC agencies naturally relinquished those positions.

The Hon Kevin Rudd MP, assumed administrative responsibility for a range of agencies within his portfolio upon being sworn in as Prime Minister. These agencies include ONA and OIGIS.

The incoming Attorney-General, the Hon Robert McClelland MP, replaced the Hon Philip Ruddock MP and in addition to becoming the first law officer of the Commonwealth, also took over executive responsibility for ASIO.

The Minister for Foreign Affairs, the Hon Alexander Downer MP, was replaced in that role by the Hon Stephen Smith MP. In doing so, Mr Smith assumed executive responsibility for ASIS.

The Hon Joel Fitzgibbon MP replaced the Hon Dr Brendan Nelson MP as the Minister for Defence, and in so doing assumed executive responsibility for DSD, DIGO and DIO.

Newly constituted National Security Committee

Each of the newly appointed Ministers named above are also members of the National Security Committee (NSC), as are the Deputy Prime Minister (the Hon Julia Gillard MP), the Treasurer (the Hon Wayne Swan MP), and the Cabinet Secretary/Special Minister of State (the Hon Senator John Faulkner).

NSC is a standing committee of the Cabinet which meets both regularly and on an ad hoc basis (as necessary), to consider significant issues and make decisions which have, or are likely to have, an impact on Australia’s defence, intelligence and security, and international affairs and relationships. Excepting where decisions are referred to a full meeting of the Cabinet, NSC is the peak executive-level political decision making body for the AIC agencies.

Changed administrative arrangements affecting IGIS

In April 2008 I was advised of Prime Minister Rudd’s intention to rebalance the administrative arrangements within his portfolio entailing, among other things, administrative responsibility for OIGIS being transferred from him to the Cabinet Secretary/Special Minister of State, Senator the Hon John Faulkner.¹ This is consistent with Senator Faulkner’s responsibility for other accountability and integrity agencies such as the Commonwealth Ombudsman and the Auditor-General.

In being advised of this proposed change I was reassured that the revised arrangements would not prevent me dealing directly with the Prime Minister if there were a significant matter which I believed the Prime Minister should be alerted to or otherwise personally involved.

The above change and other revised administrative arrangements affecting the Prime Minister and Cabinet portfolio came into effect on 1 May 2008.²

New selection arrangements

The Australian Labor Party made a commitment in the lead up to the 2007 federal election to strengthen transparency and merit based selection when appointing senior statutory office holders and senior public servants. Upon coming to power the Rudd Government sought to give effect to this commitment by introducing new arrangements with effect from 8 February 2008.³

In announcing these new arrangements the Cabinet Secretary indicated that, in future, at least 130 prescribed senior public service/statutory office holder positions would be publicly advertised when a vacancy arose or was anticipated, that an assessment process for each position would be conducted on the basis of merit, and that each process would be oversighted by the relevant departmental secretary and the Public Service Commissioner.⁴

While in each case a report and recommendations will be made to the responsible Minister, the decision on appointment or recommendation to the Governor-General will remain with the Minister.

The positions of Director-General of ASIS and Director-General of Security (i.e. the head of ASIO) are excluded from this new arrangement, while the positions of IGIS and Director-General of ONA are specifically included. The heads of the three Defence intelligence agencies are not statutory office holders and are not listed, but are in any case subject to other merit-based processes.

As indicated in my previous annual report, I was reappointed for a second and final term as Inspector-General on 27 April 2007.⁵ The instrument of appointment is for a period of four years from that date.

This means that at the conclusion of my appointment on 26 April 2011, or if I were to leave this office prior to then, there is now a requirement for the position of IGIS to be advertised. The statutory requirements for consultation with the Leader of the Opposition before submission of a recommendation to the Governor-General, will remain a part of the process.

Key intelligence and security interests

Given the complex interweaving of domestic and international affairs, it follows that the focus of the AIC agencies in the period covered by this report was necessarily directed towards a variety of targets and interests.

While it is not appropriate for me in a public document to set out the details and ordering of Australia’s national intelligence collection priorities, or the trends and developments in which our assessment agencies have a particular interest, in a very general sense it can be said that these interests include (but are not limited to) the following broad topics:

the provision of accurate and timely advice to key decision makers, so that they might respond in an informed way to emerging and enduring issues of concern
the early detection of threats to the interests of Australians at home and abroad
the disruption of activities which are judged to pose a serious threat to Australia’s national interests, where it is possible and desirable to do so
the provision of support to various ADF deployments overseas (including in hostile operational environments such as Iraq and Afghanistan)
providing coordinated in-depth planning and support to the security effort associated with Australia’s hosting of events of major significance (e.g. the Asia-Pacific Economic Cooperation (APEC) Leaders meeting in September 2007, the Olympic torch relay in April 2008, and the Papal visit and various events associated with World Youth Day in July 2008)
the sharing of information with AIC and non-AIC agencies, in order to gain a better appreciation of potential threats, and to enhance regional and global security, and
sharing skills and building capability within our region to deal more effectively with new and emerging threats to Australia’s defence, economic, foreign relations and security interests.

Continuing growth of the AIC

The AIC has experienced a significant increase in size in recent years. This growth has occurred as a consequence of:

ever-changing global circumstances
the increased targeting of both western and Australian interests
the implementation of recommendations contained in various external and internal reviews of the AIC agencies which were commissioned in response to these changing circumstances, and
the acceptance by government of a variety of new policy and planning proposals put forward by the AIC agencies to enhance their capability to respond to a changing security environment.

Notwithstanding that there was a change of government in late 2007, there are no outwards signs that the funding outlook for the AIC agencies will alter dramatically in the near to medium term.

As an example of this, in October 2005 the then Attorney-General, the Hon Philip Ruddock MP, announced a five-year strategic plan under which he projected that ASIO would grow from an existing establishment of 980 positions to 1860 positions by 30 June 2011.⁶

In the ASIO portfolio budget statement for 2008–09, it is stated that:

“ASIO remains on track to meet the government-endorsed target of 1860 staff by 2010–11. ASIO currently has around 1470 staff, which is more than double the number at the end of 2002–03 (668). ASIO will continue to recruit around 170 staff in each of 2008–09 and 2009–10.”⁷

The Rudd Government’s first budget was delivered by the Treasurer, the Hon Wayne Swan MP, on 13 May 2008. The passage of relevant budgetary measures announced on that night, namely the Appropriation Bill (No. 1) 2008–09, will have the effect of continuing the growth of ASIO and the other AIC agencies to ceiling levels which were proposed by the former government.

For any agency rapid growth generates some degree of organisational stress, and the AIC agencies are not an exception.

One way in which this may be manifest is a small but increasing number of complaints made to my office about AIC agency selection exercises and recruitment practices, and complaints from current and/or former staff about internal management practices. However, in a relative sense the number of such complaints is not large when compared to the size and growth of the agencies.

Consequential growth of OIGIS

When I began my first term of appointment as Inspector-General in March 2004, the office comprised myself and four staff.

This staffing level remained static for approximately 12 months before I obtained funding approval to increase the size of the office, in a phased manner, in lock-step with the growth of the AIC.

As at 30 June 2008, OIGIS comprised myself and 9 staff who perform a range of inspection, inquiry, review, complaints handling and corporate functions.

Further details about the resources of the office are provided in the “Corporate Governance, Human Resources and Financial Management” chapter of this report.

Acting IGIS

In my previous annual report, I wrote of how the then Prime Minister, the Hon Mr John Howard AC, had issued a standing instrument of appointment to Professor John McMillan on 28 May 2007, which enables Professor McMillan to serve as the Acting Inspector-General for those periods of time when I am either outside of the country, on an extended period of approved leave, or if I were to be incapacitated for any reason.⁸

Despite the change of government, this instrument has continuing legal effect until such time as it is either revoked or overridden by a subsequent instrument of appointment.

During September-October 2007, I took four weeks leave during most of which time I was overseas. This was the first extended period of annual leave which I have taken since being appointed as Inspector-General in 2004.

I am most grateful to Professor McMillan for the assistance he afforded to this office, as Acting Inspector-General, at that time and on a continuing basis.

Secretary of PMC

Shortly after the 2007 Federal Election and overseeing the transition to power of the new Rudd Government, the then Secretary of the Department of the Prime Minister and Cabinet (PMC), Dr Peter Shergold AC, formally advised the Prime Minister of his decision not to seek reappointment to that position when his five-year term expired in February 2008.

On 6 February 2008, the Prime Minister announced the appointment of Mr Terry Moran AO, as Dr Shergold’s replacement.⁹ Mr Moran took up his appointment on 3 March 2008.

At the time of his appointment, Mr Moran was serving as the Secretary of the Victorian Department of Premier and Cabinet, a position which he had held since July 2000.

The position of the Secretary of PMC is a critical appointment for any government, as the holder of that office sits at the centre of the bureaucratic power structure and shares a leadership role for the Australian Public Service with the Australian Public Service Commissioner.

The Secretary of PMC also plays a pivotal role in respect of the AIC, in that he or she provides direct input and support to NSC, and as chair of the Secretaries Committee on National Security (SCNS).

I only had the opportunity for limited dealings with Mr Moran in the period between his commencement as Secretary of PMC and the end of the reporting period, but these dealings were cordial and served to underline the importance he places on accountability bodies such as OIGIS.

OIGIS valedictions

Retirement of Ms Robyn Kelly

The occasion of this annual report provides me with the opportunity to put on the public record some comments about a valued member of the OIGIS team, Ms Robyn Kelly, who retired in August 2007, after 14 years of dedicated service to the office.

Ms Kelly has the unique distinction of spending the longest period of any one individual on the OIGIS payroll. In addition to being a diligent and dedicated officer throughout her tenure, Ms Kelly has also left an enduring mark on all who worked with her through her constant championing of environmental and animal welfare issues, as well as bringing joie de vivre to the office.

We all miss the special spark which Ms Kelly gifted to the office and wish her the very best in her well deserved retirement.

IGIS activities

Complaints and inquiries

Section 8 of the IGIS Act provides a legal basis for the Inspector-General to conduct inquiries into the AIC agencies following a referral from a responsible Minister, or upon the Inspector-General’s own motion.

Section 8 of the IGIS Act also empowers the Inspector-General to receive and inquire into complaints about the AIC agencies which collect intelligence (i.e. ASIO, ASIS, DSD and DIGO).

There is no specific provision in section 8 of the IGIS Act which directly permits this office to initiate an inquiry on the basis of a complaint which is made about either of the assessment agencies (i.e. DIO and ONA).

The rationale for this delineation between the intelligence collection and intelligence assessment would appear to be that the agencies which undertake only assessment do not have the capacity to infringe the civil liberties of individuals to the degree that the collection agencies might.

For practical purposes this has not been a major impediment to the efficient operation of this office because we have received very few complaints about DIO and ONA since the office was created.

When complaints about DIO or ONA have been received, they have usually been capable of being dealt with administratively (i.e. without need to use the formal powers afforded to the IGIS under the IGIS Act).¹⁰

Mr Philip Flood considered whether the Inspector-General should have the capacity to directly initiate an inquiry on the basis of a complaint about DIO or ONA, in his Report of the Inquiry into Australian Intelligence Agencies, which was presented to government in July 2004.¹¹

Mr Flood did not propose a change of this sort but did recommend that the IGIS Act should be amended, to provide the IGIS with the capacity to initiate own motion inquiries into the assessment agencies, at his or her discretion, consistent with the Inspector-General’s existing jurisdiction in respect of the collection agencies. Such an amendment was made to the IGIS Act with effect from 2 December 2005.

The net effect of the above is that the IGIS has either clearly defined direct authority, or sufficient flexibility, to handle complaints about all six AIC agencies.

Section 8 also provides guidance on whether or not particular employment related concerns, and a range of other issues, fall inside or outside the remit of the Inspector-General. These provisions are somewhat convoluted.

If my office receives a complaint which I determine falls outside of my jurisdiction, the complainant is promptly informed of this fact and whether or not there are any other avenues available to them for consideration of their concerns.

If a matter of concern or complaint falls within my jurisdiction, a judgement needs to be exercised as to whether or not it should be pursued, and if so, the most appropriate mechanism for taking it forward.

Section 11 of the IGIS Act provides me with wide discretion on whether or not to pursue a complaint. The underlying presumption of the section is that a complaint against an AIC agency will be pursued, so long as it is within jurisdiction, unless:

the complainant became aware of the action more than 12 months before the complaint was made and did not pursue it at the time
the complaint is frivolous or vexatious or not made in good faith, or
having regard to all of the circumstances of the case, an inquiry, or further inquiry, into the action is not warranted.

Additionally, I will not pursue an inquiry where a complainant has exercised or could exercise a right to cause the action to which a complaint relates to be reviewed by a court or tribunal, unless I am of the opinion that there are special reasons for doing so.

Having considered whether or not a complaint is within jurisdiction, and determined whether it should be pursued, I have three options on how next to handle a complaint. These options are to either pursue the matter administratively, as a preliminary inquiry, or as a full inquiry.

Processing of complaints by administrative means

The bulk of complaints made to the office are of such a character that they can be processed administratively.

In the specific instance of complaints about the timeliness or otherwise with which ASIO processes security assessments for visa applicants, this entails oral and written communications between my office and the relevant functional area of ASIO, initially at the desk officer level, to ascertain the facts of the matter, to obtain a progress report and to report back to the complainant or their agent.

The level of contact is escalated, as necessary, depending on the individual circumstances of each case, but is something which can usually be undertaken administratively and at the working level.

On occasion complaints of this kind will be pursued more formally by means of a preliminary inquiry, or as a full inquiry.¹²

Of the remaining complaints which we receive and process administratively, the majority are dealt with without referral back to the AIC agency which is the subject of the complaint. There are a variety of reasons why this is so, including:

the complainant holds genuine but misconceived ideas about the role and functions of the AIC agencies (e.g. actions are ascribed to AIC agencies which do not correlate to their function)
the complainant has put forward suggestions which are highly unlikely (e.g. conspiracy theories), or
the claims made by the complainant are manifestly unlikely or impossible (e.g. purported new mind control or related technologies).

Judgements in such matters are formulated on the basis of all of the material which has been presented by the complainants (i.e. not only new material, but materials which may have been presented previously), as well as our experience in dealing with similarly formulated complaints which we have received from other complainants.

Regardless of whether or not a complaint raises substantive issues, I can assure readers of this report that all complaints are taken seriously and that all complainants to this office are treated with courtesy and respect.

Preliminary inquiries

The next means by which a complaint can be processed is by way of a preliminary inquiry.

Preliminary inquiries are provided for under section 14 of the IGIS Act and are made by the Inspector-General of the head of the agency which is the subject of complaint.

Preliminary inquiries will usually be pursued if there is a question about the jurisdiction of the IGIS which requires further information before it can be resolved, or in cases where further information is required from the agency in question, in order to form a view as to whether a fuller inquiry is required.

Preliminary inquiries are, as the name suggests, less formal than a full inquiry and will ordinarily be sufficient to address issues raised by a complainant, or any concerns which the Inspector-General might have, without the need to proceed to a full inquiry.

Full inquiries

The final means of investigating a complaint, responding to a formal request from a responsible Minister for an investigation into a matter within my remit, or for me to pursue a matter on my own motion is by means of an inquiry, as provided for under Division 3 of the IGIS Act.

Inquiries of this kind are more commonly referred to as “full inquiries” in my office, so as to readily distinguish them from “preliminary inquiries”.

Full inquiries are not initiated lightly, as a number of statutory steps need to be complied with, and because I may utilise my full suite of special powers in the course of a full inquiry.

These powers, which are akin to those which are available to a Royal Commission, include the power to compulsorily obtain information and documents, to enter premises occupied or used by an AIC agency, to issue notices to persons to attend before me to answer questions relevant to the matter under inquiry, and to administer an oath or affirmation.

During 2007–08 I initiated 18 new full or preliminary inquiries. This compares with 13 such new inquiries initiated in the previous reporting period. Of these 18 new inquiries, three were own motion inquiries and 15 were the result of complaints.

Of the 15 complaints which resulted in either full or preliminary inquiries, three were lodged by either current or former AIC employees and relate in some way to their employment, while an additional five were lodged by external applicants for positions which were advertised by AIC agencies who were aggrieved either by the selection process or the manner in which the selection process was administered.

In 2006–07 my office received 65 complaints about AIC agencies which did not relate to the processing of security assessments by ASIO which were handled administratively. In 2007–08 this figure was 75.

Sixteen of the 75 complaints were made by current or former employees of AIC agencies about the agency for which they had worked compared to only five such approaches in the previous year.

In addition to this, seven out of the 75 complaints were received from external applicants for positions which were advertised by AIC agencies, who were aggrieved either by the selection or vetting processes.

During this reporting period my office also received 193 new complaints about alleged delays by ASIO in preparing security assessments on applicants for various visa categories, which I chose to handle administratively.

The receipt of 193 new complaints of this kind represents a very substantial increase on the 71 new immigration related complaints which OIGIS processed administratively during the previous year. There are several reasons why the number of immigration related complaints has increased substantially, but of particular significance is the advice to me that there was a 36% increase in the number of visa security assessments processed by ASIO during the year.

I should note that approximately half of the immigration related complaints received in 2007–08 were not actually “live” for ASIO i.e. they had not been referred by the Department of Immigration and Citizenship (DIAC), or DIAC had been asked for further information, or ASIO had already provided a security assessment to DIAC. Of course, such cases still add to the OIGIS workload.

A more general examination of the overall level of complaints made to this office is explored in the “Performance” chapter of this report.

Inspection and visits program

During 2007–08 approximately two-thirds of the resources of OIGIS (other than those required for corporate matters) were devoted to the on-going inspection and visits program.

I consciously devote such a significant proportion of our resources to these activities because I believe very strongly in the positive effect that our regularly scheduled round-table meetings and targeted inspection activities, supported by occasional special projects, have on influencing normative behaviour within the agencies.

Fuller details of the various visits and inspection activities undertaken by OIGIS during 2007-08 are provided in the individual chapters on each of the agencies, but these activities have included:

the scheduling of monthly meetings with senior ASIO managers so that we might discuss issues of topical and on-going interest to our respective agencies. (This replicates our long-standing practice of conducting round-table meetings of this kind in each of the other collection agencies)
continuing to review relevant accountability documents for every request made by ASIO for the use of special powers warrants
reviewing authorisations issued within ASIO to conduct investigations into persons of security interest
reviewing a sample of ASIO’s accesses to Australian Transaction Reports and Analysis Centre (AUSTRAC) data
regularly reviewing the application of privacy rules to products/records generated by ASIS¹³, DSD and DIGO, and the application of the privacy guidelines applicable to ONA and DIO
reviewing all ministerial authorisations issued to the foreign intelligence collection agencies by their respective ministers
reviewing ASIS operational files on a regular and targeted basis
reviewing the application of relevant weapons guidelines and approval processes in respect of ASIS personnel
regularly speaking to AIC staff at ‘in-house’ training courses, to promote awareness of the importance of accountability and acting legally and with propriety, and
regularly visiting AIC offices and sites around Australia.

Even though our existing visits and inspection program is quite expansive, there is scope for this work to be varied, and to add new inspection tasks.

With the recent and proposed growth in the size of OIGIS, I intend to take advantage of this to initiate several pilot projects in 2008-09, within different AIC agencies.

I see these anticipated projects being not only useful exercises in themselves but as an aid to determining if they should become regular on-going inspection activities in the future.

I also plan to deepen my office’s knowledge of the agencies for which I have oversight responsibilities so that I and my staff are well informed about the full range of their activities.

Community outreach

Notwithstanding recent growth OIGIS is presently, and is likely to remain, one of the smallest budget-funded Commonwealth agencies.

Despite our relatively small size, I am keen for the office to be known to as many people as possible, so that those with a genuine grievance or concern about an AIC agency will know where they might turn for reliable information and assistance.

One vehicle through which awareness of the office is promoted is a website which provides details of the role and functions of the office, addresses frequently asked questions, and provides a repository for public versions of past inquiry reports and annual reports.

The website, which is located at < http:www.igis.gov.au > also provides guidance on lodging complaints. This guidance is provided in English and in 15 other community languages.

Given the potential for members of the public to be unsure which agency has the jurisdiction to handle complaints about the AIC, we maintain close relations with Commonwealth Ombudsman, and have provided copies of our brochures to the Ombudsman for the information of complainants to that office, whose concerns might be better directed to us.

OIGIS, in turn, also periodically refers complainants to the Ombudsman if the matters which are raised with us are more appropriately dealt with under that jurisdiction.

While it is unlikely that OIGIS will ever have the wherewithal or desire to advertise our existence via the mass-media, I am keen to take up opportunities as they present themselves, to meet with a variety of community groups, media representatives, student groups and academics, to promote a better and more widespread understanding of the activities of this office.

To this end, during 2007–08 I spoke at the following conferences, forums or community events:

a forum arranged by the Law Faculty, University of Sydney (29 August 2007)
the ‘National Security for a Diverse Community’, forum hosted by the Protective Security Coordination Centre in Canberra (24 October 2007)
the Australian Institute of International Affairs, Canberra (22 November 2007)
the Pakistan Association of Australia, Sydney (28 November 2007)
a class of students engaged in intelligence and security related studies at the ANU, Canberra (20 March 2008)
the Australian Federation of Islamic Councils, annual congress Sydney (17 May 2008), and
the ‘Above Board Public Accountability Forum’, Australian National University, Canberra (24 May 2008).

In addition to the above, I was interviewed by a student/community radio station based in Sydney about the work of the office, and also responded to some queries from several journalists throughout the year on matters of topical interest.

I also met with representatives from policy bodies with an interest in the work of the AIC and this office, as well as visiting academics with an interest in the field.

Training

As the AIC continues to grow, and more persons become professionally engaged in intelligence related activities, I believe it is essential for new starters and existing staff to have at least a general knowledge of the role and functions of my office, and the range of activities undertaken.

During 2007–08 my staff and I made at least 40 presentations to approximately 1250 staff drawn from across the six AIC agencies. These presentations were primarily delivered in Canberra, but a number were also provided at different locations across Australia.

The presentations are tailored to each agency or audience but all cover the history and activities of this office, the fundamental importance of agencies acting in accordance with the law and staff acting in an ethical manner and the need for the agencies to maintain public confidence by using their special powers and capabilities judiciously and professionally.

I am also occasionally invited to speak to specialist in-house forums hosted by AIC agencies which are also attended by their international counterparts.

In addition to delivering presentations on the role and functions of OIGIS, members of my staff and I have also attended several agency training courses either as participants or observers and I will look to doing so again during the next reporting period.

International cooperation

During the reporting period, the office again received a number of international visitors. Notable among these were visits from a senior Canadian office holder, as well as senior ranking Japanese officials, who were interested in the manner in which Australia’s intelligence and security oversight and review arrangements work.

IIRA Conference 2008

As indicated in my previous annual report one of my staff and I attended the fifth International Intelligence Review Agencies (IIRA) conference, which was held in Cape Town, South Africa, in October 2006.¹⁴

The IIRA conferences have occurred approximately every two years on a rotating basis between Australia, Canada, the United Kingdom, the United States of America, South Africa and New Zealand.

The next IIRA conference is to be held in New Zealand in the second quarter of 2008-09, and the subsequent IIRA conference will be hosted by Australia, most likely in the second half of the 2010 calendar year.

I am on the working party which is assisting the New Zealand Inspector-General of Intelligence of Security (NZ IGIS) to plan and prepare for the forthcoming conference. I have been happy to assist the NZ IGIS in this task, as his office is even smaller than mine and he is grateful for our input and support, but also it will assist in planning for when Australia next hosts this event.

Significant issues

In 2007–08 my office either had a direct involvement in, or monitored, a number of issues of public interest or significance.

A summary of these issues is provided in this section, with a further discussion of some of these matters also provided in relevant chapters elsewhere in this report.

Review of ONA statutory independence

In the Report of the Inquiry into Australian Intelligence Agencies published in July 2004, the report’s author, Mr Philip Flood AO, recommended that the Inspector-General should conduct periodic reviews of ONA’s statutory independence.¹⁵

So as to facilitate future inquiries of this kind Mr Flood recommended, and the government of the day accepted, that it would be necessary to amend the IGIS Act, through the insertion of a new subsection, namely subsection 8(3)(c), which provides that, the IGIS may:

“at the request of the responsible Minister or of the Inspector-General’s own motion, … inquire into any matter in relation to the statutory independence of ONA.”

Section 35(2) of the IGIS Act was amended at the same time so as to require that the IGIS include in his or her annual report, comments on any inquiry conducted in accordance with the new s8(3)(c). The above changes came into effect on 2 December 2005.¹⁶

As detailed in the IGIS Annual Report 2005–06, I initiated a review of ONA’s statutory independence early in 2006.¹⁷ In so doing, I utilised the longer-standing general inspection powers afforded to the IGIS under section 9A of the IGIS Act, rather than relying on the new subsection 8(3)(c). This was a suitable means of scoping and doing a preliminary exploration of the relevant issues. I concluded that inspection activity with the presentation of a report of my findings to the then Prime Minister, the Hon John Howard AC, on 15 December 2006.

I followed up this initial inspection work with a formal own motion inquiry, as provided for under subsection 8(3)(c) of the IGIS Act, initiated on 14 February 2007.

Work on this inquiry continued throughout much of the calendar year, and culminated in the delivery of a report of this inquiry to the incoming Prime Minister, the Hon Kevin Rudd MP, on 5 December 2007.

A fuller description of these processes and a general summary of my findings is provided in the chapter on ONA and at Annex 3.

Inquiry into DIO analytic integrity

As a logical corollary to my various ONA inspection and inquiry activities, I determined that it would be timely for me to initiate a similarly themed inquiry into the other assessment agency within my remit, namely DIO.

While DIO does not have a statutory basis (unlike ONA), and the provisions of subsection 8(3)(c) of the IGIS Act apply exclusively to ONA, section 8(3)(a)(iii) of the IGIS Act provides that the IGIS may inquire, on his or her own motion, into any matter that relates to:

“the effectiveness and appropriateness of the procedures of that agency relating to the legality and propriety of the activities of that agency”

In interpreting the meaning of this section I believe that the concept of “propriety” can be readily construed to encompass within its ambit the notion that DIO assessment processes should be objective and free from improper direction or influence.

This being so, I wrote to the Minister for Defence, the Hon Joel Fitzgibbon MP, on 29 February 2008 to inform him of my intention to conduct an own motion inquiry into the propriety of the assessment activities of DIO.

Additional information about this inquiry is provided in the “DIO” chapter of this report and also at Annex 4.

This inquiry was close to finalisation at the conclusion of 2007–08. I will naturally provide details of our findings in the next IGIS annual report.

Inquiry into Organisational Suitability Assessment processes

On 5 June 2007 I initiated an own motion inquiry into the Organisational Suitability Assessment (OSA) policies and procedures which are used by DIGO, DIO and DSD as part of determining the suitability of prospective and current employees to work in their respective agencies.¹⁸

The bulk of the work for this inquiry was conducted during 2007–08 and the inquiry concluded when I provided a report of my findings to the Minister for Defence on 15 February 2008.

My office has had a long standing interest in OSA policies and procedures across the AIC, given that my immediate predecessor as Inspector-General, Mr Bill Blick AM PSM, recommended that each of the AIC agencies should undertake mandatory psychological assessments of all current and prospective employees if they were not already doing so.

Mr Blick’s recommendation was accepted by government and the AIC agencies then took action, as necessary, to give it effect.

Given that approximately seven years had passed since Mr Blick had concluded his inquiry, I considered that it was both timely and appropriate for OSA policies and procedures in the Defence intelligence agencies to be subject to review by this office.

The inquiry included consideration of documentation setting out each agency’s OSA policies and procedures, an examination of the psychological testing instruments used, and interviews with staff, human resource managers, psychologists and security experts.

To assist me in this task, I engaged Workplace Research Associates to provide expert advice in the interpretation and assessment of the testing instruments, interview techniques and assessment processes. Workplace Research Associates provided expert advice in the fields of clinical psychology and psychometrics.

I am pleased to say that the general picture of the management of the OSA policies, procedures and practices within the Defence intelligence agencies is a positive one. While a small number of cases which were considered in the course of this inquiry raise issues, these would appear to be an unintended consequence of the OSA evolving to serve two distinct purposes. I concluded that opportunities exist to clarify these purposes and provide additional structure and rigour to the OSA process.

The Defence intelligence agencies have accepted my recommendations and have commenced implementation of them. I am quietly optimistic that if the changes I have proposed are fully implemented they will serve to enhance the utility, reliability and validity of OSA processes.A copy of the executive summary of my report is provided at Annex 5 of this annual report.

NSW coronial inquiry into Mr Brian Peters’ death

In recent annual reports I have made reference to an inquest which had been initiated by the NSW Coroner into the death of the late Mr Brian Peters, in East Timor, in October 1975.¹⁹

Mr Peters was one of five newsmen who were killed in the small village of Balibo, who have over time come to be known in media reporting and other commentary as the ‘Balibo Five’.

The inquest into Mr Peter’s death was conducted by the Deputy NSW Coroner, Magistrate Dorelle Pinch, and concluded when Magistrate Pinch formally brought down her findings on 16 November 2007.

My office had a particular interest in this inquest as 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 Balibo Five could have averted their fate.

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.²⁰

It would not be appropriate for me to provide commentary on Magistrate Pinch’s report, especially as it is readily available to anybody who wishes to read it.²¹ I have, however, selected some extracts from the report, which touch on issues of relevance to this office.

On the question of the level of cooperation received by the inquest from DSD and DSD’s efforts to comply with various subpoenas, Magistrate Pinch noted the evidence:

“… that a taskforce of nine DSD personnel conducted searches of all relevant hard copy files, an exercise which entailed collating literally thousands of documents and reading them … In total, the number of staff hours devoted to this task was estimated at 2,500. Hence, I am satisfied that the most thorough and comprehensive search has been conducted to ensure compliance with the subpoenae.”²²

On the question of access to classified and sensitive documentation, and the transparency of proceedings Magistrate Pinch wrote:

“In recognition of the importance of all of the material to the inquest, the Commonwealth Government agreed that the classified documents could be inspected not only by myself, my Senior and Junior Counsel and their instructing solicitor, but also by Senior Counsel for Ms Tolfree, Mr Stratton S.C. Additionally, those Commonwealth officers – former Government Ministers and Departmental officials – who could give evidence of classified material were provided with the requisite authorizations by the Commonwealth Government under the Crimes Act 1914 and Intelligence Services Act 2001 to speak with my Counsel and instructing solicitor in order to provide Statements.”

“It is also important to note that about 98% of the inquest was conducted in open session … I am satisfied that all matters of substance are now in the public domain, even if not the specific detail.”²³

Returning to the subject of the thoroughness of the searches undertaken by DSD, Magistrate Pinch wrote:

“As noted previously, given the breadth of the subpoena that I issued, the extensive process of cross-referencing that was undertaken and the sworn evidence of [a senior DSD officer] about the searches undertaken to ensure compliance with the subpoena, I am satisfied that all extant classified material of possible relevance to the inquest was made available to myself and those authorized to view it.”²⁴

In respect of allegations which were located at the centre of Mr Blick’s inquiry in 2000–01, Magistrate Pinch wrote:

“I have not seen any Sigint material, received prior to 16 October (1975), in which the Indonesians indicated any knowledge of the presence of either team of the Australian journalists in Balibo. Nor have I seen any intercept in which the Indonesians referred to an intention of killing the journalists.” ²⁵

Magistrate Pinch’s ultimate finding, made in accordance with section 22(1) of the Coroners Act 1980 (NSW) was as follows:

Brian Raymond Peters, in the company of fellow journalists Gary James Cunningham, Malcolm Harvie Rennie, Gregory John Shackleton and Anthony John Stewart, collectively known as “the Balibo Five”, died at Balibo in Timor Leste on 16 October 1975 from wounds sustained when he was shot and/or stabbed deliberately, and not in the heat of battle by members of the Indonesian Special Forces …” ²⁶

I am hopeful that Magistrate Pinch’s report and Mr Blick’s report, taken in their totality, will serve to end speculation that DSD played any role in the death of the Balibo Five, either directly, or via an act of omission.

Inquiry into ASIO’s dealings with Mr Izhar Ul-Haque

Mr Izhar Ul-Haque is an Australian citizen of Pakistani heritage who, following investigations undertaken by ASIO and the Australian Federal Police, was arrested in April 2004 and charged with the offence of training with a proscribed terrorist organisation.

At the time of his arrest Mr Ul-Haque was a 21 year old medical student.²⁷

Mr Ul-Haque’s charges were brought in the NSW Supreme Court in October 2007 but were withdrawn on 5 November 2007, after Justice Michael Adams, of the NSW Supreme Court, found certain evidence against Mr Ul-Haque to be inadmissible. Justice Adams reasons for his decision were publicly released several days later.²⁸

In his decision Justice Adams made a number of very critical comments about the conduct of certain ASIO officers. These comments were principally directed towards two ASIO officers who were assigned the designators B15 and B16 when giving evidence at Mr Ul-Haque’s pre-trial hearings.

Having read the Judgment and reflected on the matter, I decided that it would be appropriate for me to commence an own motion inquiry into:

actions taken by ASIO in respect of Mr Ul-Haque throughout 2003, and
ASIO’s policy, procedures and general practices on the interviewing of persons of security interest, as they stood in November 2003 and currently (if different).

My inquiry commenced on 14 November 2007 and was ongoing at the conclusion of the reporting period.

Administrative inquiry into the arrest of Dr Mohamed Haneef

Dr Mohamed Haneef is medical doctor of Indian nationality who was arrested on 2 July 2007 at Brisbane Airport, on suspicion of various terrorism-related activities.

The circumstances of Dr Haneef’s arrest, the laying and subsequent dropping of charges against him, and his ultimate voluntary departure from Australia have been a subject of considerable debate and not a little public controversy.

On 13 March 2008, the Attorney-General, the Hon Robert McClelland MP, announced the appointment of the Hon John Clarke QC, a retired judge of the New South Wales Court of Appeal, to conduct an inquiry into the above matter. Mr Clarke has been asked by the Government to report back by 30 September 2008.

Details of Mr Clarke’s terms of reference and other important information relating to this inquiry are accessible via the inquiry’s website.²⁹

Although the following information was revealed outside of the 2007–08 reporting period, I should note that it is now a matter of public record that this office conducted an administrative review of some of the key ASIO records of its work in respect of Dr Haneef.³⁰ I had advised the outcome of this administrative review to the Attorney-General in December 2007.

Footnotes

1. My understanding is that when Senator Faulkner is engaged on matters which pertain to the Prime Minister and Cabinet portfolio he is properly titled the Cabinet Secretary, and that when he is engaged in other matters within his remit he is properly titled the Special Minister of State. I will adopt this approach in this report.

2. Cabinet Secretary/SMOS media release number 13/2008 dated 1 May 2008, Cabinet Secretary: Additional Responsibilities, refers.

3. Cabinet Secretary/SMOS media release number 02/2008 dated 5 February 2008, New Arrangements for Merit and Transparency in Senior Public Service Appointments, refers.

4. ibid.

5. IGIS Annual Report 2006–2007, p.16.

6. The Hon Philip Ruddock MP, Attorney-General Media Release 191/2005 dated 16 October 2005.

7. ASIO Portfolio Budget Statement 2008–2009, p. 182. This statement can be viewed on the Attorney-General's Department website (accessed on 4 August 2008).

8. IGIS Annual Report 2006–2007, op. cit. p.16.

9. Prime Minister of Australia Media Release dated 6 February 2008, Secretary of Department of the Prime Minister and Cabinet, refers.

10. P. Flood, Report of the Inquiry into Australian Intelligence Agencies, Canberra, July 2004, pp. 59-60.

11. Section 8 of the IGIS Act was amended to this end via the Intelligence Services Legislation Amendment Act 2005, Act No. 128 of 2005.

12. A fuller description of the handling of such complaints is provided in the “ASIO” chapter of this report.

13. I temporarily suspended some but not all of our privacy review activities with respect to ASIS in April 2008, due to my confidence in the Service’s internal compliance systems, but will review this position in the next reporting period.

14. IGIS Annual Report 2007–2008, ibid, p.23.

15. Flood, op. cit., p.106 and p. 180.

16. These amendments were effected via the Intelligence Services Legislation Amendment Act 2005, Act No. 128 of 2005.

17. IGIS Annual Report 2005–06, pp. 52–53.

18. This inquiry was conducted in accordance with sections 8(2) and 8(3) of the IGIS Act.

19. IGIS Annual Report 2005–06, pp. 8-9 and IGIS Annual Report 2006–07, pp. 25–26.

20. An unclassified version of Mr Blick’s report was published at Annex 3 to the 2001–02 IGIS Annual Report, pp. 82–90.

21. This report can be found on the Lawlink website, following the links to ‘Brian Peters’ (accessed 6 August 2008).

22. ibid, Inquest report p. 12.

23. ibid, p. 13.

24. ibid, p. 77.

25. ibid, p. 90.

26. ibid, p. 129.

27. Mr Ul-Haque has subsequently completed his undergraduate medical studies and has recently been formally conferred the title of Doctor but as at the dates referred to in this section this was not the case. I have therefore referred to him by the title “Mr” for the purposes of this report.

28. R v Ul-Haque [2007] NSWSC 1251, which is available on the Lawlink website (accessed 6 August 2008).

29. The Clarke Inquiry website (accessed on 6 August 2008).

30. ibid, unclassified ASIO submission dated 25 July 2008, p.3.

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Inspector-General of Intelligence and Security