Annex 2

Text of letter sent by Director DSD to the 'Sunday' program

Mr Ross Coulthart
Reporter – SUNDAY Program
Nine Network Australia Pty Ltd
24 Artarmon Road

Dear Mr Coulthart

As we discussed I am not able to respond to all of the detailed points in your questions, because to do so would compromise classified aspects of DSD's operations. However, the following points are provided in response to those elements of your questions which deal with DSD's role and functions and the privacy of Australian citizens.

  • DSD's purpose is to support Australian Government decision-makers and the Australian Defence Force with high-quality foreign signals intelligence products and services. DSD makes Government and defence policy more certain and more effective by providing important information that is not available from open sources. DSD also directly contributes to the military effectiveness of the ADF, and provides information security services to ensure that sensitive electronic information systems are not susceptible to unauthorised access, compromise or disruption.
  • SD operates under a Government Directive (available at . The Directive specifically provides that DSD shall operate in conformity with Australian law, and that includes the Telecommunications (Interception) Act.
  • Priorities for intelligence-gathering by DSD are established by the Cabinet National Security Committee. All tasking of DSD is carefully documented and monitored to ensure that these priorities are followed, and that all DSD activities support Australia's national interests. The Inspector-General of Intelligence and Security (IGIS) has full access to these processes.
  • To ensure that its activities do not impinge on the privacy of Australians, DSD operates under a detailed classified directive approved by Cabinet and known as the Rules on Sigint and Australian Persons. Compliance with this Directive is monitored by the Inspector-General.
  • The former Inspector-General conducted a system audit of the operation of the Rules within DSD in 1997. At that time he reported to the Minister for Defence that in overall terms the Rules were working well and that the risk of inadvertent breaches was quite low. Nevertheless he identified a number of areas where the Rules could be improved and these improvements were incorporated in revised Rules which the Government endorsed in 1998.
  • The Rules prohibit the deliberate interception of communications between Australians in Australia; the dissemination of information relating to Australian persons gained accidentally during the course of routine collection of foreign communications; or the reporting or recording of the names of Australian persons mentioned in foreign communications.
  • The Rules do provide mechanisms to permit DSD to monitor and report foreign communications involving Australians in some special carefully-defined circumstances such as the commission of a serious criminal offence; a threat to the life or safety of an Australian; or where an Australian is acting as the agent of a foreign power. Specific approval is required for all such collection and reporting.
  • Such circumstances are infrequent, and safeguards are provided to ensure that the privacy of Australians is not compromised. Similarly, safeguards exist to ensure that any inadvertent collection of Australian communications are destroyed. These procedures and safeguards are monitored on a case-by-case basis by the Inspector-General. These provisions mean that DSD's operations are consistent with the Government's commitments to the protection of the civil liberties and privacy of Australians. The Inspector-General is also tasked with investigating any public complaints into DSD activities.
  • DSD does cooperate with counterpart signals intelligence organisations overseas under the UKUSA relationship. Both DSD and its counterparts operate internal procedures to satisfy themselves that their national interests and policies are respected by the others. In Australia's case, these processes are subject to review by the Inspector-General.
  • The Inspector-General provides annual reports to the Prime Minister and to Cabinet on the results of his monitoring of DSD's compliance with Australian law and the Rules on Sigint and Australian Persons. These reports are also made available to the Leader of the Opposition. A summary of his findings is included in his public Annual Report, which is tabled in Parliament .

I make the additional point that a number of your questions seem premised on the proposition that there are intelligence-gathering facilities operated by foreign governments in Australia. All intelligence and surveillance facilities in Australia are operated by Australian agencies, or jointly by Australian and US agencies. All activities at joint facilities are conducted with the full knowledge and concurrence of the Australian Government, and Australian staff are fully integrated at all levels, including senior management.

Yours sincerely


Martin Brady
Director, DSD

16 March 1999