AUSTRALIAN SECURITY INTELLIGENCE ORGANISATION

WHAT ASIO DOES

63. The Australian Security Intelligence Organisation is Australia’s security service. Its functions are set out in the Australian Security Intelligence Organisation Act 1979. It is also subject to guidelines issued by the Attorney-General.

64. ASIO’s main role is to gather information and produce intelligence that will enable it to warn the government about activities or situations that might endanger Australia’s security. It is not a law enforcement agency.

65. The focus of ASIO’s work is on terrorism, people who may act violently for political reasons, and people who may clandestinely obtain sensitive government information or otherwise harm Australia’s interests in order to further their own causes or the interests of foreign governments.

66. ASIO does not investigate lawful protest activity or engage in surveillance of ordinary members of the community going about their normal business. It has to obtain specific ministerial authority for use of its most intrusive powers, such as telecommunications interception and listening devices.

67. Other ASIO functions include collecting foreign intelligence in Australia, and providing security assessments and protective security advice.

68. Further information about ASIO, the Attorney-General’s guidelines and the Australian Security Intelligence Organisation Act 1979, can be found on ASIO’s Internet homepage located at http://www.asio.gov.au.

AWARD TO Director-General

69. The Director-General of Security, Mr Dennis Richardson, was awarded an AO in the 2003 Queen’s Birthday Honours list in recognition of his outstanding public service in a variety of portfolios over many years. I congratulate Mr Richardson on this award.

INSPECTION ACTIVITIES

Context of ASIO activities

70. The terrorist attacks of 11 September 2001 vividly demonstrated to the wider community the lethal threat posed by individuals and groups who are committed to using violent means to achieve their objectives.

71. The need for more active intelligence collection was reinforced, if this was necessary, by the terrorist outrage that occurred in Bali on 12 October 2002.

72. Australian involvement in armed conflict in the Persian Gulf and various military deployments elsewhere has also contributed to the increasingly complex security environment in which Australia now finds itself.

73. ASIO’s response to these developments has of necessity led to a significant increase in its operational activities.

74. While the majority of ASIO’s activities are hidden from view and are therefore unlikely to attract public attention, some, such as the overt execution of entry and search warrants, will inevitably bring attention to the Organisation.

75. It is perhaps not surprising that the public profile of ASIO has been greater in the past 12 months than at almost any time in its existence.

Scope and reporting arrangements

76. As ASIO is principally a national security agency, it is the agency most likely to come into contact with members of the Australian public. There are therefore more, and a wider range of, activities that require ongoing review by the Inspector-General than there are with other agencies.

77. During the reporting period, we inspected the following categories of ASIO activity:

• warrant operations;

• records of operations carried out under authorities to investigate;

• access to, and use of, information obtained from the Australian Transaction Reports and Analysis Centre and the Australian Taxation Office;

• provision of information to, and liaison with, law enforcement agencies;

• the official use of alternative documentation to support assumed identities; and

• compliance with the Archives Act.

78. The Director-General and I have agreed that if any concerns or matters worthy of comment arise during inspection activities, my staff or I will normally discuss them with an appropriate senior manager or liaison officer in the first instance.

79. Following each inspection I write to the Director-General outlining the pertinent issues. In each case ASIO has provided a considered response.

80. The Director-General and I have also agreed procedures to apply if I form the view that any matters arising from an inspection need to be brought to the attention of the Attorney-General or the Prime Minister. As in previous years no such matters arose during the 2002-2003 reporting period.

Warrant operations – procedures

81. The Attorney-General issues warrants to ASIO authorising the use of special powers such as intercepting telecommunications, using listening devices, entering and searching premises, intercepting mail, using tracking devices and remotely accessing computers.

82. We visit ASIO’s central office approximately every eight weeks, and state offices as the opportunity arises, to inspect documentation associated with current or recently concluded warrant operations.

83. To ensure that ASIO does not seek warrants without proper justification, thorough planning and appropriate consideration at various levels of approval, we check ASIO’s files for documents showing:

• the intelligence or security case that ASIO has made in support of the application;

• that the people named in warrants are in fact those of interest to ASIO;

• that appropriate internal approvals for the request have been obtained;

• the persons to whom the Director-General has given authority to execute the warrant or to communicate information obtained from a warrant;

• the Attorney-General’s approval, when obtained;

• reports to the Attorney-General of the outcome of executed warrants; and

• that the activity concerned did not begin before, or continue after, the period approved by the Attorney-General.

84. In the course of our rolling visits programme we aim to inspect documentation for all warrants issued.

85. During the reporting period we reviewed a large number of warrant operation files several times, in order to be satisfied that ASIO prepared reports of the outcomes and provided them to the Attorney-General within the requisite time.

86. In each case we were satisfied that ASIO had:

• reasonable grounds for seeking a warrant - our experience is that the Director-General only seeks warrants when there are sound operational requirements for their use and the information cannot be obtained by less intrusive means;

• provided sufficient information for the Attorney-General to make an informed decision - the Director-General personally signs each request to the Attorney-General for issue of a warrant and the Attorney-General’s Department provides separate legal advice to the Attorney in relation to each request;

• appropriate procedures in place to check that the conditions of the warrant were being fulfilled;

• reported the results of warrant operations to the Attorney-General in a balanced and timely manner; and

• maintained the key accountability documents on the relevant files.

Unauthorised telephone interception

87. We noted three instances of inadvertent unauthorised telephone interception caused by human error. This compares with five during the 2001-2002 reporting period. Details are as follows:

• Since warrants expire after six months, in some cases it is necessary to seek renewal of a warrant, with the new warrant timed to begin on expiry of the old. For various reasons, however, there may sometimes be a gap between the two, in which case ASIO ceases collection until the new warrant comes into operation. In the case in question, despite ASIO taking all reasonable precautions to remove all target numbers from coverage during this gap period, one number escaped being disconnected. No intercept obtained from this number in the gap period was processed and ASIO took appropriate steps to minimise the risk of any repetition.

• Shortly after renewal of a warrant a subscriber had a target service disconnected, following which the carrier reallocated the number. ASIO did not become aware of this for several weeks, during which time a significant number of dialling events were collected but not processed due to their short duration. Upon realising that the target service had been reallocated ASIO immediately ceased its coverage, destroyed all intercepted material, informed the Attorney-General, and had the relevant warrant revoked; and

• In another case the subscriber had a service disconnected before the relevant warrant lapsed. ASIO inadvertently reconnected this service to its collection system when the warrants for some related services were renewed shortly afterwards. ASIO, however, picked up the error before the service provider could reallocate the service, so no unauthorised intercept was received. The officers involved were counselled to be more vigilant in the future. I accepted that the error was inadvertent and endorsed the remedial action taken as appropriate.

Search warrants

88. ASIO conducted a number of overt searches of premises under warrant authority during the reporting period.

89. Several of these searches led to complaints to this office. A description of these matters is provided under the inquiries and complaints section elsewhere in this chapter.

Foreign translators

90. During the reporting period I asked ASIO to explain the rationale for using foreign assistance in two operations, and to sight the undertakings these officers were required to complete in respect of the handling of processed material relating to Australian persons.

91. In each instance the Director-General of Security provided detailed responses and copies of the signed undertakings. I found these responses to be satisfactory.

Transcription errors

92. During the reporting period we noted two instances of errors on the face of warrants.

93. In the first instance, shortly after intercept began being processed it became apparent that the name on the warrant was a mixture of the name of the target identity and that of a relative living at the same residence.

94. ASIO immediately ceased collection and conducted urgent research to separately identify the two people.

95. Following this the faulty warrant was revoked, and ASIO sought new warrants to separately target both identities. I endorsed the corrective action taken by ASIO in this case.

96. In the other instance we noticed that the number of a warrant submitted to the Attorney-General for signature did not correlate to the associated warrant request number.

97. Although this clerical error is minor, I have asked ASIO to examine the effect of this error on the validity of the warrant.

Minor procedural matters

98. Several minor procedural issues also came to notice during inspections, mainly relating to the absence of some accountability documents. In each case the missing documents were quickly located and presented for review.

99. Given the increasing number of warrants that have been sought in recent years, the incidence of error is low.

Authorities to investigate - procedures

100. The authority to investigate (ATI) process involves applications by ASIO staff to more senior officers for authority to conduct investigations in relation to people or organisations.

101. We regularly inspect the records of the ATI consideration process and the files recording the resulting investigative activity.

102. During the reporting period we examined files relating to every ATI issued in ASIO’s central office and a selection of those issued in ASIO’s other offices.

Authorities to investigate – results of inspections

103. As with warrant operations, detailed public discussion of specific cases is not possible but comment follows in general terms upon several cases reviewed during the reporting period.

104. In one case we queried a particular ATI, which we considered was expressed in too general terms. As there was no question about the appropriateness of the proposed investigation, we suggested that it should be authorised at a higher level within the Organisation, via a different approvals mechanism.

105. In another case the purpose of an ATI was not clear from the description provided in the ‘Objectives of Investigation’ field on the relevant form. We sought and obtained a full briefing on the investigation, receiving satisfactory responses to all our queries.

106. We also raised a number of more minor procedural issues associated with the raising and approval of ATIs.

107. Last year’s annual report commented that the quality of ATIs had improved during that reporting period. This trend continued during the 2002-2003 reporting period.

108. On the basis of our inspections, ASIO’s responses to the various questions we posed and the responses of senior management to our comments, I consider that the ATI regime is operating to ensure that ASIO only conducts investigations that are properly justifiable by reference to its statutory functions.

109. I am confident that the arrangements strike an appropriate balance between the operational needs of ASIO and the need to protect people’s privacy.

ASIO and law enforcement agencies

110. The increased focus on terrorism during the reporting period necessarily involved close cooperation between ASIO and law enforcement agencies.

111. As has been described elsewhere in this report, ASIO required the assistance of various federal and state law enforcement bodies in the course of executing a number of entry and search warrants. We received a number of complaints flowing from these joint operations.

112. The resultant inquiries revealed some systemic issues, one of which was the need for clearer definition of the respective roles and responsibilities of ASIO and the police forces when acting under the authority of search warrants issued to ASIO. I intend pursuing this matter further in the 2003-2004 reporting year.

113. More generally, during our periodic visits to ASIO regional offices we examine ASIO’s records of exchanges of information with local law enforcement agencies.

114. We found these records to be properly maintained and sufficiently detailed for us to conclude that the exchange of information that occurs does not exceed what is necessary for the performance of the functions of the organisations concerned.

AUSTRAC and the Australian Taxation Office

115. The Financial Transactions Reports Act 1988 and the Taxation Administration Act 1953 provide for ASIO to obtain information from the Australian Transaction Reports and Analysis Centre (AUSTRAC) and the Australian Taxation Office, in strictly prescribed circumstances.

116. The procedures involved in ASIO accessing financial transaction reports and taxation information are set out in memoranda of understanding (MOUs) between the respective parties.

117. The Inspector-General of Intelligence and Security and the Director of AUSTRAC have also entered into a MOU covering oversight issues and the Inspector-General provides an annual report to the Attorney-General on ASIO’s compliance with its obligations.

118. We regularly review ASIO’s access to financial transaction reports and it is apparent from this that ASIO is complying with the requirements of the MOU between itself and AUSTRAC.

119. ASIO has formal internal procedures for approving access to AUSTRAC information similar to those applying to ATIs. They require ASIO investigators who need information about financial transactions to obtain approval from senior officers. Interrogation of the databases is not undertaken by the investigator who requires the information but by an officer specially authorised and trained for the task. Under the memorandum of understanding between ASIO and AUSTRAC the maximum number of authorised officers at any one time is twelve.

120. The procedures require that, before access is approved, the entity under investigation also be the subject of an ATI.

121. We also review instances of ASIO obtaining access to taxation records and its compliance. It is apparent that, as with access to AUSTRAC records, ASIO is complying with the requirements of the MOU between itself and the Australian Taxation Office and is careful not to abuse the access to which it is entitled.

Use of assumed identities

122. Amendments to the Crimes Act during 2001-2002 require Commonwealth agencies that issue or use alternate identity documentation, to maintain appropriate records.

123. The amendments require ASIO, as soon as practicable after 30 June each year, to give the Inspector-General a report for the year.

124. The report for 2002-2003 showed that ASIO issued a small number of authorisations under the legislation for use of assumed identities by intelligence officers.

Archives issues

125. The Director-General of Security provides our office with quarterly progress reports on ASIO’s performance in meeting its obligations under the Archives Act 1983. I also meet periodically with relevant ASIO staff to discuss their handling of significant archive issues.

126. We sometimes receive complaints about the handling of archives access requests but the incidence of such complaints has declined in recent times. People who are dissatisfied with decisions on archives applications have the right to have them reviewed by the Administrative Appeals Tribunal.

127. There have been resource pressures in recent times arising from the increased focus on terrorism. Performance, however, has been satisfactory considering the competing priorities, with large numbers of documents cleared for access. Based on our occasional inspection activities, our interaction with archives staff and the progress reports we receive, I am satisfied that ASIO is committed to processing access requests as quickly and efficiently as it can, and to otherwise meeting its obligations under the Archives Act.

Contact with staff

128. I regularly participate in training sessions for ASIO officers and inductees, addressing them on accountability issues and the work of this office.

129. ASIO officers also brief me from time to time on matters that touch upon the work of the office, or to seek an independent opinion.

130. The Director-General places no barriers to contact between ASIO staff and members of this office. Indeed he encourages such contact and does not seek to monitor or control it in any way. For our part, we seek to use this freedom of access positively and responsibly so as to minimise any adverse impact on the work of the agency.

COMPLAINTS AND INQUIRIES

131. During the reporting period 32 complaints about ASIO were concluded without proceeding to a preliminary inquiry (compared with 23 such cases in 2001-2002).

132. Four outstanding matters were carried over from the previous reporting period. The office conducted preliminary inquiries into 19 new complaints about ASIO, an inquiry into whether Australia’s intelligence agencies had any warning of the Bali bombings (which naturally included ASIO), and one preliminary inquiry which also involved approaching each agency (see Annex 1).

133. In conducting inquiries I sought briefings on a range of subjects, as well as access to files and to individuals. The Director-General of Security met all such requests.

134. I conducted no ‘own-motion’ inquiries into ASIO’s activities during the reporting period

135. Some of the complaints dealt with during the reporting period are summarised below.

Search warrants

136. The 2001-2002 annual report described a complaint alleging, among other things, that a computer, seized in an ASIO search, was damaged when returned to its owner. ASIO, however, had claimed that it was functioning correctly.

137. At my request the complainant’s lawyer obtained a report from a computer technician. The report described a number of defects in the computer, which the complainant said did not exist before the search, but the report did not indicate when they might have been caused.

138. Since the report was prepared many months after ASIO returned the computer, I took possession of the computer and had a technician examine the hard disk, to try and establish whether the computer had been used after ASIO returned it to its owner.

139. The results of this report suggested that, although the computer may indeed have been used, it was not in the same condition when returned as when ASIO seized it.

140. ASIO subsequently agreed to my suggestion that it offer the complainant compensation and the complainant accepted the offer.

141. In another case the legal representative of a complainant, after examining the search warrant, alleged that the search took place at premises other than those specified in the warrant.

142. On inquiry it appeared that ASIO officers in fact presented the warrant at the right premises but the occupant, who was a relative of the person whose premises they were authorised to search, told them that they could find that person in nearby premises, to which he would lead them.

143. He took the ASIO officers and accompanying police to the other premises and they began the search in accordance with normal procedures, only to realise after a short time that they were not at the address specified in the warrant.

144. They immediately withdrew without removing any property and destroyed the recordings they had begun making.

145. I concluded that the error was unintentional. Nevertheless the search was unauthorised and I recommended that ASIO negotiate with the complainants to reach a mutually acceptable settlement. Those negotiations were still in progress at the close of the reporting year.

146. A number of other people whose residences ASIO searched complained about various aspects of the searches.

147. The principal allegation was that they were, in effect, detained and prevented from going about their normal business. Search warrants do not authorise the detention of people and if people whose premises are being searched wish to leave they are at liberty to do so.

148. When conducting an overt search under warrant ASIO obtains assistance from the Australian Federal Police and State police, principally at the start of the search, to gain entry to the premises and ensure that risks to persons involved in the search are minimised.

149. In doing this, although acting under the authority of the warrant issued to ASIO and with the benefit of ASIO intelligence about the risks, the police use their own judgment about the techniques to use.

150. A good number of the complaints about conduct related to incidents alleged to have occurred at the initial stages of searches and appeared to be about police behaviour.

151. I therefore encouraged complainants in such cases to exercise rights to have police behaviour reviewed. The Commonwealth Ombudsman became involved in investigations under the Complaints (Australian Federal Police) Act.

152. At the close of the reporting year the inquiries were in their final stages. I expect that they will result in some suggestions for procedural improvements that could reduce the probability of complaints about ASIO when it conducts searches in the future.

Recruitment practices

153. There were several complaints from people who applied for positions in ASIO but were unsuccessful.

154. Such complaints tend to arise when ASIO has decided to reject applicants on organisational suitability grounds after initial psychological testing.

155. In these circumstances some applicants, normally those employed or expecting to be employed elsewhere in the public sector, are concerned less with the decision not to employ them than with the possibility that their future security status may be affected.

156. The conduct and assessment of psychological tests involves the exercise of professional judgment which it would be inappropriate for the Inspector-General to try and second guess. In the absence, therefore, of procedural deficiencies the Inspector-General will not be able to recommend change to ASIO’s decisions.

157. We can, however, reassure complainants that failure to meet ASIO’s occupational suitability requirements does not necessarily have implications for their ability to obtain security clearances for other areas of Commonwealth employment.

Compensation for asylum seeker

158. Previous annual reports have described a complaint made on behalf of an asylum seeker who was detained for many months longer than he should have been due to a defective ASIO security assessment.

159. In 1999 I invited the asylum seeker’s legal representative to submit a detailed claim for compensation. After many reminders the claim arrived shortly before the close of the reporting year.

160. The claim was in excess of what appeared justifiable and I referred it to the Australian Government Solicitor for advice. I expect to recommend that ASIO pay a lower, but still significant amount and to finalise this complaint during the first part of the new reporting year.

Bali terrorist attack

161. ASIO provided full and enthusiastic assistance with the conduct of this inquiry, devoting major resources to the task of identifying and bringing to attention possibly relevant material. The body of the final report is classified, but the unclassified introduction and summary is at Annex 2 to this annual report.

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