Annual Report 2003 - 2004

AUSTRALIAN SECRET INTELLIGENCE SERVICE

What ASIS does

220. ASIS collects foreign intelligence, relying on human sources to obtain information. It produces and disseminates intelligence reports to key government decision-makers.

221. ASIS was established by executive order on 13 May 1952 and operated under government directive until the Intelligence Services Act (ISA) came into effect on 29 October 2001.

222. ASIS's intelligence collection and reporting activities are regulated by ministerial directions, ministerial authorisations and privacy rules, which have been made pursuant to the ISA.

223. Intelligence priorities for ASIS and other members of the AIC are established in a planning document that is endorsed and regularly reviewed by the National Security Committee of Cabinet.

224. Further information about ASIS is at, http://www.asis.gov.au.

significant issues

Intelligence Services Act

225. I have described in some detail in 'The Year in Review' chapter of this report the rationale for, and the process by which, the ISA was amended to permit ASIS people overseas to be protected through the use of weapons.

226. This was a very significant amendment and has important practical consequences for both ASIS and this office.

227. When the guidelines are finalised, this office will take a close interest in implementation, including all approvals for weapons to be carried and what actually occurs in those instances.

228. In his last annual report, Mr Blick made particular reference to section 14 of the ISA. That section provides that a staff member of ASIS or DSD is not subject to civil or criminal liability for certain acts that might otherwise attract liability, provided that the act is done in the proper performance of a function of that agency.

229. A further provision of that section empowers the Inspector-General to certify in writing facts relevant to whether an act was done in the proper performance of the agency's functions.

230. Mr Blick observed that it was necessary following passage of the ISA to develop protocols to ensure that, in the event of any claim for immunity under the legislation, there would be an appropriate mechanism, involving consultation with the Inspector-General, to enable law enforcement agencies to consider the legitimacy of the claim.

231. ASIS has taken the lead in the development of these protocols and has been closely working with law enforcement agencies in all Australian jurisdictions to develop a common approach. This work has not been completed more quickly due to the large number of stakeholders with an interest in this matter and the desire of all parties to get it right.

232. Protocols have been finalised with most police services and I am hopeful that the remainder will be finalised shortly into the new reporting period.

233. As mentioned earlier in this report, a review of the Intelligence Services Act is expected to occur in the 2004-05 reporting period.

Media reporting on ASIS

234. There was some significant media comment on ASIS in the last half of the reporting period:

235. I discussed these articles with the Director-General and was also shown the advice provided to the Minister for Foreign Affairs.

236. I concluded that in these instances there was no basis on which I should initiate an inquiry under the IGIS Act.

Inspection activities

237. Shortly after being appointed I wrote to the Director-General of ASIS listing the inspection activities I proposed to undertake as Inspector-General. The program I proposed was similar to that undertaken by Mr Blick, with some minor refinements to reflect recent developments.

238. The major inspection activities undertaken by this office involving ASIS during the reporting period have included:

239. In writing to the Director-General, I proposed that following each inspection activity I would write to him reporting the results and outlining any issues raised during the inspection. This has occurred.

240. We also agreed on procedures should I form the view that any matter arising from an inspection needed to be brought to the attention of the Minister for Foreign Affairs or the Prime Minister. No such matters arose during the reporting year.

Intelligence Services Act and privacy rules issues

241. Since coming into effect in October 2001, the ISA has brought about a number of significant changes in the way ASIS goes about its business.

242. One significant change was the requirement under section 15 of the ISA for ASIS to make written rules regulating the communication and retention by the Service of intelligence information concerning Australian persons. (The ASIS and DSD privacy rules, which are essentially identical, were published at Annex 4 of the IGIS Annual Report for 2001-2002 and can also be accessed on the ASIS and DSD websites).

243. One of the major inspection activities of this office in respect of ASIS involves us reviewing ASIS's output of reports on a daily basis for references to Australian persons, and judging whether these references comply with the requirements of the ISA (in terms of collection) and the privacy rules (in respect of reporting and dissemination).

244. There is no prohibition on ASIS referring to Australian persons in their reporting, but there is a requirement that any such reporting be justified against strict criteria which are spelt out in the privacy rules.

245. In the past, Mr Blick has asked ASIS to maintain records of all instances when references are made to Australian persons in their reporting and to also specify the criterion upon which those references had been justified.

246. The office stopped inspecting these records for a time during the reporting period due to differing perspectives on the utility of the records being kept.

247. As a means around this impasse, Mr Blick suggested that clearer internal guidelines should be developed for the benefit of reporting staff. Mr Blick envisaged that these internal guidelines would set out how the privacy rules should be applied, as well as providing guidance on how the related 'audit' coversheets should be prepared for consideration by this office.

248. Work on these guidelines was continuing at the end of the reporting period. In the meantime, my staff and I have been vigilant in identifying any reports which could raise privacy concerns and discussing these with relevant ASIS staff.

249. A second significant change brought about by the ISA is that a formal process has been created whereby Ministerial Authorisations must be sought to provide legal authority for certain of ASIS's activities.

250. One practical effect of this change is that the Minister for Foreign Affairs, rather than the Director-General of ASIS, is responsible for approving any activities carried out for the purpose of collecting intelligence on Australian persons.

251. Given that ASIS is a foreign intelligence collector there are very few instances were ASIS seeks ministerial authorisation to deliberately collect intelligence information on Australian persons.

252. My office reviews all Ministerial Authorisations, and I am satisfied on the basis of these inspections that ASIS only seeks approval to collect intelligence information on Australian persons where there is a sound basis for doing so, and that the submissions referred to the Minister contain sufficient detail for well informed decisions to be made.

253. Section 32B of the Inspector-General of Intelligence and Security Act 1986 requires that the Inspector-General be given a copy of all directions or guidelines given by the responsible Minister to the head of ASIS, as soon as possible after they have commenced. Having reviewed those submissions provided to the Minister for Foreign Affairs in respect of Ministerial Directions and other guidelines, I am satisfied that this requirement has been met.

Review of operations

254. Mr Blick engaged Mr Ron McLeod AM as a consultant during the reporting period, to assist in the office's rolling review of ASIS's current operational files. The purpose of this review activity is to monitor whether ASIS's operations are being conducted with legality and propriety.

255. Mr McLeod was well placed to undertake this task given his experience as Inspector-General of Intelligence and Security between 1995-98, and Commonwealth Ombudsman between 1998-2003.

256. Mr McLeod conducted inspection visits on an average of approximately two days each month between April and December 2003.

257. Upon becoming Inspector-General, I chose to conduct this activity myself (with assistance from one of my staff), so that I might gain a first hand appreciation of this aspect of ASIS's work.

258. This review activity naturally has a retrospective focus as I agree with the view that it is not the place of the IGIS to second-guess operational decisions as they occur, or attempt to manage operational matters at one remove.

259. One good reason for this is that this office does not have the expertise to provide such input. Another reason is that if the IGIS offered real-time operational advice and this influenced decision-making in the field, a conflict of interest could arise if those actions were subsequently called into question. Operational case management is rightly the prerogative of ASIS managers, and not something in which this office seeks to directly involve itself.

260. For the most part, the operational cases reviewed by this office in 2003-2004 were well planned, well run, and delivered outcomes that were of significant benefit to the national interest.

261. However, Mr Blick and I did raise a number of issues with the Director-General of ASIS. While it is not possible to comment in detail on each of these matters in a public report, they included:

262. The Director‑General has provided considered replies in all instances where we have received a response. Several matters remained outstanding at the end of the reporting period.

263. In addition to raising issues of this kind, senior managers in ASIS frequently brief me on issues of common interest.

Use of assumed identities

264. Recent amendments to the Crimes Act 1914 require Commonwealth agencies that issue or use alternate identity information to maintain appropriate records.

265. The amendments also require ASIS to, as soon as practicable after 30 June each year, provide the Inspector-General with a report for the preceding 12 months.

266. The report provided to this office for the 2003‑2004 reporting period revealed no evidence of fraud or any other unlawful activity.

Contact with staff

267. A significant number of ASIS officers meet with me prior to their overseas postings. The purpose of these meetings is to remind ASIS representatives of the role and functions of this office.

268. I also meet with heads of mission who are being sent to posts where ASIS staff are present, to discuss any issues or concerns they might have prior to their departure.

269. I consider these meetings to be an important means of reinforcing with ASIS personnel that their actions are subject to on-going external scrutiny no matter where they are posted, and that they are obliged to conduct themselves in an appropriate manner at all times.

270. In addition to these pre-departure meetings, members of my staff and I regularly attend training sessions for ASIS officers and inductees, addressing them on accountability issues and the work of the office.

271. Neither Mr Blick nor I travelled overseas in the period covered by this report; consequently we did not inspect any ASIS stations during this time.

Complaints and inquiries

272. No complaints about ASIS were carried over into the 2003‑04 reporting period. Five new complaints about ASIS led to preliminary inquiries, whilst Mr Blick initiated one 'own motion' inquiry.

273. In addition to these matters eight persons contacted our office with queries or concerns about ASIS which were handled without need for inquiry action.

274. A summary of some of the full or preliminary inquiries processed during the reporting period is provided below.

Own motion inquiry

275. Mr Blick was briefed on a personnel management matter in January 2002.

276. In November 2003, the Director-General of ASIS briefed Mr Blick on the processes which had been followed in an attempt to bring this matter to a conclusion. The Director-General informed Mr Blick that one of the parties (who had resigned from ASIS) was particularly unhappy with how the issue in question had been handled.

277. On the basis of the information provided by the Director-General, Mr Blick initiated an 'own motion' inquiry. I took over the management of this inquiry following my appointment. This inquiry was still on-going at the completion of the reporting period.

Recruitment related complaints

278. As has been mentioned elsewhere in this report, all members of the intelligence community have received a significant boost to their budgets in recent years. Much of this additional funding has been used to recruit new staff.

279. Given the rate at which the intelligence community has been expanding the number of recruitment related complaints received by this office, while increasing, is actually quite small.

280. This office received three recruitment related complaints about ASIS during the reporting period.

281. In one case, ASIS engaged in an extensive dialogue with a highly regarded candidate before ultimately determining that his application could not succeed. The complainant was concerned that the process was inherently unfair and unnecessarily prolonged.

282. Mr Blick concluded that while there were things which could have been done better the decision of the Service not to engage the complainant was reasonable.

283. Mr Blick accepted that while the selection process was prolonged this was because ASIS had genuinely sought to find a way to overcome certain impediments.

284. The office also received complaints from two other persons who had unsuccessfully applied for positions within ASIS. In each instance the complainants expressed disappointment at what they regarded as a 'one size fits all' approach by the Service to the provision of feedback.

285. In the first case Mr Blick concluded that while such an approach is appropriate in the early stages of some selection exercises, it would be appropriate for the Service to tailor its advice to the circumstances of individuals who had applied for specific rather than generic positions, bearing in mind the paramount interests of security.

286. Investigations into the second complaint of this kind were commenced by Mr Blick and concluded by me following my appointment.

287. At the completion of my inquiries I strongly endorsed the general philosophy espoused by Mr Blick but concluded that in this case there was little more by way of further feedback which the Service could have provided.

288. Although our investigations did not provide the outcome that the complainants wished for (ie. an offer of employment), our inquiries did serve to generate useful debate and genuine consideration of the appropriate balance between security on one hand and accountability on the other.

289. I will continue to encourage feedback in those cases where security is not an issue.

Security checking

290. The then Inspector-General, Mr Blick, received a complaint in September 2003 from an employee of an AIC agency whose application for a position in ASIS was halted without explanation. The complainant suspected that the application might have been suspended on specious security grounds.

291. The complainant expressed concern not only about missing out on an attractive employment opportunity but if the application had been ruled out on security grounds, this might have adverse consequences for their continuing employment within the AIC.

292. Mr Blick suggested that ASIS's security staff should re-interview the complainant, so that the complainant might put their position and directly clarify any misunderstandings which might have arisen.

293. Mr Blick also referred those aspects of the complaint which fell outside of his jurisdiction to another agency, for independent investigation.

294. Following adoption of the process suggested by Mr Blick, the complainant was able to satisfactorily address all security related concerns put to them. The complainant was ultimately selected for a position in ASIS.

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