National Integrity Spotlight – February 2024

7 March 2024
Cinzia Donald, Partner, Perth (Lavan) Kelly Griffiths, Partner, Melbourne Daniel Maroske, Partner, Brisbane Kathy Merrick, Partner, Sydney Jack Tipple, Special Counsel, Sydney

In this month’s edition of the National Integrity Spotlight, we consider the most recent updates from the NACC, developments from various state corruption and integrity bodies, a new OAIC investigation, and recent notable updates from the AFP.

NACC Update

Referral and Assessment Update

The National Anti-Corruption Commission (NACC) continues to provide regular updates on the number of referrals received, the assessment process, and investigations underway.

Key data from 1 July 2023 through to 3 March 2024 suggests that:

  • 2,594 referrals were received;
  • 2,009 referrals were excluded at the triage stage of assessment as they did not involve a Commonwealth public official or did not raise a corruption issue;
  • 160 referrals are pending triage;
  • 216 referrals are currently under assessment;
  • 233 referrals have been assessed; and
  • 13 new investigations have been commenced, including four which will be jointly investigated.

Commissioner Brereton delivers address on ‘Rebuilding trust and integrity in the Australian Public Service’

On 11 February 2024, Commissioner Paul Brereton delivered an address at The Mandarin’s 2024 conference, focused on the first seven months of the NACC’s operations and the implications and lessons for the public service.

Commissioner Brereton stated that integrity within the public service is critical to ensuring honest and impartial exercise of public power, defining integrity as “involving making decisions and giving advice honestly and impartially, on the evidence and the merits, in the public interest and without regard to personal interest; accepting responsibility for it, including for mistakes; and reporting honestly.”

Commissioner Brereton stated that the commencement of the NACC saw the emergence of a number of significant integrity issues, some of which concerned the public service, as well as external consultants (namely the notable PwC scandal), and that issues such as these illustrates the changing nature of integrity issues. Mr Brereton also emphasised the importance of ethical leadership within the public sector, including willingness to be accountable.

Finally, Mr Brereton provided an overview of the dominant emerging themes in the matters reported to the NACC, specifically relating to the Australian public service, being procurement, recruitment and promotion. Concerns in these areas primarily relate to the preferencing of family, friends, and associates, and the misuse of official information to obtain advantages. While many complaints relating to recruitment may stem from the grievances of disappointed applicants, it is not the case in all instances. With respect to matters of procurement, Mr Brereton stated that “it is important to appreciate that mere compliance with the rules does not mean that conduct is ethical.”

OAIC investigation into HWL data breach

The Australian Information Commissioner (OAIC) announced on 21 February 2024 that it had commenced an investigation into HWL Ebsworth Lawyers (HWLE) following a data breach that occurred on 8 May 2023.

The investigation is into the firm’s practices in relation to data security and client information, as well as the process used to notify individuals affected by the data breach. Relevantly, organisations are required to take such steps as are reasonable to notify affected individuals of an eligible data breach, and do so as soon as practicable under the Notifiable Data Breaches Scheme in the Privacy Act 1988 (the Privacy Act).

The OAIC has a range of enforcement options available to it following an investigation, and where it is satisfied that interference with privacy occurred. These include seeking declarations and civil penalties in the Federal Court of Australia.

Crimes Legislation Amendment (Combatting Foreign Bribery) Bill 2023

On 29 February 2024, the Crimes Legislation Amendment (Combatting Foreign Bribery) Bill 2023 passed both houses, with the House of Representatives agreeing to certain amendments made by the Senate. The Bill repeals section 70.2(1) of the Criminal Code and replaces it with a new offence of bribing a foreign public official and, in the process, addresses challenges faced by authorities in prosecuting the offence. At a high level, these changes will:

  • expand the existing foreign bribery to include that which is conducted to obtain a personal advantage;
  • remove the requirement that the benefit or business advantage be “not legitimately due” and replaces it with the concept of “improperly influencing” a foreign public official;
  • removes the existing requirement that the foreign public official is influenced in the exercise of their official duties; and
  • clarifies that the foreign bribery offence includes either the obtaining of a business or personal advantage (or both), and that the advantage can be obtained for another person.

The amendments also introduce a new offence of ‘failing to prevent bribery of a foreign official’, in which a corporation will be criminally liable where an associate has committed an offence under section 70.2, unless it can be demonstrated that ‘adequate procedures’ were in place to prevent the offence.

Notably, the Bill did not introduce deferred prosecution agreements as had previously been contemplated.

Commonwealth Fraud and Corruption Control Framework

A new Commonwealth Fraud and Corruption Control Framework (the Framework) was announced on 1 February 2024, and will take effect from 1 July 2024. The most significant change to the Framework is that the Fraud Rule (Public Governance, Performance and Accountability (PGPA) Rule 2014, section 10) has been amended to include and apply to corruption. The new Framework will complement the Commonwealth Fraud Prevention Centre and the NACC’s prevention and investigation functions, with the aim of improving public sector integrity standards.

The new Framework will consist of the following parts:

  • Fraud and Corruption Rule (Public Governance, Performance and Accountability (PGPA) Rule 2014, section 10);
  • Fraud and Corruption Policy; and
  • Fraud and Corruption Guidance (currently being reviewed by the Attorney-General’s Department with release expected in March 2024).

These will provide procedural requirements and guidance for fraud and corruption controls, such as investigations and reporting, and assist Commonwealth entities to manage the risk and incidences of fraud and corruption.

The Framework, which was first established in 2014, and was subsequently updated by the Government following the establishment of the NACC, to align with industry standards as part of a suite of reforms, said to improve the standards of integrity across the public sector. Amendments include requirements for entities to have effective governance structures and processes, assigned officials that are responsible for the management of fraud and corruption, and periodic reviews of the effectiveness of controls.

ICAC NSW update

Annotated Code of Conduct

The Independent Commission Against Corruption in New South Wales (ICAC NSW), has released an Annotated Code of Conduct for Members of the NSW Parliament to assist ministers and parliamentary secretaries in complying with the NSW Ministerial Code of Conduct.

The annotations include key messages, and summaries of relevant past Commission reports and case law. Practical guidance is offered describing how the Commission make findings of offences relating to corrupt conduct against a member, with a table summarising historical corrupt conduct findings, and sanctions is also included.

Guide for managing conflicts of interest in the public sector

The ICAC NSW has also published guidance to assist public officials and agencies manage conflicts of duties. This publication focuses on significant decisions that impact the broader public and external stakeholders with a view to obtain and retain their trust “and comply with the principles of probity and integrity.”

Conflicts of duties are defined within the guidance, alongside the use of examples and case studies to establish scope, enforcement and importance. Further guidance is provided on how to address a conflict of duty through eight steps that include the duties’ removal, identification, or enhancement and internal controls that ensure fairness, transparency and accountability.

Australian Federal Police updates

The Australian Federal Police (AFP) continue to be active in the integrity space. Two recent examples of activity undertaken by the AFP include the uncovering of a money laundering operation and the first sentence for foreign interference.

Money laundering charges

On 4 March 2024, two Russian nationals appeared in Southport Magistrates Court after the AFP seized $1.95 million in cash and $425,000 in cryptocurrency during a money laundering operation on the Gold Coast. The parties reportedly laundered the illicit cash by visiting various automatic teller machines across Australia and conducting cash deposits, with each deposit kept under $10,000 to avoid detection.

The parties are facing three counts of dealing in the proceeds of crime – money or property worth $1 million or more, contrary to section 400.3 of the Criminal Code 1995 (Cth) (the Criminal Code).

The operation was uncovered by the Gold Coast Joint Organised Crime Taskforce, which is a multi-agency taskforce that comprises of members of the AFP, Queensland Police Service, Australian Criminal Intelligence Commission, Department of Home Affairs, Australian Border Force, Australian Transaction Reports and Analysis Centre, and the Australian Taxation Office.

Foreign Interference sentencing

On 29 February 2024, a Melbourne man was sentenced to two years and nine months imprisonment for attempting to influence a Federal Parliamentarian on behalf of a foreign government, including a foreign intelligence agency.

The AFP undertook a lengthy investigation that identified that the man was attempting to influence a Federal Government Minister, reportedly as part of a longer-term plan to pursue objectives of a foreign government, with investigators identifying that the man had made a significant donation to a Melbourne hospital in an attempt to gain attention. The man was charged with a foreign interference offence on 5 November 2020, which constituted the first instance of the charges since the Government passed the National Security Legislation Amendment (Espionage and Foreign Interference) Bill 2018.

The man was found guilty of preparing for a foreign interference offence, contrary to section 92.4 of the Criminal Code, by a jury on 19 December 2023, before his sentencing on 29 February 2024.

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Authored by:
Cinzia Donald, Partner (Lavan)
Kelly Griffiths, Partner
Daniel Maroske, Partner
Kathy Merrick, Partner,
Jack Tipple, Special Counsel
Anna Fanelli, Senior Associate
Emma Bolton, Solicitor (Lavan)
Safira Dashwood, Paralegal

This update does not constitute legal advice and should not be relied upon as such. It is intended only to provide a summary and general overview on matters of interest and it is not intended to be comprehensive. You should seek legal or other professional advice before acting or relying on any of the content.

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