Legal development

The NACC at last Australias National Anti-Corruption Commission Becomes Law

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    What you need to know

    • The National Anti-Corruption Commission Act was passed by the House of Representatives and is poised to shortly become law.
    • The NACC legislation is largely similar to the draft first put to the House. A small number of amendments were made which adopted proposals by the Joint Select Committee examining the Bill.
    • These amendments include added protections for those who are part of an investigation, including the ability to disclose that fact to health professionals or legal advisers.
    • Other amendments that had been sought by independent MPs were rejected. For example, there has been no change to the 'exceptional circumstances' threshold for holding public hearings, despite calls to either remove that threshold, or better define its meaning.

    What you need to do

    • Ensure that when dealing with Commonwealth officials you avoid conduct that could be construed as adversely affecting the honest and impartial exercise of a public official's power or performance of their duties.
    • Be aware of the NACC's extensive investigative powers and the risks of adverse publicity in the event hearings are made public.
    • For Commonwealth officials, be mindful that your conduct could be investigated (including conduct that precedes the establishment of the NACC), and that there are mandatory reporting requirements under the NACC legislation that may interact with the existing Public Interest Disclosure Act requirements.

    On 30 November 2022, the Australian Parliament enacted legislation establishing a federal anti-corruption authority and fulfilling a key election promise of the Labor government. 

    The Bill as passed can be accessed at this link.

    In our previous publication, we outlined the likely features of the National Anti-Corruption Commission (NACC) and its implications for Australian companies and government entities. Since the publication of that article, the Joint Select Committee on National Anti-Corruption Commission Legislation handed down its report, recommending a number of amendments to the legislation. 

    In this article, we set out key amendments that were passed, and rejected, in the NACC Bill's passage through Parliament. The amendments, broadly provide greater protections for those being investigated, and have not significantly changed the character of the draft NACC Bill. 

    The Public Hearing Test

    Perhaps most notably, the NACC legislation has retained the requirement that any hearings are to be held in private by default, and only are only to be held publicly where the Commissioner is satisfied there are 'exceptional circumstances' justifying that course. 

    While the Joint Select Committee examining the Bill had not recommended change to the requirement that hearings be held in private by default, that requirement remained the focus of criticism from a range of quarters, including complaints that it would undermine the transparency of the commission, and result in information about corruption being kept from the public. Crossbench MPs moved amendments to the NACC Bill, seeking to either remove the 'exceptional circumstances' requirement or, alternatively, to define exceptional circumstances as "circumstances where it is preferable or appropriate for evidence to be heard in public." 

    However, the government ultimately rejected these amendments and retained the 'exceptional circumstances' requirement, arguing that it reflected an appropriate balance given the potential reputational consequences for persons compelled to answer questions in a public hearing.

    Amendments to protect those called in front of the NACC

    In response to concerns raised by the Joint Select Committee, the government amended the NACC Bill to allow those who are involved in a corruption investigation to disclose information otherwise subject to a non-disclosure notation to a medial practitioner or psychologist.

    In recommending this amendment, the Joint Select Committee noted that, while preserving confidentiality was an important consideration in any corruption related investigation, there was a significant risk that witnesses would be subject to unnecessary distress where they were prohibited from sharing that information with medical or mental health practitioners. 

    Similarly, the government moved amendments permitting somebody subject to a non-disclosure notation to disclose information to a legal practitioner or legal aid officer for the purposes of seeking advice or representation in relation to the corruption investigation. 

    However, the permitted disclosures operate as defences to the offence of failing to comply with non-disclosure notations, and the prospective defendant bears the onus of establishing that the disclosure was permitted. 

    Expanded scope of the Inspector's powers

    The NACC legislation creates an Inspector of the NACC, whose role is to monitor and report on the NACC's compliance with the legislation, including its use of investigative powers. The Greens sought an amendment (ultimately accepted) concerning additional powers given to the Inspector to audit the operations of the NACC, and to make recommendations to the NACC of such audits.

    These audits concern the NACC's compliance with the laws of the Commonwealth, and to detect agency maladministration and officer misconduct. This amendment was pressed to avoid any potential overreach by the NACC in its investigations.

    Commencement dates

    The NACC legislation is poised to become law upon either a date fixed by proclamation or, if no proclamation is made within 12 months of royal assent, the day after the 12 month period expires. 

    The exception to this is the commencement of a Part of the Act dealing with the Parliamentary Joint Committee on the National Anti-Corruption Commission, which commences on the day the Act receives royal assent. 

    The Prime Minister and Attorney-General have said that the NACC will be established midway through next year.

    Authors: Rani John, Partner; Thomas Gaffney, Senior Associate; Michael Deighton-Smith, Lawyer; Luke Thiagarajah, Lawyer; Max Slattery, Lawyer.

    The information provided is not intended to be a comprehensive review of all developments in the law and practice, or to cover all aspects of those referred to.
    Readers should take legal advice before applying it to specific issues or transactions.

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