The Government unveils its proposed Commonwealth Integrity Commission

What you need to know

On 2 November 2020, the Attorney-General Christian Porter released the exposure draft for legislation to establish a Commonwealth Integrity Commission (CIC).  The CIC will be a centralised, specialist agency whose role is to investigate corruption in the public sector, and which will absorb the existing Australian Commission for Law Enforcement Integrity (ACLEI).  Its powers will extend well beyond the ACLEI's current jurisdiction, and capture the conduct of a significantly broader range of entities, employees and contractors. 

The timeframe for the actual commencement of the CIC will depend on passage of the proposed legislation.  The Government intends to introduce the legislation to the Parliament once it has considered feedback received during the consultation period, but has not set a deadline for doing so.  ACLEI's jurisdiction will be expanded in the meantime, from 1 January 2021.

The proposed legislation comprises two Bills:

• The Commonwealth Integrity Commission Bill 2020 (Cth), which would establish the CIC; and
• The Integrity and Anti-Corruption Legislation Amendment (CIC Establishment and Other Measures) Bill 2020 (Cth) which would deal with consequential and transitional matters arising from the establishment of the CIC.

What you need to do

• If you wish to participate in consultation, feedback by written submissions is due by 12 February 2021.  Consultation sessions and roundtable meetings are also being held with stakeholder representatives across all states and territories between November 2020 and March 2021.  
• For those who may be subject to a future CIC, it is a timely reminder to stress-test your current integrity framework and take steps to address any systemic or cultural risks identified.  Serious or systemic corruption will be given priority by the CIC.
• Consider the impact on contracted service providers potentially captured by the proposed CIC, and whether steps to mitigate any associated risks would be appropriate.

Who can be investigated by the CIC?

Under the proposed legislation, the Integrity Commissioner is empowered to deal with corruption issues that relate to "regulated entities".  Regulated entities are divided between the two arms of the CIC: the Law Enforcement Integrity division and the Public Sector Integrity division.  

The Law Enforcement Integrity division covers broadly the same entities as the current ACLEI jurisdiction (such as ACIC, AFP, AUSTRAC, Department of Home Affairs and prescribed parts of Department of Agriculture, Water and the Environment), with some notable expansions and additions, including ACCC, APRA, ASIC and the ATO, as well as the entirety of the Department of Agriculture, Water and the Environment.

The Public Sector division covers the remainder of Commonwealth entities, Commonwealth companies, subsidiaries of Commonwealth companies or corporate Commonwealth entities, as well as:

• Parliamentarians and their staff (extending to all staff employed and consultants engaged under the Member of Parliament (Staff) Act 1984 (Cth), and any secondee to the office);
• higher education providers (as defined under the Tertiary Education Quality and Standards Agency Act 2011 (Cth)); and
• certain research bodies who receive Commonwealth funding.

The CIC's jurisdiction extends beyond the conduct of individual employees, and includes contracted service providers and their staff (providing services under a "Commonwealth contract") and secondees.

The Governor-General, federal judges and members of a Royal Commission are excluded. 

What kind of conduct?

The proposed legislation empowers the Integrity Commissioner to deal with "corruption issues", which are issues of whether a person engaged or is engaging in corrupt conduct while a staff member of a regulated entity, or while a parliamentarian (even if the person no longer holds that position).  This includes conduct engaged in outside Australia.

• For the law enforcement integrity division, corrupt conduct includes conduct that involves an abuse of office, perversion of the course of justice, or corruption of any other kind.
• For the public sector integrity division (other than higher education providers or research bodies), corrupt conduct includes conduct that involves an abuse of office or perversion of the course of justice, and constitutes one of the "listed offences" against a law of the Commonwealth. 
• For higher education providers or research bodies, there is no requirement that the corrupt conduct involve an abuse of office or perversion of the course of justice, provided the conduct constitutes a "listed offence". 
• For staff members of law enforcement agencies, the concept of "corruption issue" extends to the question of whether that staff member may engage in corrupt conduct in the future (reflecting ACLEI's current jurisdiction).

"Listed offence" includes, among other things, offences against Chapter 7 of the Criminal Code (Cth) (which concerns the proper administration of Government), as well as offences created by the exposure draft such as obstruction of the conduct of a CIC hearing, victimisation of individuals assisting the CIC, or concealment of corrupt conduct. The proposed legislation will also create new offences under Chapter 7 of the Criminal Code, such as making false or misleading allegations to Commonwealth investigative bodies.  

The CIC may investigate conduct engaged in before the commencement of the Act.  However, the new offences do not apply retrospectively, so such investigations would be limited to offences that existed at the time.

How are matters referred to the CIC?

In most circumstances, where the head of a regulated entity becomes aware of an allegation or information that raises a corruption issue relating to the entity, the head of that entity must notify the Integrity Commissioner of that issue.  There are special notification procedures for intelligence agencies.

There are also a number of discretionary referral mechanisms:

• In the Law Enforcement Integrity division, Ministers, other parliamentarians, and "Commonwealth integrity office holders" (such as the Commonwealth Ombudsman and the Australian Public Service Commissioner) and the public at large may refer particular corruption issues to the Integrity Commission.
• In the Public Sector Integrity division, the public does not have a right to refer corruption issues to the Integrity Commission.  Ministers, other parliamentarians and Commonwealth integrity office holders must hold a reasonable suspicion that one or more of the designated criminal offences has been committed before referring.

The Integrity Commissioner may also investigate a corruption issue on his or her own initiative.  

Investigative powers of the CIC and outcomes of an investigation

According to the Attorney-General, the CIC will have greater investigatory powers than a Royal Commission.  This includes powers to:

• require the production and surrender of information, documents or other evidence;
• hold hearings for the purpose of investigating corruption issues or conducting a corruption inquiry (only in private in the case of the Public Sector Integrity division);
• compel witnesses to give evidence at hearings, even if that evidence would incriminate a person;
• obtain warrants to intercept communications or use other surveillance devices, and search people, their homes, or seize property; and
• seek court orders to confiscate a witnesses' passport where there is a risk that the witness may leave Australia, or apply for a warrant to arrest a witness where that witness is trying to leave Australia for the purpose of avoiding giving evidence. 

Following the conclusion of an investigation, the CIC is required to issue a report on the investigation, including recommendations.  The CIC cannot make findings of criminal conduct, and must instead refer evidence to the Commonwealth Director of Public Prosecutions or other relevant prosecution agency for consideration.  Where the CIC obtains evidence of a breach of duty or misconduct justifying termination or other disciplinary proceedings (such as a breach of the APS Code of Conduct for example), that CIC must notify the relevant Agency head.

Other matters

The draft legislation does not address a number of matters which may be the subject of consultation, including:

• the interaction with existing Commonwealth disciplinary frameworks and whistleblower protections (such as the Public Interest Disclosure Act 2013 (Cth)), particularly in light of the various mandatory referral mechanisms in the new regime.  The proposed legislation creates an offence for victimising a person on the ground that the person has notified the CIC or other relevant officials of a corruption issue; and
• appropriate mechanisms (if any) to protect the reputations of those subject to an investigation by the CIC (noting this issue has been raised in commentary on the exposure draft).  The proposed legislation does provide regulated entities with the opportunity to be heard in relation to findings which are critical to the entity prior to the publication of a report of the CIC. 

Authors: Elissa Speight, Partner; Melanie McKean, Partner; Ben Ye, Lawyer; and Ross Mackey, Lawyer.