The National Anti-Corruption Commission: what you need to know

23 January 2023

Stephen Newman
Special Counsel
Sparke Helmore Lawyers

Stephen Newman
Special Counsel
Sparke Helmore Lawyers
t: +61 3 9291 2217

Stephen’s background is as a corporate and commercial lawyer who also represented private clients in complex commercial litigation and dispute resolution matters before major courts and tribunals. Stephen’s experience covers many different industries and clients ranging from listed public companies to family businesses. Since joining Sparkes, Stephen has been using his skills and experience to advise the firm’s Government clients.

Robert Watson
Partner
Sparke Helmore Lawyers

Robert Watson
Partner
Sparke Helmore Lawyers
t: +61 3 9291 2388

Robert is a government procurement specialist experienced in advising on complex acquisitions, technology and communication assets, and logistics. He also has experience in advising private sector clients on tendering strategies.

In December 2005, Australia ratified the UN Convention against Corruption. Over the ensuing decades, there was considerable discussion about the need for a national anti-corruption commission (NACC) and the form it should take but it did not eventuate.

In the meantime, Australia’s standing as a relatively corruption free country, as measured by Transparency International’s Corruption Perceptions Index (CPI) was falling. In January 2022, Australia recorded its worst ever score on the CPI.[1]

In the lead up to and during the May 2022 federal election campaign, both major political parties proposed to establish a NACC if elected. The Labor party, having been elected to Government, and after extensive consultation about its proposed NACC model, delivered on its election promise when on 30 November 2022 the Parliament passed the National Anti-Corruption Commission Act 2022 and the National Anti-Corruption Commission (Consequential and Transitional Provisions) Act 2022.[2] (NACC legislation)

The NACC legislation received Royal Assent on 12 December 2022. Several Parts of the NACC legislation are already operative while the remainder will 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 Government has indicated, however, that it wants the NACC established by mid-2023.

The PGPA, the PID and the APS Code of Conduct

Public officials will be aware that the Public Governance, Performance and Accountability Act 2013, the Public Interest Disclosure Act 2013 and the Australian Public Service Code of Conduct apply to a range of Commonwealth entities and persons and impose various duties and obligations upon them.

Other than the requirement imposed on certain public officials to make mandatory referrals of corrupt conduct to the NACC (outlined below), the NACC legislation does not impinge upon the operation of the above Acts and Code; they continue to apply according to their terms.

What follows is an examination of the key features of the NACC legislation that public officials need to be aware of[3].

Structure of the NACC

The NACC will consist of a Commissioner and up to three Deputy Commissioners. There will be a CEO who will be responsible for managing the affairs of the NACC and ensuring it performs its functions. The NACC will also have its own staff and the CEO may retain consultants, engage persons employed by state and territory governments and agencies and a government body or authority of a foreign country and employ a lawyer as Counsel assisting either generally or in relation to a particular corruption investigation.

The NACC will be overseen by a Parliamentary Joint Committee[4] and an Inspector, who will be an independent officer of the Parliament, with a remit to detect and investigate corrupt conduct in the NACC.

Jurisdiction of the NACC

Under the National Anti-Corruption Commission Act 2022 (NACC Act), the NACC can investigate ‘serious’ or ‘systemic’ corrupt conduct by ‘public officials’.

Those persons and entities covered by the NACC Act include Commonwealth ministers, public servants, statutory office holders, Commonwealth entities and companies, parliamentarians and their staff and government contractors.

Regarding Ministers and parliamentary staff, they have previously been subject to codes of conduct. The current Government’s Ministerial Code of Conduct, for example, provides that “Ministers are… expected to ensure that reasonable measures are put in place in the areas of their responsibility to discourage or prevent corrupt conduct by officials.” With respect to corrupt conduct, these codes of conduct will now be reinforced by the NACC Act and subject Ministers, parliamentarians, and their staff to a formal anti-corruption regime for the first time.

What then is ‘corrupt conduct’? Section 8 (1) of the National Anti-Corruption Commission Act 2022 defines corrupt conduct as follows:

“(a) any conduct of any person (whether or not a public official) that adversely affects, or that could adversely affect, either directly or indirectly:

(i) the honest or impartial exercise of any public official’s powers as a public official; or

(ii) the honest or impartial performance of any public official’s functions or duties as a public official;

(b) any conduct of a public official that constitutes or involves a breach of public trust;

(c) any conduct of a public official that constitutes, involves or is engaged in for the purpose of abuse of the person’s office as a public official;

(d) any conduct of a public official, or former public official, that constitutes or involves the misuse of information or documents acquired in the person’s capacity as a public official.“ [5]

A public official may engage in corrupt conduct even if they did not benefit personally from it. They may also engage in corrupt conduct alone or in conjunction with others (regardless of whether those others are public officials).

To avoid the legislation capturing certain legitimate conduct by a public official, it excludes from the definition of corrupt conduct:

the claiming of allowances or entitlements, or the use of public resources in accordance with the Parliamentary Business Resources Act 2017 or the Members of Parliament (Staff) Act 1984, and
engaging in political activity provided the conduct does not involve or affect the exercise of a power, or the performance of a function or duty, by a public official, or the use of public resources.

The legislation does not define the terms ‘serious’ or ‘systemic’ but will have the ordinary meaning as applied by the Commissioner.

Retrospectivity

The legislation is retrospective in that the Commission can investigate serious or systemic corrupt conduct that occurred before or after its establishment.

Investigations and Ancillary Powers

The Commission can investigate allegations of corrupt conduct on its own motion and receive complaints or referrals from any source, including the public. To bolster the Commissioner’s investigative powers, the Commissioner has the power to issue notices to produce information, documents, and things, to summon persons to a hearing and to undertake specified searches of premises and vehicles, with and without a search warrant depending on the search being undertaken.

Heads of Commonwealth agencies must refer corruption issues to the NACC where the agency head suspects the corrupt conduct could be serious or systemic.

The heads of intelligence agencies can make a mandatory referral either directly to the NACC or to the Inspector-General of Intelligence and Security (IGIS). If the agency head makes a referral to the IGIS, the IGIS will be required to refer it to the NACC if the IGIS is satisfied that it is likely to involve serious or systemic corruption.

Staff members of agencies performing or exercising functions or powers under the PID Act have similar mandatory referral obligations to that imposed on the heads of agencies and intelligence agencies.

The Commissioner may refer a corruption issue to a Commonwealth agency for investigation, may oversee the investigation and give directions about the planning and conduct of the investigation.

Several Acts of Parliament contain a ‘secrecy provision’ that prevents the use, disclosure or copying of certain information, documents, or things. A ‘secrecy provision’, however, does not override the obligation to make a mandatory referral unless it is an “exempt secrecy provision’.[6]

Hearings

All hearings are to be held in private unless the Commissioner is satisfied that ‘exceptional circumstances’ exist, and it is in the public interest to hold a public hearing.

There are several criteria the Commissioner must consider when deciding to hold a hearing in public including any unfair prejudice to a person’s reputation, privacy, safety, or wellbeing and whether that person has a particular vulnerability.

A person giving evidence at a hearing can be represented by a lawyer. However, the privilege against self-incrimination and the right to claim legal professional privilege are abrogated with respect to giving an answer or information or producing a document or thing although those matters may not be used in a subsequent criminal proceeding, a proceeding for the imposition or recovery of a penalty, or a confiscation proceeding.

Whistleblowers

Whistleblowers who make a disclosure to the NACC are protected from being subject to any civil, criminal, or administrative liability (including disciplinary action) and no contractual or other remedy may be enforced or exercised against the person because of the disclosure. It is an offence to take or threaten to take a reprisal against a whistleblower.

Public officials may also make disclosures directly to the Commissioner and in doing so have the protections afforded to them for doing so by the PID Act.

Where a whistleblower chooses to speak with a journalist rather than use any other disclosure channel, the journalist, their employer, a person assisting the journalist who is employed or engaged by the journalist’s employer or a person assisting the journalist in the person’s professional capacity are not required to do anything under the NACC Act that would disclose the identity of the whistleblower or enable that identity to be ascertained.

The protections afforded to a journalist’s source is limited, however, to responses to notices to produce and questions asked in a hearing and does not apply to information provided by a source. The protections also do not prevent an authorised officer from exercising search warrant powers under the Crimes Act 1914 (Cth) although the warrant issuing officer must have regard to the public interest and protecting the confidentiality of a source’s identity where the warrant is to search a journalist’s or their employer’s premises.

Conclusion

The NACC legislation creates a body with considerable powers to investigate and deal with corrupt conduct through a variety of mechanisms including private and public hearings, its prevention and education function including public inquiries into corruption risks, vulnerabilities, and measures to prevent corruption in Commonwealth agencies, the publication of reports into completed investigations (within specified guidelines) and the referral of evidence of an alleged offence to the Commonwealth Director of Public Prosecutions for further consideration.

Public officials have always been subject to considerable scrutiny. The creation of the NACC arguably raises that scrutiny to a new level.