SERIOUS AND ORGANISED CRIME (UNEXPLAINED WEALTH) BILL

Second Reading

Adjourned debate on second reading (resumed on motion).

(Continued from page 3613.)

The Hon. D.G.E. HOOD (16:55): I rise briefly to indicate Family First's support for this bill dealing with unexplained wealth. I think that too many of us are sick of apparently unemployed people, or people who do not appear to have a normal source of income, living in a mansion, with a boat on the front lawn and the latest BMW in the driveway. The police know they are drug dealers, their neighbours know what they do and so does the community, but catching them in the act or proving that the assets come from the proceeds of crime is difficult and, in many cases, simply cannot be done.

The minister has indicated that one of the most effective ways in which to counter serious criminal offending is to confiscate the proceeds of crime. Family First agrees. I have some confidence that elements of the criminal underworld will decide that South Australia is just too difficult a place to conduct their business and may actually leave and decide to live in another state or jurisdiction as a result of this bill being passed, and certainly that would be a very positive outcome and one which I would welcome.

Opponents of the bill will state that the Criminal Assets Confiscation Act 2005 already allows for the proceeds or instruments of crime to be forfeited to the state. However, the provisions in that act come into effect only where it can be shown that the person has been convicted of a serious offence or that the person is suspected on reasonable grounds of having committed a serious offence, and the relevant property is either proceeds or an instrument of that crime. The need to prove all of these elements on the balance of probabilities, even when it is apparent that there can be no lawful reasons why a person was in possession of the assets in question, limits the effectiveness of that provision.

Under the proposed legislation, the provisions will authorise the Crown to apply to a court for a declaration that a person or, indeed, a corporation has unexplained wealth, meaning that the value of their calculated wealth exceeds their lawfully obtained wealth. Any wealth the defendant cannot explain will be assessed as a civil debt due from the defendant to the Crown.

I note with interest a similar commonwealth bill, the Crimes Legislation Amendment (Serious and Organised Crime) Bill, which does something similar. The federal Attorney-General discussed the commonwealth moves in a Sydney Morning Herald article of 25 June, giving some interesting statistics. The article states:

Organised crime costs Australia at least $15 billion a year and inflicts substantial harm on the community, business and government. But in many cases, people who arrange crimes and profited from them were able to avoid prosecution. Mr McClelland said that unlike existing confiscation orders, new 'unexplained wealth orders' would not require proof of a link to a specific crime.

There are legitimate civil liberty concerns with such measures. This is a far-reaching and heavy handed response, but organised crime is also heavy-handed and causes tremendous hardship to South Australian families. I have little doubt that this law in particular will bring about a far more effective result than any other we have debated in the past year or so in terms of dealing with crime itself and also in seeing organised crime networks broken up. Indeed, as I alluded to earlier, it may actually force some of them out of the state, and that certainly would be a very positive outcome as far as Family First is concerned.

We see this as a positive bill. I think some legitimate concerns have been raised by other members, but I will not go over that ground again. Unfortunately, we operate in a world where such strong measures are a requirement in order to deal with organised crime in particular in a head-on way. This bill is supported by Family First. We are aware that there are a number of amendments, which we will consider in due course, but this bill certainly has our support.

The Hon. R.P. WORTLEY (16:59): I rise today to address the Serious and Organised Crime (Unexplained Wealth) Bill. I recall that, when speaking last year about the Firearms (Firearms Prohibition Orders) Amendment Bill and the Serious and Organised Crime (Control) Bill, I reflected on the government's strategic program of ongoing reform in particular areas of our justice system and the criminal law.

The bill we are presently considering represents yet another element in the government's armoury of targeted responses to issues touching on criminal activity, having particular reference to organised crime and the activities of outlaw motorcycle gangs. Speaking in March 2008 about the Serious and Organised Crime (Control) Bill, I alluded to the fact that organised crime has many faces but only one crucial motivation—financial gain. I noted that its arms are extraordinarily long and reach into many places—some obvious and some more surprising. I referred to its sophisticated planning, methods and techniques and its ever-expanding ambit, this being dependent on two factors: the current focus of law enforcement authorities and the market fluctuations—that is, supply and demand.

I outlined the ways in which groups of people involved in organised crime enterprises note and adapt to changes in our laws. The result is the diversification of activity to exploit new criminal opportunities. The government is determined to deal with these criminals and to hit them where it hurts most—in the wallet. As my colleague the Minister for Mineral Resources Development recently said concisely during his second reading explanation:

An important means of attack on the profits of organised crime, including the activities of outlaw-motor-cycle gangs, lies in the introduction of unexplained wealth orders. In general terms these provisions will authorise the Crown to apply to a court for a declaration that a person (including an incorporated body) has 'unexplained wealth'. A person has 'unexplained wealth' if the value of their proven wealth, calculated in accordance with the legislation, exceeds their lawfully obtained wealth. Any wealth the defendant cannot explain will be assessed and form the basis of a civil judgment debt due from the defendant to the government.

For the purposes of this legislation, wealth is defined as everything a person has ever owned or effectively controlled, and this applies both before and after the act comes into force. The legislation represents a valuable adjunct to the existing Criminal Assets Confiscation Act 2005 which, although effective, is limited by the requirement to prove the commission of a serious offence on the part of the defendant or other person. The Attorney-General has confirmed that the bill before us today targets people who have managed to evade authorities. He commented recently:

The police and the public look at [these people] and think, 'How on earth did a bloke who appears to do no work or no legitimate work acquire hundreds of thousands of dollars worth of cars or millions of dollars worth of real estate? The answer is almost certainly drug dealing and extortion.'

In plain language, that is why this legislation is needed. The law will stop members of the underworld from living the high life they have often so conspicuously enjoyed through their ill-gotten gains. It will also target those senior criminal identities who use others to do their dirty work but manage to evade direct links with the commission of crimes.

There has been some discussion about the fact that the bill contains no requirement to show that the property or funds in question are crime-derived or crime-related. I would like to stress that ordinary law-abiding citizens have nothing whatsoever to fear. As well, safeguards are built into the bill to ensure that the lawful interests of a person in property or funds are protected. I will return to that matter in a moment when I turn to the provisions of the bill but, in the meantime, I point to no less an authority than the Interpol General Assembly which, as long ago as 1997, recognised the following:

...unexplained wealth is a legitimate subject of inquiry for law enforcement institutions in their efforts to detect criminal activity and that, subject to the fundamental principles of each country's domestic law, legislators should reverse the burden of proof (that is, use of the concept of reverse onus) in respect of unexplained wealth.

Many jurisdictions have seen the merit in this approach and have legislated accordingly. Now it is time for our parliament to do likewise. The bill before us authorises the Crown Solicitor to seek from a court a declaration that a 'person' (as defined earlier) has unexplained wealth. The initiating act will be an application on the part of the police commissioner for a restraining order which, essentially, will set out the property covered.

The order will have a duration of 21 days unless an application for an unexplained wealth order is made, in which case the order will (under normal circumstances) continue until the end of proceedings. The safeguards here include the fact that the court may decline to issue a restraining order if the Crown does not appropriately undertake to pay damages or costs should the property in question be found to be legitimately obtained.

As well, the Crown must advise any persons owning or having an interest in the property subject to the application, so that those persons may apply to have their lawful interests excluded. Senior police have extensive investigative powers under the proposed legislation. They may, through appropriate and specific avenues, require reporting or financial information from a deposit holder, require the giving of evidence and execute warrants authorising search and seizure. Again, safeguards apply. These powers may be exercised only against:

persons convicted for, or found liable, to supervision for a serious offence;

persons subject to a control order under the Serious and Organised Crime (Control) Act 2008; or

persons whom the Crown Solicitor has reasonable grounds to suspect have engaged in serious criminal activity, associated with persons who so engage, are members of the declared criminal organisation, or who are the beneficiaries of the estate of such a person.

The decision of the Crown Solicitor on these matters will be final and not subject to review. The elements of procedural fairness will not be applied. The Crown Solicitor will exercise his discretion on an entirely independent basis.

The criminal threshold of proof will not apply when an application for a full unexplained wealth order is made. There will be no onus on the Crown to prove or even to allege that a person is engaged in any sort of criminal activity. Once the application is made, the person's private wealth in toto is essentially deemed to have been unlawfully acquired.

The onus of proving that the property has been unlawfully acquired now reverts to the respondent. The Crown need only prove that he, she or it owns or effectively controls wealth. Should a declaration be made, the court will order the payment of an amount of money as a judgment debt, enforceable under the Enforcement of Judgments Act 1991. Commonwealth legislation applies in the case of the enforcement of interstate judgments. Therein lies the effectiveness of the provisions.

My last point is that proceeds will be directed to the Victims Of Crime Fund. This is undoubtedly a suitable and appropriate avenue for the property of those who instigate, direct, carry out and profit from criminal activity. As I have said on other occasions in this place, the government is determined to deal with those who willingly participate in criminal enterprises. The government considers that these provisions are proportionate to such enterprises and are appropriate in ambit. I support the bill and commend it to honourable members.

The Hon. P. HOLLOWAY (Minister for Mineral Resources Development, Minister for Urban Development and Planning, Minister for Small Business) (17:07): I thank honourable members for their contribution to the debate. The Hon. Mr Winderlich has indicated that he is opposed to the bill. I think it is fair to say that he does so on the basis that, in a number of ways, it undermines concepts of civil rights and civil liberties. The government respects that position but does not agree with it. The reasons why that is so appear in the second reading explanation and need no further recitation here. The government agrees that the bill is tough, as it is meant to be. The government thinks there is a good reason for that.

I also thank the Hon. Mr Lawson for his thoughtful contribution to the debate. I want to convey to the council the confidence of the government that the bill will survive constitutional challenge. As the honourable member points out, the High Court upheld the validity of these very criminal intelligence provisions in the K-Generation case. In section 14.1, considered in the Totani case—that was the Serious and Organised Crime Bill—involving a member of a bikie gang who challenged that particular control order, the making of an unexplained wealth order is discretionary. So, we need to note that section 14.1 in the Totani case differs from the situation here. The making of an unexplained wealth order is discretionary. The court is informed that it should make the order but it retains a discretion not to do so. This is the very significant distinguishing point.

I also thank the honourable member for the content of his speech, which was very informative, making the case for unexplained wealth laws, particularly getting at individuals within organisations who direct crime and profit by it. In the same vein, I also thank the Hon. Mr Hood and the Hon. Mr Wortley for their contributions. Most members of this parliament—perhaps with the exception of the Hon. Mr Winderlich—accept that those people who are involved heavily in crime of one sort or another and have visible wealth but do not work or appear to make any contribution towards it should not be able to get away with it forever, as perhaps they have done in the past. I thank all members who have made that point.

In relation to the Hon. Mr Lawson's comments, while thanking him I return the compliment by informing the honourable member (who clearly has an interest in the matter) that the commonwealth government recently introduced a bill for its own unexplained wealth laws. Again, members in this council would welcome that development.

It is true that some of the investigative powers, such as restraining orders, can be taken in any court. The reason for this is that it is not necessary, only possible, that the application proceedings will be taken with the investigating proceedings; they may or may not. Normally, as in the confiscation act, the restraining orders and the like would be taken in the Magistrates Court, but there is no sense in splitting proceedings if an application is underway already in the District Court. So far as the Crown Solicitor is concerned, the government has explained why it has taken that position, and the honourable member has quoted and understood it, even if he does not agree with it.

In another matter it is true that section 14(1) control orders have been declared invalid but, first, section 14(2) control orders are available and valid. Secondly, the government is confident that its appeal will be successful.

Finally, the Hon. Mr Lawson did point out a mistake in a reference in the bill to the Solicitor-General. Of course, it should be the Crown Solicitor. Indeed, I have already circulated an amendment to correct that error within the bill; so I thank the honourable member for pointing that out. I thank other members for their indications of support and I look forward to the committee stage of this bill when the parliament next meets.

Bill read a second time.