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Legislative Council - Fifty-Third Parliament, Second Session (53-2)
2016-09-20 Daily Xml
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Independent Commissioner Against Corruption (Miscellaneous) Amendment Bill

Second Reading

Adjourned debate on second reading.

(Continued from 7 July 2016.)

The Hon. A.L. McLACHLAN (16:47): I rise to speak to the Independent Commissioner Against Corruption (Miscellaneous) Amendment Bill 2016. The opposition will be supporting the second reading of the bill. At this stage of the progression of the bill, the opposition does not envisage that it will be seeking any amendments to the same. I speak on behalf of my Liberal colleagues.

The bill has been introduced by the government to address operational issues that have arisen during the first few years since the Independent Commissioner Against Corruption was established in South Australia. The government has stated that the aim is to further refine and improve the operation of the Independent Commissioner Against Corruption Act to ensure that it operates as effectively as possible. The opposition accepts the government's assertions that because ICAC has only been operating for approximately three years it is expected that certain operational issues will arise that require rectification.

I now turn to the clauses of the bill. The proposed amendments follow from recommendations made by the Independent Commissioner Against Corruption, Bruce Lander. The commissioner has provided two annual reports to the parliament in which he has set out a number of recommendations. Further to this, on 30 June 2015, the commissioner published a review of the legislative schemes governing the making of complaints and reports about public administration. In his review, the commissioner made a number of recommendations aimed at streamlining the multiple agencies that currently operate in South Australia, which have overlapping responsibility for integrity matters.

This bill also follows from the commissioner's report, dated 14 October 2015, into the sale of the state-owned land at Gillman. In his review of legislative schemes, the commissioner outlined the practical problems faced by ICAC when investigating potential issues of misconduct or maladministration in public administration. He explained that, although the ICAC Act assumes that matters concerning issues of misconduct or maladministration in public administration will be referred to an inquiry agency or public authority for investigation, the act also permits the commissioner to investigate these matters.

However, if the commissioner chooses to investigate these matters, he cannot use the investigative powers given to him under the ICAC Act. Those powers are preserved for corruption investigations. Instead, he must exercise the powers of an inquiry agency—for example, the Ombudsman—after first seeking the views of that agency. He is then able to conduct an investigation bound by the powers of the relevant agency. To make this initial process simpler and more efficient, he has made the following recommendation:

The ICAC Act should be amended to provide that the ICAC may investigate potential misconduct and/or maladministration and may do so utilising the powers under the Royal Commissions Act 1917.

The bill has adopted this recommendation. On this point, I think it is important to reflect on why ICAC, in certain circumstances, might be required to investigate matters of maladministration and misconduct. When the ICAC Act was first introduced to parliament, the government stated in the second reading:

Despite the primary object of the ICAC being to investigate corruption in public administration, having the authority to act on conduct amounting to maladministration and misconduct is necessary. This is because the conduct amounting to maladministration or misconduct may be indicative of an increased risk of corruption or may be evidence of an incipient culture of corruption.

In practical terms, the amendment contained in this bill will provide ICAC with coercive powers and remove the limitations of investigations that are conducted under the Ombudsman Act. It also removes the need to refer to the relevant agency before conducting an investigation.

Other technical amendments to the bill seek to clarify the primary objective of the commissioner, which is to investigate serious or systemic corruption in public administration and to refer serious or systematic misconduct and maladministration to the relevant body. It also seeks to redefine circumstances in which the commissioner should investigate serious or systemic misconduct or maladministration in the public administration and provides a definition for serious and systemic misconduct and maladministration.

While the commissioner's powers have been expanded, the definition and the purpose of the act have been refined. Other amendments sought in the bill enable the Office for Public Integrity (OPI) to assess and refer matters directly to the appropriate authority without having to make a recommendation to ICAC.

The bill seeks to enable matters referred by the ICAC to the Ombudsman to be dealt with exclusively by the Ombudsman. The bill amends the report-making power by specifying the particular issues on which the commissioner may publish a report and provides a complaints procedure for alleged abuse of the exercise of powers of the commissioner or misconduct by officers of the ICAC. The bill goes further and seeks to amend the definition of corruption to encompass the act of lobbying so that such activity can be investigated by the commissioner, and provides clarity around the use of information obtained during investigation.

The bill also seeks to clarify that evidence gathered in good faith is able to be provided to a law enforcement agency, despite any jurisdictional error that may have occurred during the time of the investigation. It also clarifies that breaches by members of parliament of a statement of principles cannot be investigated by ICAC. Other provisions in the bill allow law enforcement officers involved in a joint investigation with ICAC to be named on the search warrant, giving the police the associated search and seizure powers that stem from this.

The Liberal opposition has been critical of the government in that it has failed to adopt the recommendation of the commissioner in relation to public hearings. In the Gillman report the commissioner recommended that he should be granted the power to hold inquiries into maladministration in public if it is in the public interest to do so. The commissioner stated the reason for this request:

When I investigate corruption I do not make findings. Whether or not a prosecution ensues is a matter for the Director of Public Prosecutions. Whether or not a person is convicted of a criminal offence is a matter for a court.

In contrast—unlike a corruption investigation—an investigation into maladministration in public administration will require me to make findings in respect of the conduct of a public officer or the practices, policies or procedures of a public authority.

There will be occasion where—as in this case—there is a significant public interest in the subject matter of the inquiry.

In those circumstances, there is a strong argument in support of permitting public scrutiny of evidence given, submissions made and the procedure undertaken. In a corruption matter such scrutiny would routinely occur when the matter is prosecuted in a court.

The extant position of the government is that it continues to impose public hearings. Indeed, it has been criticised in the media as being the facilitator of a situation which makes South Australia the nation's most secretive state.

When considering this issue I came across an independent review of the New South Wales ICAC by Bruce McClintock SC conducted in 2005. In that review he outlined why he had recommended the New South Wales ICAC should retain its power to hold hearings in public. The report stated:

I do not agree, as some have argued, that public hearings are unnecessary or that the power to hold them should be removed.

Quite the contrary, in my opinion, public investigations are indispensable to the proper functioning of ICAC.

This is not only for the purpose of exposing reasons why findings are made, but also to vindicate the reputations of people, if that is appropriate, who have been damaged by allegations of corruption that have not been substantiated. Moreover, if issues of credibility arise, it is, generally speaking, preferable that those issues are publicly determined.

I leave it to the government to reflect on the same. The opposition is supportive of the amendments contained in this bill. I commend the bill to the chamber.

The Hon. R.I. LUCAS (16:57): I rise to speak to the second reading and share many of the comments my colleague the Hon. Mr McLachlan has put on the public record in relation to the Liberal Party's position. There are really only two specific issues to which I want to address some comment. I do so within the context of the expectation that many of us had, as we argued for many years, initially unsuccessfully but then eventually successfully, to have an ICAC, an independent commission against corruption, in South Australia.

It is important to acknowledge, first, that battle but, secondly, to adopt the position, as certainly I intend to do, that I think the operations of the ICAC in Australia, in South Australia, should be informed by the practice and what occurs in South Australia, but also the practice and what occurs in other state and territory jurisdictions in Australia.

I think the model for our ICAC should evolve, and indeed it is. The amendments we are considering here today are an example of the first stages of that evolution. I support that and encourage that. In my view, we were never going to get it perfect in its first iteration. I do not believe that this iteration is perfect either, and it is capable of further evolution. Certainly, should there be in 2018 a change of government, I would hope that a future parliament would look at further evolution, further iterations, in terms of the operation of the ICAC.

As someone who was involved in the initial debates in our party room (I was not the prime mover but was engaged and involved in the initial debates), I was a very strong supporter for an ICAC in South Australia. As a non-lawyer I entered the debates, not from a legal viewpoint but from a public governance, integrity, transparency and accountability viewpoint, and it seemed every other jurisdiction in the nation had one. There are examples of corruption being rooted out in most of those other jurisdictions. Why should we believe South Australia would be any different? However, I have to say from my perspective that the title of this body, Independent Commissioner Against Corruption, was indeed what its focus should have been, should be and hopefully in the future will be. That is, its focus should be against corruption.

The Hon. P. Malinauskas: Hear, hear!

The Hon. R.I. LUCAS: I am delighted to hear minister Malinauskas strongly endorsing that, and that is that it is not an independent commission against corruption, misconduct and maladministration and other bad things that go on in governance in any jurisdiction. It was specifically entitled the Independent Commissioner Against Corruption. I think many of us who supported it, and perhaps were not as actively engaged in the detail as some of us should have been, know that its focus has been as a result of its drafting. I make no criticism of the commissioner and the staff because the legislation is the legislation. The parliament passed the legislation. If we have a view that is different, as this evolves, then it is for us to change the legislation as we are doing in this particular debate today.

I have highlighted, in contributions over recent years, my concerns that the focus of the ICAC had included areas which in my view were clearly not corruption. Let me give some examples. On two separate occasions, which involved myself having received information from whistleblowers within the Public Service, I was requested to attend and meet with investigators of ICAC. I have put the detail of this on the record previously, so I will not go through all of the detail.

One broadly related to claims I had raised in the Budget and Finance Committee about public money being wasted, in my view, on resolving a conflict between two senior executives in the Department of the Premier and Cabinet. A highly paid consultant or mediator was employed to try to resolve the conflict between the two executives. I was asked by the investigators of ICAC who had leaked or provided that information to me. As I have said previously, with the greatest respect to the ICAC investigators, I said, 'Nick off.' The parliamentary privilege applied, and I had no intention of revealing the confidential source who had raised the matter of public interest with me. The matter, to be fair to the commission, was left at least from my viewpoint at that particular point.

Similarly, I had raised over a long period of time in the parliament and in the Budget and Finance Committee claims from various whistleblowers about rorting of allowances and wastage of public money on the APY lands. Again, I will not go through all the detail, but I was asked by the commission's investigators to reveal the source. Indeed, in one case, a name was given to me, and I was asked to confirm whether or not this particular person was the source of the information that had been provided.

In my view, to use the famous phrase from Yes Minister and Yes, Prime Minister, leak inquiries are not the purview and should not be the purview of an independent commission against corruption. There are many other vehicles. It clearly could be a breach of the code of conduct of a public servant. There are provisions in terms of tribunals and disciplinary procedures which can be used against public servants who breach their code of conduct or breach the Public Sector Management Act.

There have been cases where people have been disciplined, demoted, suspended, sacked. A wide range of provisions apply in terms of the management of your staff if they breach a code of conduct, and I think that it is entirely appropriate in terms of what they have done. It might be embarrassing and it might be damaging, but it is not corruption—it just ain't corruption. It ain't the work of an independent commission against corruption.

The allegation I have made in the past is that I believe some within government departments and agencies were using the ICAC to try to close down leaks of information from whistleblowers to members of parliament and to others. The point of view I have made to some of the journalists is that it is much safer for people to leak information to members of parliament because they have parliamentary privilege to protect themselves, but journalists can end up being the subject of an ICAC inquiry.

In fact, I am aware of at least two cases where public servants leaked information or provided information to journalists, the journalists ran the stories and those journalists were hauled before ICAC in terms of who had released the information to them. I am aware of the concerns the individual journalists had, and they were very concerned for their own welfare, the welfare of their family and, I guess, their integrity that they were being hauled through an ICAC corruption investigation because they had actually been given information, they had run a story and they were now being investigated for that information.

That is one example, but a second and more difficult one is the issue of maladministration. To me, as one of the non-lawyers in the chamber, maladministration is not corruption. Maladministration might be financial incompetence or it might be negligence. It might be worthy of being sacked or demoted from cabinet, or the government might be thrown out. There is a whole variety of consequences as a result of being financially incompetent, negligent and a range of other descriptors which you can use in terms of poor performance by a minister or by a government. If it reaches into corruption then, in my personal view, clearly it should be the purview of an independent commission against corruption.

I acknowledge it is difficult. I have been involved in some of the discussions with the Attorney-General and I welcome his willingness to be involved in the discussions that led to the legislation that is before us. I think we have seen the next iteration of this and I welcome that. I do not speak formally on behalf of my party, but I do indicate that I think it is important for all of us in this chamber to see this as the next iteration and that, whosoever should be lucky enough to be in government after 2018, we should monitor over the next 18 months how this iteration works. As we take policies to the election, I think we should be clear in terms of the potential direction either a Labor Party or a Liberal Party might wish to take the next iteration.

That is a matter I would urge members of the Labor caucus to be engaged in, so that when you go to the election you are clear where you see the evolution of this. Equally, we need to have a debate within the Liberal Party, as an alternative government, as to where we might see the evolution of this going and potentially the next iteration. In doing that, we should be informed by not only what happens here in the next 18 months but what has already happened in interstate jurisdictions and what might happen in interstate jurisdictions in the next 18 months.

As I said, I welcome the change or this next iteration in relation to refining the issues of corruption, maladministration and misconduct. Section 3(2) of the current act provides:

While the Commissioner may perform functions under this Act in relation to any potential issue of corruption, misconduct or maladministration in public administration, it is intended that the primary object of the Commissioner be—

(a) to investigate serious or systemic corruption in public administration; and

(b) to refer serious or systemic misconduct or maladministration in public administration to the relevant body, giving directions or guidance to the body or exercising the powers of the body as the Commissioner considers appropriate.

That has been deleted from the act and that is now being replaced by this next iteration for new section 3(2), which says, and I quote:

Whilst any potential issue of corruption, misconduct or maladministration in public administration may be the subject of a complaint or report under this Act and may be assessed and referred to a relevant body in accordance with this Act, it is intended—

(a) that the primary object of the Commissioner be to investigate corruption in public administration; and

(b) that matters raising potential issues of misconduct or maladministration in public administration will be referred to an inquiry agency or to the public authority concerned (unless the circumstances set out in section 7(1)(cb) or (cc) apply).

That is a small evolution. It is an iteration toward the general direction of which, personally, I am very supportive. It will depend on the interpretation of the commissioner in terms of how significant this particular iteration is because, as you can see from the words, yes, there is a change in the wording and the emphasis. It certainly impresses upon us as a parliament, or the parliament is impressing upon the ICAC, that it is intended that the primary object of the commissioner will be to investigate corruption, and the drafting is now heading in a direction to say that the concentration should be on corruption and potentially matters of serious or systemic corruption in public administration, which is then defined, and that definition is as follows:

…serious or systemic if the misconduct or maladministration—

(a) is of such a significant nature that it would undermine public confidence in the relevant public authority, or in public administration generally; and

(b) has significant implications for the relevant public authority or for public administration generally (rather than just for the individual public officer concerned).

That potentially could be a high threshold but, ultimately, it will be a judgement for the commissioner in terms of his interpretation of what is serious or systemic misconduct or maladministration. I still raise the issues and, again, I do not purport to do so as the current policy position of the Liberal Party because we are supporting the legislation that is before the house, but I raise the issue as to 'serious and systemic misconduct'. Can the commissioner, under these particular provisions, interpret serious or systemic leaking of information from a public servant about a particular issue—not a range of issues but a particular issue—as being serious or systemic misconduct?

I would have thought as a non-lawyer that that is probably difficult for the commissioner to do and that potentially this might stop the ICAC being used as a vehicle for a leak inquiry where there are specific examples of leaks of information from public servants. However, only time will tell and those of us who are members who might be in receipt of leaked information will find out, I guess, over the 18 months whether or not we are asked to appear before an ICAC investigator to respond to the question, 'Well, who provided the information to you?'

I am assuming that if that happens then the commissioner may have determined that this is a serious or systemic example of misconduct, that is, misconduct under the terms of the code of conduct provisions of public servants. Maladministration, of course, is broader and it will be of interest as to how the commissioner determines serious or systemic maladministration.

I conclude my comments on this aspect: I think it is a live issue for both the Labor Party and the Liberal Party over the coming 18 months to determine whether or not this iteration or this evolution should be the first step towards another step. Frankly, I should not be just saying the Labor and Liberal parties because, clearly, the minor parties are actively engaged in this particular issue as well. Each of us, all of us, should apply our minds over the next 18 months as to whether or not we would support another iteration or another evolution in terms of refining the purpose of an ICAC to the purpose that many of us saw it being, and that was corruption. That is the work it should do.

I conclude my remarks in relation to this particular aspect by saying that I think it would be important, prior to 2018, for each of us, major parties and minor parties, to be clear in our policy pronouncements as we lead into the election to say, 'Hey, we are open. It might not be that we are specific, but we are open to the next evolution, the next iteration, and a process that we might follow in terms of this ICAC evolving towards a commission truly devoted to rooting out corruption in South Australia as opposed to other aspects.'

The final point, unrelated to that, that I just make a brief comment on is the issue of public hearings. I am not sure whether my colleague the Hon. Mr McLachlan reiterated this or not, because I missed the first part of his speech, but certainly my colleague in the lower house did, and that is that the Liberal Party's position on this has been clear for some time, and that is the policy position of the Liberal Party. Again, I think it is important for each of us, certainly each of us within the Liberal Party, to look at an evolution in relation to this, an iteration of our policy overall.

I think we should be informed as to what has occurred in interstate jurisdictions and what might occur over the next 18 months, and we should follow the debate within South Australia. There seems to have been a small evolution of the commissioner's statements over the last 12 months. I think each of us should be engaged. I certainly intend to be engaged within my own party in a healthy and ongoing debate about this particular issue.

Again, as we come to a 2018 election, it would be informative and useful for both of the major parties and the minor parties to reflect on their positions in relation to public hearings and the arguments for and against. There are certainly arguments for public hearings, but there are certainly arguments against public hearings.

The Liberal Party's position has been clear for some time on that. I do not argue against that in this contribution that I give today, but I think we should monitor what occurs in the other jurisdictions and what occurs in South Australia. Certainly, we in the Liberal Party and those of you in the Labor Party ought to further reflect as to whether there is an evolution or an iteration that might be acceptable to all when next we debate the ICAC bill. With that, I indicate my support for the second reading.

Debate adjourned on motion of Hon. J.M. Gazzola.

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