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Parliamentary Joint Committee on Law Enforcement
Australian Crime Commission annual report 2011-12

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HARFIELD, Mrs Karen, Executive Director, Fusion, Target Development and Performance, Australian Crime Commission

JEVTOVIC, Mr Paul, Executive Director, Intervention and Prevention, Australian Crime Commission

LACEY, Dr David, Executive Director, People, Business Support and Stakeholder Relations, Australian Crime Commission

LAWLER, Mr John, Chief Executive Officer, Australian Crime Commission

Committee met at» 18:11

CHAIR ( Mr Hayes ): I welcome the representatives from the Australian Crime Commission. Mr Lawler, I invite you to make a statement. We are going to ask some questions on the annual report but if you want to address issues before that please feel free.

Mr Lawler : I am conscious of the time and not eating into the time of committee members to ask the commission representatives questions. Suffice it to say, 2011-12 has been an important year for the commission, a year of, I think, strong performance, a year of some significant achievements in the area, particularly of the task force work that we have done. Some of the task forces have been innovative, they have been groundbreaking, but they are task forces that have been targeting areas that in some instances do not produce the traditional results that many in the community expect from law enforcement. I think there is a cultural challenge in understanding what that means. But there have been some profound outcomes. Our Task Force Galilee that was working in the area of superannuation fraud where we had people who were cyber-enabled targeting the life savings of Australians, and doing it by not even ever coming to this country, is an area where the commission has been very active, and active in bringing together agencies—not only law enforcement agencies—to harden the environment in that particular area. One of the important preventative measures that we undertook in that particular work was a mail-out to every household in Australia—I hope the committee members received their letters from the Crime Commission—about how they deal with unsolicited requests from these cyber-enabled criminals.

There was the Attero National Task Force, that you would have heard of, targeting the Rebels outlaw motorcycle gang: the ACC was a key partner in that task force with the state and territories. And, for the first time ever, a task force was run out of the Serious and Organised Crime Coordination Committee, which was very pleasing to see. I could go through a range of traditional results there around arrests and seizures, if the committee wanted me to. Interestingly, out of that particular task force the Australian Taxation Office advised that $1.1 million has been collected as of 1 February 2013 from those particular individuals in the context of debt recovery of taxes not paid. This is another example of the sorts of tools that can be brought to bear against organised crime.

I mentioned in our previous hearing the National Illicit Firearms Assessment. That intelligence enabled police ministers to make a range of decisions that will improve our understanding and control of illicit firearms. That is very pleasing. The fusion capability, and Mrs Harfield has given you an example of that in our earlier hearing, has had some groundbreaking work done, particularly in understanding the unknown. It is all well and good to respond to things but we have processes now in place and opportunities to find out things we did not know about, and that is particularly pleasing. We also had the reciprocal sharing of target information during the calendar year. We entered into arrangements with the New Zealand Police to share respective target information on people who were threats to our respective countries. The work that has been done through the national targeting system, which allows policing agencies and law enforcement agencies to direct their resources «at» the highest-risk targets, is another profound step in collaboration in this country. We now have an automated structure where the state and territory and Commonwealth agencies around the country meet regularly within their regions against a pre-agreed list of who the highest threats are, and work about deploying resources against those threats. That is something we could have only dreamt of five years ago. Like our earlier work in information sharing that needs to be nurtured, but I can report to this committee that that is in place now as a result of collaboration within law enforcement, and we can be very proud of that.

With those opening remarks and comments, I will leave it there. We will take any questions you have.

CHAIR: Indeed, you should be proud. The parliament is very proud of the Australian Crime Commission as an organisation with a unique composition. It is an organisation that has all the senior people involved in law enforcement across the country. Hopefully, it is an organisation that can bring to bear significant pressure on suppressing organised crime in this country.

As an organisation with a unique composition, with every state and territory police commissioner on your board, the agency gives us a very good insight into what we need to do to suppress crime. One of the things that has been suggested, and this committee has certainly endorsed it, was placing a greater emphasis on unexplained wealth as one of the most significant methods of disrupting and dissipating the activities of organised crime. I still feel a little that, despite the fact that the ACC board fully supported that—which, presumably, means every commissioner on the board saw that as a contemporary measure necessary for fighting organised crime—when it gets back to a jurisdictional level there seems to be a less-than-fully-committed approach to going down the route of unexplained wealth provisions that this committee recommended and that the government has introduced into the parliament through legislation. How does your committee really function, with those senior law enforcement officers from each state and territory having input into those discussions? Why do you think that overwhelming support is not being translated into support «at» a state or territory level?

Mr Lawler : The Board of the Australian Crime Commission, as you say, has an extraordinary composition of law enforcement and national security agency heads represented within it. It is the most powerful law enforcement body in this country for the very reasons that you point out. What we as an agency have tried to do—given it is the board of the Australian Crime Commission—is to make sure that its focus is in accordance with its legislative mandate, which is to set the strategic direction for the commission, and to show leadership in law enforcement in this country. Indeed, the commission played an important role in bringing the commissioners and the board before the committee, briefing the board on submissions that had been made and making sure that board members were as apprised as they could be of the issues that the committee was grappling with.

Outside of that, I can say that the board, by and large, functions in a collegiate way. It is focused very much on the strategic picture, the very important foundation stones of law enforcement, as we saw in the National Criminal Intelligence Model, the national targeting system, the National Organised Crime Task Force that took us offshore. I think they have been very strategic in what they have advanced. I acknowledge what you say about how in returning to jurisdictions—for a range of reasons that are probably best known to individual board members—it is often more difficult to implement or to action particular agreements that might be reached. I am sure you know of a variety of reasons in our federated model as to why that might be. That having been said, I am a glass-half-full person. I am optimistic, and what I see is a trend of collaboration that is increasing and improving, and the further we go the more that will improve, notwithstanding we do find we get setbacks and do not reach outcomes that we might ultimately like.

CHAIR: We would like to keep working with the members of your board. I think they have also come to the understanding that this committee is probably the most bipartisan committee in this parliament, and is certainly very much fixated on ensuring law enforcement policing in particular has the tools it needs to combat serious and organised crime. In that respect, it is interesting that when we take steps to try to assist police that, flowing from those initiatives, we have a few detractors, and particularly detractors who actually sit on your own board. It is one of those things that causes us a little surprise from time to time. I think we need to work on that more but we do value the opportunity, as we have in the past, to meet with your board and give them greater exposure to this committee. We are genuine when we say that we are trying to ensure that law enforcement has the tools it needs and the legislative support it needs. Perhaps we should be talking to police ministers and giving them a lecture on bipartisanship as well.

A number of changes have occurred over the last 12 months, and one of the things I have noticed through the report is the introduction of new KPI measures. Can you explain to the committee why it was necessary to introduce two new KPIs?

M r s Harfield : Can I ask specifically which two you are referring to? Was that from the survey work?

CHAIR: Yes. From the Project SISCO team. Firstly, start off from that part of it: that progress that has been made as a result of implementing their recommendations.

M r s Harfield : The thing with the KPI work was to ensure we were extracting from our partners. Because all the work we do is either with or for a partner, in an attempt to not simply count activity, which you can convert into quantifiable information, there was a sense of trying to achieve results against how we have improved or supported partners. That was the sort of emphasis when thinking through those KPIs, as well as how we could use stakeholder information to give us some feedback about how the products we produce and the work that we do impact on their environment.

CHAIR: I notice from stakeholders and the senior officers that there has been a decline in knowledge and information about the ACC. Is that to be seen as a lesser value of the work of the ACC to policing generally? I do not accept that part of it—I am not having a go «at» you about that.

Mr Lawler : But it is a very valid question and it is one that we constantly reflect on. Our key performance indicators relate principally to a survey of our key stakeholders and the feedback they provide against a range of those. We have done that now since 2009-10. «At» our last annual report meeting I flagged with the committee the need for our key performance indicators to change again. As we evolve it is becoming less relevant and less important in the context of the ACC's work, and more difficult, to try to map arrests, seizures and charges. I flag with the committee that there is work underway.

With the 2011-12 survey I received feedback from members who were surveyed and even members of the board that said they were quite dissatisfied with this survey process and felt that the people conducted the survey did not have a sufficient understanding of the commission. They felt that some of the questions they were being asked were not relevant to their interface and interaction with the committee. For example, they were being asked about tactical intelligence products when some of these senior people being surveyed would not see such material. They were being asked questions that were difficult for them to comment on, which is being reflected in some of the survey material. It is fair to say that «at» senior levels of agencies there is strong support for the commission across the survey results. But, equally, as we have raised in this committee previously, as we move down into agencies, unless that survey is precisely targeted we could ask people about the commission who would have little input to give, and that can also reflect on the agency's performance and what stakeholders think of the agency.

CHAIR: I struggle with this. I am not quite sure of the value of that particular KPI. Going back to my initial comment, police commissioners are on your board and, in promoting the organisation through their own organisations, they probably shoulder much of that responsibility. We do not want to turn the ACC into some kind of marketing organisation, other than sending members letters. In terms of being a tool and working in partnership with state and territory law enforcement, why are we drilling down and focusing on issues such as the decline in the number of executives surveyed about the ACC, and trying to draw some interest from that? I think that is entirely inappropriate. If our work with partner organisations shows that arrest rates are there and seizure rates are good, clearly there is information sharing and, more importantly, we are working operationally in tandem and in partnership. It means bugger-all to me that those figures go up or down. What would you do to drive it up? Flood the New South Wales Police Force with advertising campaigns?

Mr Lawler : But the reality is we require key performance indicators, and key performance indicators for this agency going forward, are very, very difficult, particularly in the context of qualitative data. Karen, can you talk to the committee about the sort of challenges we have around that and what our thinking is as to how we might move forward.

CHAIR: For instance, how do you get it up to the target zone of 90 per cent, other than an advertising campaign. Are you going to engage Saatchi and Saatchi to improve the status of the ACC?

Mr Lawler : «At» the last board meeting in preparation of the stakeholder survey I did a couple of things to try to get more meaning into the actual activity. The first was in reference to my comments about the surveyor. There was an issue of trying to have an independent surveyor survey the board, for reasons that are probably apparent to the committee members. But with the criticism that we had surveyors who did not understand the commission, we have decided, with agreement from the board, that that will be done in-house by this executive, so we will be the ones undertaking the survey. Being the subject of a similar survey myself from another agency, one of the things that is very difficult is to try to get a consolidated picture on the year's interaction between the commission and the particular agency. What we intend to do this year is to provide to the particular agency a snapshot of how the agency has been working with their particular department or agency over the course of the year, both in an operational context and in a lot of other things we do together in the context of information sharing, training, sharing technical equipment and expertise, and appearing and briefing their relevant ministers and governments. There is a multitude of different facets as to how the commission interacts with its partners. That has not been captured properly—probably it is the commission's fault—so that the stakeholder can be properly informed as to what the true interaction looks like.

Mrs Harfield : There is also the element that in changing the operating model we did recognise that staying with the same KPIs meant that we would be shifting some of the activities that we did without shifting the KPIs «at» that time. It was important to understand and settle the model so that in building any performance framework we were actually building the right things. The issue is trying to blend the balance of the quantitative, so we could have KPIs that literally went to the issue of the numbers of things that we produced in terms of intelligence, but of course that could have had a perverse outcome that people produce smaller, less insightful, not as useful pieces of intelligence but from a KPI perspective that looked like a good performance. We were conscious that we did not want to move into that sort of territory without being very clear about what it was that, from our partners' perspective as well as from an ACC perspective, we actually got the development of that performance framework right. That is work that has been carried on «at» the same time as still working towards KPIs that we have had for some time. The KPIs are not the only performance information that we collect or share with the board or with other partners and, clearly throughout the annual report, you see a blend of qualitative descriptors about cases as well as quantitative sorts of measures. The stakeholder part of the current system is an important feedback mechanism as well as then converting that into a sort of ratio number which does provide people with some sort of insight, but there is a lot of detail that sits then underneath that in terms of what we get back from a stakeholder survey. So, the bold numbers probably do not produce for you as rich a sort of picture about what it tells us.

CHAIR: The key stakeholders are actually on your board. When I see these figures tracking up or tracking down, as they have been in the last couple of years, again I ask: if your key stakeholders are board members, what are we supposed to deduce from that?

Senator NASH: Specifically on that: Mr Lawler, you were saying that, in terms of the process, some of those being asked questions were dissatisfied with the process and that those asking the questions did not really understand. What then was the process itself for determining who would be doing those surveys?

How do you get a situation where the people asking the questions do not know what they are talking about? What is the development process for getting the right people to ask the questions? Who oversights that?

Mr Lawler : What we have done, without wanting to make an industry of the survey in itself, is to approach the board. The board and the board members provided us feedback that was not complimentary in relation to the last survey and how it was done. In response to that we have looked to adjust how that is done. The first thing we have said we are going to do is to not employ an outside contractor or to try to upskill contractor or an independent person on the workings of the commission. It is a unique agency and a complex agency, so we think that is best done by the senior executive in the commission going out to the stakeholders and the board to have a frank conversation with them about our very broad relationship. Those sorts of discussions do not normally happen «at» a board meeting. They will be informed within the agency by a sort of a bottom-up approach, with feedback from all the various areas that we might operate to the commissioner or to the secretary as to how the commission is functioning. I have raised that with the board and the board are happy that that can be done in an independent and effective way. They do not feel in any way compromised by not providing us full and frank feedback.

The second thing we have done is to agree that we will provide—effectively, on a page—the full dimension of our interaction with the particular agency that we are surveying. I have found, when I have had similar things done with me, that it is often difficult to understand or remember all the different facets of a particular relationship. If you have something there that serves as an aide memoire then that can improve the performance, or remind a board member that they were not particularly happy with this particular outcome or performance, or whatever the feedback might be.

Senator NASH: I probably was not very clear. You partially answered my question, but I am trying to get an understanding of how the people who were doing the survey were appointed in the first place. What you have alluded to is that they were either outsourced or upskilled to do that. Whose responsibility was it to either outsource for that particular survey or upskill somebody to be the person asking the questions in the survey?

Mr Lawler : It is a good question. It was our responsibility—my responsibility, ultimately. That was done from a panel in a normal Commonwealth procurement context where a particular contract was deemed to be suitable to perform a particular function, and they were then engaged to perform that function in the context of a contractual arrangement with that particular group. We took the view that they had the necessary skills, abilities and capabilities to undertake the survey, but that turned out not to be the case.

Mr MATHESON: The annual report acknowledges new threats in four key areas relating to emerging threats and the serious nature of organised crime in Australia: cybercrime; offshore investment fraud; virtual illicit marketplaces; and harvesting online personal information. Can you outline to the committee the ACC's approach for tackling this four threats and its planned response? Are there any specific threats in those areas that you can outline to us briefly?

Mr Lawler : The key threat for all law enforcement is the cyber environment. It has enabled organised crime like never before, in a whole range of different ways, and it has put the question of jurisdiction in question. Because these «crimes» are happening in cyberspace with anonymity it is often very difficult to understand where the crime is being perpetrated from. There need to be sophisticated capacities to deal with that. These people are very nimble and they are globally connected so that they can respond very flexibly and very quickly to crime opportunities.

I have used the example of the stimulus payment. Fraudsters in West Africa, within 24 hours, were sending unsolicited emails looking to get bank account details from people so the stimulus payment could be made to them. These are often people who have never come to Australia, never will come to Australia, do not have any assets in Australia and are often outside the reach of judicial processes from Australia. So there is a significant challenge, and in some ways there needs to be a rethink about what sort of treatments and tools might be used to disrupt, deter or dismantle these criminal networks.

Part of the solution there comes through non-traditional law enforcement. In some ways the environment is profoundly changing our traditional community policing and organised crime responses. A judicial context in which you would arrest and charge, and put people before courts, is impotent in some of these instances . That is the reality and I suspect that it will continue to grow over time. One of the key challenges is that law enforcement needs to assemble itself with a new tool kit to deal with some of these challenges.

It is not only in the area of fraud, but we see online underground websites where you can purchase anything that is illicit, from a submachine gun to a stolen credit card, from performance enhancing drugs to heroin. This is all done online, done with anonymity and done by people in a way that requires law enforcement to have a totally different skill set to respond to that sort of criminality. We are seeing it manifest in border seizures where there are large amounts of small seizures now coming through the internet as people look to take advantage of some of these online illicit opportunities.

They are some of the key challenges. Of course, technology and organised crime must communicate, that is one thing they must do, but they do so in a way that they protect their communications. They have multiple communication devices and they use sophisticated military-grade encryption. They use every mechanism to defeat law enforcement's attempts to understand how they are communicating, how they are organising, and how they are perpetrating their «crimes» globally. These area couple of key features that law enforcement is trying to tackle.

Announcements have been made about law enforcement and making sure it is part of the cyberoperations response that this country has, which is very welcome. The commission is going to be a part of that. The decision to connect organised crime and national security in a structural context has been very important because we see a overlap between organised criminals and national security with the actions of nation states. As our determinations allow us to do, we have had a number of cases where we have worked with the intelligence community in these spaces. That is why we have ASIO on our board. The intelligence community has helped the commission with the capacities and capabilities that it has to fight this global threat. That goes to the issue of the tools that law enforcement has.

The commission can play an important role «at» the Commonwealth level as being a facilitator with other Commonwealth agencies and, particularly, as a facilitator with the states and territories for this sort of interaction and this sort of leveraging-up of capacity, if I can call it that. It is an important coordination role to play. Without going on for too much longer I think that gives you a window on some of the challenges we are facing.

CHAIR: With respect to the Seller and McCarthy matter being overturned, what is the implication of the New South Wales court's decision in terms of your use of coercive powers?

Mr Lawler : You will have seen from the figures in the annual report that the number of coercive hearings has dropped quite significantly, and that trend has continued. In some ways, a bit like Mrs Harfield said, this should not be a numbers game; this should be done where it is lawfully needed to be done for a specific purpose that fits the act. In one sense, from the commission's perspective, we are not in any way driven by particular numbers or quotas that need to be reached—quite to the contrary. If there are lesser numbers, that can sometimes be reflective of the cyclical nature of the commission's work where the particular determinations are up to.

It is fair to say that we have unprecedented levels of challenge to our coercive powers by organised criminals. It is one of the tools they use to frustrate law enforcement where they attack our processes. Our board determinations and board deliberations have been challenged in the courts, and I am not saying that they should not be challenged, but we are seeing a concerted effort on multiple fronts for that to occur. Of course, there is significant resource that is expended by the commission to defend these matters, which are often quite legally complex and technical. And, indeed, prior to the Seller and McCarthy case there have been a number of cases—the OK case in particular, which looked «at» the use of coercive powers post-charge, whereas Seller and McCarthy was looking «at» use of coercive powers pre-charge—that have caused partners with whom we have worked with to be more cautious than they would otherwise be. I know you are talking to the AFP following our appearance, and the AFP are one such agency where their issues of prosecution might have been impinged, or potentially impinged, by coercive hearings, and in some instances they have elected not to embark on the coercive hearings where there is a risk of jeopardy to prosecutions. We have seen elements of that.

We have also seen, as is proper, that whilst these matters have still not settled in the court in all instances—and there are matters before the High Court on the coercive hearings as we speak—the commission has been very cautious in ensuring that if we have a precedent we make sure that we follow that precedent until the precedent is either overturned in the courts or in some way settled. That has also led to us adopting a position that is ultraconservative, and we think—without being silly about it—that is appropriate and necessary to do. I suspect challenges will continue and these processes will continue to be frustrated because there are many angles that we can be attacked from. I have to say that not many of them have been successful, and we have a very good track record in defending challenges against our legislation and against the coercive hearings.

Senator NASH: The second KPI, where you are talking about whether partner agencies agree or strongly agree that the ACC's intelligence enhances their understanding of serious and organised crime, the results seem well under the target, just looking «at» those figures of 85, 67 and 70-odd. Are you concerned about that?

Mrs Harfield : In terms of the targets themselves, we have always considered those stretch-type targets. They are not ones that we thought we could comfortably achieve, very much for the sake—

Senator NASH: You did not think you were ever going to get the 100 per cent anyway.

Mrs Harfield : Sorry, the 100 per cent for?

Senator NASH: No, the second one. Just the partner agencies, not the top one.

Mrs Harfield : The partner agencies agree or strongly agree?

Senator NASH: Yes, that one. I am assuming that the target is 100 per cent, just for the purposes of—

Mrs Harfield : The target is 90 per cent.

Mr Lawler : It reads horizontally across the page.

Senator NASH: Yes, I see. So the target is 90. There is still that 67 result which was under. Are you happy that they are not actually meeting that 90 per cent?

Mr Lawler : We would like them to be 100 per cent.

Senator NASH: You would like them to be 90 per cent.

Mr Lawler : We would be happy for them to be 90 per cent or better than the 70 per cent.

Senator NASH: I get that.

Mr Lawler : Am I disappointed? Yes, I am. Would I like them to be higher? Part of the response to that is what I have explained to you previously. Ask an agency, 'Do you agree or strongly agree that the ACC's intelligence enhances their understanding?' If they answer that question in a vacuum without the requisite information they may very well say, 'I cannot think of when the ACC provided intelligence that enhanced.' That is why we wanted to try in a more sophisticated way to capture—where we have actually worked with agencies to inform them in a much more holistic way—whether that question could be answered in the affirmative or not.

Senator NASH: I assume that in 2010-11 and 2011-12 only senior executives were surveyed?

Mr Lawler : Yes, that is right.

Senator NASH: Why only senior executives and not field people?

Mr Lawler : When we started off, particularly around 2009-10, part of the issue was: who do you survey? For example, if we surveyed the whole partner agency I would say that probably 95 per cent of them would have no reference to the ACC «at» all because their work does not relate to organised crime. It is a case of who you try to survey and whether the response they give can be in any way meaningful. These are not just the board members; these are senior executive people whom we hoped would understand and have worked with the commission and be understanding of how the commission may have contributed or worked with them. The fact that the result was 70 per cent was surprising and disappointing.

Senator NASH: Has that feedback better informed what you are doing?

Mr Lawler : Yes, it has. But in some ways it has been contradictory to the sort of feedback that we get in a qualitative sense and in talking with our partners. When we talk, and when I talk to the board, we get very different feedback and board members are very happy with how the agency is performing. But when we do the survey the results seem to be different. Whether part of that was—as I said earlier—because of the questions and how they were being asked, or whether it was because we had not adequately laid out what it is that we thought we had actually done with a particular agency in a particular year, I am not sure. What we were hoping to do was to make some adjustments to see if that moved the figure whilst also looking «at» how we were interacting with our partner agencies. It is fair to say that some of the partner agencies may still be looking for traditional outcomes from us, although the board has made it clear that they are very happy with the model that the ACC is employing.

It is quite complex and I do not know that I know the answer to it, but armed with that information—and one needs to accept that that is the information we have—you can try and find a whole range of reasons, or excuses, as to why it is where it is. Some might say that 70 per cent is pretty good. It is a relative thing.

Senator NASH: It is better than 50.

Mr Lawler : It is better than 50 and better than 60. But, from our perspective, we think we should be doing better than that, particularly given what we get in a qualitative sense, the feedback we get from the board and the people that we interact with «at» a senior level. We are really not sure how that is being interpreted, which why we think, over time—I think it goes to the Chair's point—I do not know that is the right way of truly reflecting what the commission does and how it is valued.

Senator NASH: Has the feedback that you have got changed in any way that intelligence you provide or the way it is packaged? Has it had that sort of substantive change as yet, or has it not had quite such a substantive impact?

Mr Jevtovic : The answer is yes. We do not just wait for this annual survey; it is an ongoing process every day, talking informally to stakeholders and reflecting on the things that they tell us. This is a consolidation, if you like, to every year get a sense of how they are feeling about what we do, and we reflect on it. Often with some of these things communication can be «at» the heart of the issue. We reflect on how we are communicating with these stakeholders, who is communicating and what they are communicating. It has a direct bearing on us reflecting on those issues.

CHAIR: As I said earlier, we do not have all of our members here. If I could set a deadline of two weeks to send additional information about after consulting our colleagues, we would be indebted if you can get that back to us as soon as possible, hopefully by 28 March. If we had more time I would have talked to you about the issue of drugs in sport but, having regard to our terms of performance, we are satisfied—the West Tigers are only on sleeping pills.

Mr Lawler : For the benefit of the committee I advise that we had a board meeting last week where the board received a comprehensive briefing on Project Aperio and, most importantly, what has happened since the release of the report on 7 February this year. It talked about what has occurred and what has changed in the environment. Without going into that here, the board were unilaterally and totally satisfied with the effect that was achieved.

Mr MATHESON: Is there any chance we could get a briefing on that somewhere along the line?

Mr Lawler : I would be very happy to provide a briefing.

CHAIR: We might do that «at» a separate occasion, as a range of sports would probably have an interest in it. That might be best done as a confidential briefing. I thank the members of the ACC for their attendance and cooperation.

Committee adjourned «at 18 : 57