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Legal and Constitutional Affairs Legislation Committee
Australian Customs and Border Protection Service

Australian Customs and Border Protection Service


CHAIR: Mr Carmody, good afternoon to you and your team. We welcome you and officers from the Australian Customs and Border Protection Service. Do you have an opening statement?

Mr Carmody : No, Senator.

CHAIR: We will go straight to questions then.

Senator ABETZ: Welcome to representatives of the Australian Customs and Border Protection Service. Can you confirm to me that a human resources roster project commenced about five years ago in the department?

Mr Carmody : I do not have the exact date, but it has been some years, yes.

Senator ABETZ: And a payroll system was also introduced, or was attempted to be introduced?

Mr Carmody : It was not so much a payroll system as a roster. Our COMPASS system includes the payroll system.

Senator ABETZ: At the beginning I just wanted to make sure that we got the terminology right and we knew what we were talking about. We were seeking to upgrade both the roster system and the payroll system?

Mr Carmody : A HR system that primarily we utilise at the moment for a payroll system.

Senator ABETZ: Did we contract with a company known as Microster?

Mr Carmody : That is correct.

Senator ABETZ: Have we now abandoned that project?

Mr Carmody : We found that the Microster system, in our view, was not capable of meeting our requirements, and that was the rostering part.

Senator ABETZ: Was that at a cost of about $5 million?

Mr Carmody : I think we have done an impairment which would cover the area—

Senator ABETZ: What is an 'impairment' mean?

Mr Carmody : Impairment is where there has been investment in an asset and where the actual capability does not prove to be utilisable.

Senator ABETZ: What does that tell the Australian taxpayer about how much money has been spent on this project which has not come to fruition?

Mr Carmody : It says that we were unable to deliver some component because, as we got into the operation of that system, we found that it was not capable of delivering what we wanted.

Senator ABETZ: How much did it cost?

Mr Carmody : I will get my chief finance officer.

Mr Groves : In the 2009-10 financial year we impaired $3.6 million associated with the Microster—

Senator ABETZ: Was any money impaired in previous years in relation to this project?

Mr Groves : No. I guess the impairment relates to the component of expenditure that was capitalised and was sitting on our balance sheets as an asset under construction. There may have been other costs associated that were not capitalised. I do not have those with me but I can confirm that the impairment amount, which was the majority, was $3.6 million.

Senator ABETZ: Are we anticipating that we will have an impairment amount on the 2010-11 figures?

Mr Groves : Not in relation to the Microster component.

Senator ABETZ: What about the payroll component?

Mr Groves : Yes, there was some work that was impaired in the 2010-11 year associated with the broader payroll, I guess.

Senator ABETZ: Is that just a write-off to the layman when you impair something? It sounds a fancy word but is it just a write-off?

Mr Groves : We did write off the components in it—

Senator ABETZ: So we can say $3.6 million was written off in relation to the roster system—right? Can I take you then to the payroll system. How much was impaired or written off there?

Mr Groves : Reflected in our financial statements was $9.6 million.

Senator ABETZ: Was the director—and I do not want names—of National Pay and Accounts responsible for the overseeing of this task?

Mr Carmody : No, they were involved in a lot of the testing and specifications, but they were not responsible for the overall project.

Senator ABETZ: Which person—not by name designation but by position—was responsible for the overall delivery of these two projects?

Mr Carmody : That changed over time, but in the latter part we assigned an individual SES officer. Her exclusive role was to bring the project to fruition.

Senator ABETZ: And it has not come to fruition?

Mr Carmody : Yes, it has. It is operating now. We have been paying through that system since the first pay in this financial year.

Senator ABETZ: So it has now come to fruition, but with a write-off of considerable millions of dollars. Has that person received a bonus payment?

Mr Carmody : I do not know, but the person who delivered that took over a project—as is evident from the impairments or write-offs—that was not delivering to the standard we expected, so I am not doing her performance assessment now. But that person actually brought the project on track.

Senator ABETZ: Was that person paid a bonus?

Mr Carmody : I do not know.

Senator ABETZ: You can take that on notice. You can give us a date on notice as to when responsibility shifted from one designated officer to another, keeping in mind I do not want to know names.

Mr Carmody : I understand.

Senator ABETZ: And whether the predecessor person—if I can describe it as such—who was responsible for implementing this was paid a bonus in the previous years.

Mr Carmody : We will take that on notice.

Senator RHIANNON: I have some questions about Customs. What actions have Customs taken to prevent any further dog fur pelts—and I am referring to Canis familiaris, not the so-called raccoon dog—from entering the country?

Mr Carmody : I will get our expert to advise you.

Ms Major : We have a range of approaches or activities that we employ to ensure that cat and dog fur does not enter Australia. Those strategies are based on, for example, information that we might receive from the public or from concerned companies that direct our targeting efforts. Where we have concerns about a particular consignment, we would arrange to have the consignment examined to determine whether those goods contained cat or dog fur.

Senator RHIANNON: When you say you receive information from the public, do you then go to the store that may be selling those goods and then follow through with the chain of supply?

Ms Major : It depends on the circumstances, but generally speaking if something is found in the domestic market but we know that those goods have been imported, we would work with the importer to determine whether those goods had breached the import control.

Senator RHIANNON: My question was specifically about the chain of supply. A member of the public would not understand all this. They have seen some goods in a shop that they are concerned about. You have inspected them and determined that they are dog fur. Do you then speak to that business, ascertain where they purchased them from and follow that back through? Could you provide that detail?

Ms Major : Where we have an allegation of cat or dog fur, we would normally approach the importer in the first instance. We would ask them to present documentation to us to verify the details of where that has been imported from, what the particular product is constituted from and any commercial information that we thought was necessary to examine that issue. If we had reservations about whether the product contained cat or dog fur, we could then ask that company to have that product tested by an appropriate expert. Depending on the results of that testing, we would take further action.

The records since 2007 show that we have had 19 referrals in relation to 17 instances regarding cat or dog fur. In some of those instances, the goods have been destroyed where the importer has not been able to provide sufficient evidence to reassure us about the origins or the nature of the fur. In other instances, those goods have been released—for example, where the laboratory testing has indicated that they were not dog fur.

Senator RHIANNON: You made the comment that you approach the importer in the first instance. I go back to the example from the public because that is how a lot of the examples come to us. In the first instance, would it be that you would have to approach the seller, the retailer, of those goods to find out who the importer is?

Ms Major : In some instances that would be right, yes.

Senator RHIANNON: How would you find out who the importer is otherwise? Are you saying you already know who the importers are of most of these good so you do not need to ask the retailer? I am trying to understand how it works because we are getting so many complaints about this.

Ms Major : In some cases the importer is the retailer and they have agents who work on their behalf. In other cases, where the retailer is not the importer, we would discuss with the retailer who is acting on their behalf in terms of bringing the goods into Australia. Using that information we would interrogate our records to allow us to look at what shipments might have come through at what times and where they have been distributed to, for example.

Senator RHIANNON: In response to an earlier question, you said you would ask for the product to be tested. Does that mean the retailer or the importer is obliged to do that when you make such a request? If so and they do not do it, what happens?

Ms Major : Customs has the authority to ask the importer to have the goods tested where we have concerns about the nature of the fur in a garment or in a pelt that has been imported. That testing is conducted at the expense of the importer. If they refuse to have that testing done and we have reasonable grounds on which to believe that the particular goods contain prohibited fur—as you say, domestic dog fur—then we would generally arranged to have those goods seized. The person that we seize them from can seek to claim them back. If they do that, we would go before a court and present our information about why we believe that they have breached the import control. Generally the experience to date has been that, where seizures have occurred, those goods have subsequently found not to be dog fur and they have been released. In others, they have been abandoned and the goods have been destroyed.

Senator RHIANNON: I understand following an investigation by the Humane Society International that there was no person within Customs who can identify dog fur. Have Customs staff now been retrained so they can identify a fur pelt sourced from Canis lupus familiaris?

Ms Major : Customs officers are not experts in assessing fur and the nature of fur contained in a garment. We do not do that ourselves. Where we have concerns we refer the fur for testing or examination by another authority.

Senator RHIANNON: In one of those tests carried out recently, was it found that there were high levels of hexavalent chromium in those fur pelts?

Ms Major : That is not correct.

Senator RHIANNON: Did you find there was any chemical contamination?

Ms Major : The laboratory results that have been provided to us by HSI indicate that there was hexavalent chromium in a particular sample that was tested. The expert advice that we have from a number of government agencies is that the levels of hexavalent chromium in those garments were unlikely to be a risk for anything other than contact dermatitis.

Senator RHIANNON: Considering hexavalent chromium is classified as a class 1 human carcinogen by the World Health Organisation's International Agency for Research on Cancer and it is reported that it is regularly used in dog fur pelts sourced from China, is this an issue that your office is paying attention to, particularly in the context of occupational health and safety for Customs officers?

Ms Major : It is certainly an issue which we have paid very serious attention to, not so much in terms of our officers, but perhaps I can elaborate. My understanding from the expert advice we have received from both Safe Work Australia and from the Australian Competition and Consumer Commission is that although hexavalent chromium is a carcinogen its cancer-causing properties, if you like, occur when the dust is inhaled or ingested. In this case, the hexavalent chromium is a residue in the garment because of a treatment during the tanning process and the expert advice that we have received from those outside agencies is that the risk is around leaching into the skin through sweat. We have also had advice that the residue amounts in the particular products tested were at a low level and it was unlikely to cause anything other than contact dermatitis. The ACCC has advised us that they have no record of an adverse reaction in relation to this particular product. In addition, there is no prohibition on items coming into Australia with hexavalent chromium in them.

Senator RHIANNON: I understand that there was a recent report, possibly a government report, on the testing of Witners and Myer products. Will you table that report?

Ms Major : Those reports are the property of the importers, in that case the two particular companies. We have seen the results but they are not our reports.

Senator RHIANNON: Is that a follow-on from that earlier explanation that you gave that it is the responsibility of the retailer or the importer to undertake the test?

Ms Major : We can certainly direct that they undertake those tests. In those two cases, my understanding is that both retailers undertook those tests voluntarily and shared the results with us.

Senator RHIANNON: How are you confident of the integrity of those tests if the company that is involved in importing the fur pelts are the ones responsible for organising the test and then showing you the report?

Ms Major : I do not think we are in a position to adjudicate over the laboratory results; however, we did review the results. They were very comprehensive analysis reports. All of the test reports, including those provided by HSI, qualify their conclusions by saying that microscopic testing of animal fur is not an exact science. We examined two tests that were undertaken on behalf of those companies. One was undertaken by the Centre for Forensics Studies at the Canberra University, which is a very well regarded laboratory and is used by Customs in, for example, testing in some of our narcotics areas. The other was undertaken by the CSIRO, who I understand HSI has used previously themselves.

Senator RHIANNON: The information I have received about that report is that it actually discounts the findings of Hans Brunner, who I understand is the world's leading expert on mammalian hair identification. Considering that we have such conflicting advice, shouldn't this information be made public because it appears that there is no easing up on this trade in dog fur pelts coming to Australia.

Ms Major : Our examination of the reports indicated that there was no evidence to suggest that the goods that had been imported were in fact dog fur. As I say, we are not in a position to adjudicate between the experts, and the reports are not our property.

Senator RHIANNON: In terms of launching an investigation into these illegal products, would you consider it or are you asserting that in fact there is not enough proof that they are illegal.

Ms Major : In order to be able to seize and destroy goods or to stand before a court we would need to have very solid evidence that the goods were in fact prohibited items. In this case we do not have, in our view, sufficient evidence to indicate that the goods are in fact dog fur and are therefore prohibited items.

Senator RHIANNON: One final question: is it that they are not dog fur or are they what is often called 'raccoon dog', which I understand is not illegal?

Ms Major : If I recall the test results correctly, it is a combination of both. In some cases there is a suggestion that some of the elements may have been raccoon dog, which is not an illegal pelt, and in other cases that the fur in fact was rabbit or musquash.

Senator RHIANNON: Thank you.

Senator WRIGHT: The background to my questions are two missing boats, one of which left Indonesia on 2 or 3 October 2009 with 105 Hazaras aboard. The second left Indonesia on or about 13 or 14 November 2010 with up to 97 people aboard. First of all, in relation to the latter boat, Customs told the Sunday Age on 26 December 2010 that Customs was not aware of the missing boat of 97 people and told the Sydney Morning Herald on 8 May 2011 that it had not received any calls about it. Since then, Customs and Border Protection have said:

A number of enquiries were received by the Department relating to people who were believed by family members to have travelled from Indonesia to Australia on or around 13 November 2010 and had not been heard from since. These calls were received via the SIEV 221 hotline established following the Christmas Island boat crash disaster on 15 December 2010.

My first question is: can Customs explain the contradiction? Why did it initially say it was unaware of the missing boat and then change its mind?

Mr Carmody : Because at the time the statements made they were accurate. At that time we did not have information available to us.

Senator WRIGHT: I am just trying to make sense of that answer, given the dates that I am aware of. The first statement to the Sunday Age was made on 26 December 2010 but the calls were apparently received by the SIEV221 hotline established following the Christmas Island boat crash disaster on 15 December 2010. Are you saying that the calls that came in were after 26 December 2010?

Mr Carmody : No. To clarify, the advice given by our people was in respect of what we knew and what calls we had received. The SIEV221 hotline calls you are referring to were received by the Department of Immigration and Citizenship.

Senator WRIGHT: So the information was not passed on to Customs as far as you are aware.

Mr Carmody : It was not until we received one inquiry that was after the date that that media inquiry was made.

Senator WRIGHT: Which of the two dates that I referred to was it after? Can you tell me?

Mr Carmody : In each case of the statements that were made we had not received what was the basis of the inquiry; we had not received that information at that time.

Senator WRIGHT: If you do not have the information now, at what date were you first aware of the fact that there had been a number of inquiries received by the department relating to people who were believed to be family members? At what date were you advised that there were inquiries made on the SIEV221 hotline?

Mr Carmody : We received one inquiry directly to Customs and Border Protection. That was on 29 July 2011, which was after the dates you were referring to.

Senator WRIGHT: Was that directly from a family member or a concerned member of the community?

Mr Carmody : It was a family member, as I understand it.

Senator WRIGHT: I understood from your answer that there was information passed on to you from the department of immigration, who would have been in receipt of the information in relation to the SIEV hotline. When was that information passed on?

Mr Carmody : It was after 26 December 2010, which is the relevant date. It was actually received on 4 January 2011.

Senator WRIGHT: I did refer to an article in the Sydney Morning Herald dated 8 May 2011, which was four months after 4 January.

Mr Carmody : Yes. I think that was a different issue.

Mr Pezzullo : In relation to the Sydney Morning Herald article on 8 May to which you refer, I do not have the article in front of me but as I recall the article having cleared the media response I have got a fairly direct recall of it. The journalist inquired why it was that in the December response that we had previously given to the same journalist, Ms O'Brien, we had not been in a position to identify those calls that had been made to DIAC, as the CEO has just said, because we were notified on 4 January. So that deals with an element of the Sydney Morning Herald story of 8 May.

The journalist who wrote the story in May for the Sydney Morning Herald also asked a question about whether at that time we had received any direct calls about that venture. As I recall it and as the CEO has just indicated, over the course of these past months whilst this matter has been a matter of public interest, our agency received one call directly, in July, and, as the CEO is indicated, that was received on 29 July of this year.

Senator WRIGHT: Just turning to the second boat, this was the boat with 105 Hazaras aboard which went missing on or around 2nd or 3rd of October 2009. The home affairs minister, Brendan O'Connor, was reported in the Sydney Morning Herald on 25 May 2010 as saying that 'subsequent credible information' to Customs showed the boat's difficulties had been resolved. He later added:

... surveillance activities that day by border protection command did not detect a vessel in distress.

But since then, Customs and Border Protection has been quoted as saying:

... information Customs and Border Protection received about a vessel in distress on 3 October 2009 may have referred to this incident ... Customs and Border Protection advised the Australian Maritime Safety Authority ... of a possible distress situation, including possible vessel coordinates ... AMSA contacted ... the Indonesian National Search and Rescue Agency, who accepted responsibility for coordinating the search.

So my first question in relation to this vessel is: where did Customs get the information from that there was a boat in distress?

Mr Carmody : I do not know that I can go into specific detail of intelligence we receive, but it was a report about a possible vessel in distress. We did cover this in the estimates hearing in May of last year.

Senator WRIGHT: My understanding is that additional information has come to light, which is why I am asking these questions again. So there was a report that there was a boat in distress?

Mr Carmody : We received a level of intelligence that a vessel may have departed and be in distress. Then we provided that information to AMSA. Because the possible location was reported to be in the Indonesian search and rescue zone, AMSA then, as is normal practice, provided that information to BASARNAS, the Indonesian search and rescue authority. I am not quite sure of the sequence. Shortly after we got the initial evidence, we got a further source of intelligence that said that the vessel was no longer in distress. BASARNAS also reported back that they had been unable to locate a vessel in distress. Notwithstanding that, we continued a flight pattern just to make sure as best we could whether there was such a vessel in distress and that showed no evidence, there was no sighting of the vessel.

Senator WRIGHT: But it sounds from your answer that there was no firm evidence that the vessel had been located, so—

Mr Carmody : We never located a vessel—

Senator WRIGHT: the assumption was that because no vessel was found, there was not a vessel.

Mr Carmody : We do not know. The truth is that we just do not know. There were those reports. We pursued them. AMSA pursued them. We were never able to locate the vessel.

Senator WRIGHT: What date was that initial report made?

Mr Carmody : On 3 October 2009.

Senator WRIGHT: You have indicated that you do not feel at liberty to indicate who made that initial report.

Mr Carmody : That is right.

Senator WRIGHT: What degree of credibility was attached to the report?

Mr Carmody : It was sufficient for them to make the report for us. We take all these issues seriously because of the potential consequences. We judged it sufficient to raise it with AMSA and then judged it sufficient to raise it with BASARNAS. Notwithstanding BASARNAS's response that they were unable to locate any such vessel in distress, we did take the precaution of continuing to do a flying pattern to attempt to locate it.

Senator WRIGHT: What period of time was that over?

Mr Carmody : It was over a number of days, I think.

Senator WRIGHT: You are not quite sure but you think it was a number of days?

Mr Carmody : No, I do not have the exact detail of the flying time but it was a few days.

Senator WRIGHT: I might ask you to take that question on notice and then we can establish what period of time.

Mr Carmody : We will take that on notice.

Senator WRIGHT: The question comes back to the fact that the home affairs minister was then quoted as saying that 'subsequent credible information' to Customs showed the boat's difficulties had been resolved. What difficulties would they have been?

Mr Carmody : I referred to that in my answer, that—

Senator WRIGHT: Difficulties in that they were not able to be found?

Mr Carmody : No, the difficulties with the vessel. I do not know whether there were mechanical or other difficulties but the difficulties that were leading to the view that they were in distress.

Senator WRIGHT: What was the basis on which it was considered that their difficulties had been resolved? What was the information that was provided? That seems a very assertive statement to make. What was the basis of the information that they had difficulties and that they had been satisfactorily resolved?

Mr Carmody : The report was that the difficulties had been resolved, yes.

Senator WRIGHT: And you cannot tell me who made that report?

Mr Carmody : I would prefer not to go into our sources. I can just say again that, notwithstanding that report, we did continue to take precautionary action to seek to identify whether there was any such vessel.

Senator WRIGHT: It was a vessel that was never actually identified is what I understand to be the case.

Mr Carmody : We have never been able to identify it as a vessel that arrived, for example.

Senator WRIGHT: But there was a report that the vessel was potentially in sufficiently serious trouble to involve a procedure and then there was another report that their trouble had been resolved but you cannot give any further information about who made that report or any other basis on which you accepted that report, although I accept also that you have given evidence—

Mr Carmody : They were from the same sources, I believe.

Senator WRIGHT: They were from the same sources?

Mr Carmody : I believe they were.

Senator BRANDIS: I am going to pursue the issue that Senator Wright has just been pursuing about these two missing vessels. Let us start with what we might call the October 2009 vessel. Your agency answered in question on notice No. 86, taken from Senator Ronaldson at the last estimates, that it had conducted a review into the incident and that there may have been a boat carrying 105 Hazara asylum seekers. When was that review instigated? In particular, was it only instigated after the matter was first reported in the press on 17 January 2010?

Mr Carmody : Following the report on 18 January, we conducted a further review of our holdings of information, which confirmed, as I understand it, the information we had previously given in Senate hearings.

Senator BRANDIS: Who ordered the review? Did you order it, Mr Carmody, or did the minister order it?

Mr Carmody : I did not; I do not know who.

Senator BRANDIS: Mr Pezzullo?

Mr Carmody : Mr Pezzullo can tell you.

Mr Pezzullo : After the emergence of media reporting, which itself was based on very similar phenomena to the matter that you discussed before with the AFP about where family members come forward, both the Department of Immigration and Citizenship and the Federal Police advised us of concerns being raised by family members. Coincidental with the publication of the media report in the Age on 18 January—I cannot quite remember the sequence; I will have to take that on notice—I directed the intelligence assessment team, which works within Customs and Border Protection but which draws together relevant reports from all agencies, to review, as Mr Carmody just put it, all of our holdings on the matter, all the contemporaneous sources of information that we had, including the information that Senator Wright just went to. We satisfied ourselves that there was nothing further that had come to light in the period between October 2009, when the incident contemporaneously had occurred, and January 2010, when those media reports started to emerge. I satisfied myself that there was no further information that we had to hand. Nonetheless, as is stated in the response to question on notice No. 86, we took the liberty of consulting again with a number of other agencies just to make sure that no-one had any fresh information that had come to light since.

Senator BRANDIS: So you initiated this review.

Mr Pezzullo : Yes.

Senator BRANDIS: And the review, having canvassed the matters you have just mentioned, reached the conclusion you have just given. What became of the review? To whom was it sent? Was it, for example, sent to your minister?

Mr Pezzullo : Indeed, as is referred to in the answer as part (e), a brief on the review that had been conducted was submitted to the Minister for Home Affairs on 20 January 2010.

Senator BRANDIS: That review has never been made public, has it?

Mr Pezzullo : No.

Senator BRANDIS: What is the reason?

Mr Pezzullo : Elements of it would be highly classified.

Senator BRANDIS: What sort of elements?

Mr Pezzullo : Some of the matters that Mr Carmody was going to earlier in terms of how we come to learn certain things about the status of a vessel, the syndicates that put them to sea and other relevant matters.

Senator BRANDIS: Certain operational, policing, surveillance matters—

Mr Pezzullo : And intelligence matters.

Senator BRANDIS: and intelligence matters would be highly confidential. I can understand that. Why can't the review with the redaction of those matters be published?

Mr Pezzullo : That is something I would have to look at very carefully, to take on notice and give consideration to.

Senator BRANDIS: I am asking you to do that, Mr Pezzullo and Mr Carmody. I can perfectly understand and would not press you to put into the public arena intelligence matters or sensitive operational matters that might compromise operational activities of your agency or other agencies, but it does seem to me that a review of the kind you have described could, in a redacted form, be placed into the public arena.

Mr Pezzullo : That is a matter we will have to take on notice and consult appropriately.

Senator BRANDIS: I am asking you to do that. You are familiar with the conclusions of the review, aren't you?

Mr Pezzullo : Indeed.

Senator BRANDIS: I am surmising here but I assume the review would have included an appraisal of the various holdings—to use Mr Carmody's word—that you had, and an analysis, and that it would have stated some conclusions.

Mr Pezzullo : As I recall the document, it broadly could be characterised in those terms.

Senator BRANDIS: As I say, I am surmising, but that seems a logical way in which something like that would be done. I am going to ask you about the conclusions. I cannot immediately see why the conclusions would reveal any intelligence matters. Did the review conclude that such a vessel had in fact put to sea in October 2009?

Mr Pezzullo : It is difficult to answer that because the status of our knowledge of whether or not a vessel had in fact put to sea, the evidence base, might be solely a highly classified base. I would prefer to take that on notice as well.

Senator BRANDIS: I am going to press you on this. I am not asking you to reveal the evidentiary steps or the analytical steps by which your review may have arrived at a conclusion. But I think I am at liberty to ask you what conclusion was arrived at without asking you to reveal the steps that got you to the conclusion. Was it the conclusion of the review that a boat had put to sea in October 2009?

Mr Pezzullo : I would have to refresh my memory by looking at the report.

Senator BRANDIS: Is the report available in the committee room?

Mr Pezzullo : No.

Senator BRANDIS: Can it be obtained and brought to the committee after the dinner break so that you can refresh your memory, Mr Pezzullo?

Mr Pezzullo : I am happy to take some guidance from the minister and others. I would prefer to do this in a calm and reflective kind of way.

Senator BRANDIS: We would all prefer to do things calmly and reflectively, but we are also under the pressure of time. I have conceded freely that you should not be asked about intelligence matters, and I am not asking about intelligence matters; I am asking about conclusions that were reached. You seem very familiar with this review; if you tell me that you cannot remember whether the review concluded that the boat had put to sea, I will take that at face value. I would like the review to be requisitioned and brought to the committee room so you can refresh your memory, only about its conclusions. I am going to ask you about those conclusions. How long will it take for that to be done?

Mr Pezzullo : I would prefer to consult before I answer that question.

Senator BRANDIS: No, how long will it take for that to be done?

Senator Ludwig: The officer has indicated that he is more comfortable taking the question on notice. The question also surmises that there is a conclusion.

Senator BRANDIS: The officer has conceded that the review makes conclusions.

Senator Ludwig: But it may not make conclusions about the matters you refer to.

Senator BRANDIS: That is why I am asking him to familiarise himself with the review.

Senator Ludwig: They may go to the substance of the intelligence issues. I have not seen the document, so I am not trying to intercede on Customs' behalf about the document. It seems to me that Customs are willing to look at the document and provide, on notice, a response to your questions.

Senator BRANDIS: On notice is no good to me, Minister. The only reason the witness has put forward for his inability to respond immediately to my question is he wants to refamiliarise himself with some conclusions. That can be done by looking at the document. It has not been said that there is anything onerous about fetching the document and bringing it to the committee room. Presumably, a copy of the document exists in reasonable proximity to here. I will not be fobbed off. Mr Pezzullo, how long will it take you to have the document brought to the committee room

Senator Ludwig: I think in this instance they can take it on notice, they can refamiliarise themselves and then give you an answer as to whether they have had sufficient time to be able to then answer your questions after the dinner break, or within a period of time. That allows them to consider it and come back with a more definitive answer.

CHAIR: That is if, in fact, Customs are here after the dinner break. If we finish answering questions we might not require them back.

Senator BRANDIS: I have so many questions for Customs, I can promise you they will still be here after the dinner break.

Mr Pezzullo : To assist the Senator, I have just taken advice. I can say, without going to the questions of sources and intelligence—as you have indicated, you are not going to press on that in any event—that both contemporaneously in October, when we flew the surveillance flights and made the references to BASARNAS, as the CEO has said, and subsequently in the review that was done in January that was reported to the minister on 20 January, it was taken as assumed that a boat had left. There was sufficient material evidence that a boat had left. I do not want to go to the basis for knowing that. You have indicated that you understand that. To the extent that you can only ever really validate whether a boat is, if you like, on the water through surveillance, as the CEO has indicated, no surveillance outcomes were ever, if you like, achieved either in October or when we reviewed the data later. But there was certainly some intelligence indications that a vessel had left. I am very confident—if I need to correct the record of course I will—that the review of the material in January 2010 would have reaffirmed that. I will come back to you if, on refreshing my memory—

Senator BRANDIS: If you want to change that answer, elaborate it or qualify it then come back to us by all means. You can do that over the dinner break.

Mr Carmody : Just to clarify, the conclusion was on the probability that the vessel had left. We still do not know what happened to it. We do not know whether it sank; we do not know whether it turned back. We just do not know.

Senator BRANDIS: That is why I am asking you these questions. I think we all understand that the conclusions do not have to be 100 per cent certain. They are probabilistic conclusions of what was likely in all the circumstances and on the basis of all the material that was reviewed in your holdings. We will proceed on that basis.

In answer to questions from Senator Wright you addressed the issue, which was also canvassed in the press reports, that there was reason to believe that the boat had some difficulties. What was the nature of the difficulties? Was it foundering? Was it sinking? Was there some other form of distress at sea situation? What were the difficulties?

Mr Pezzullo : In general terms, as we broadly indicated in evidence given in May last year to Senator Hanson-Young, who asked similar questions, there was a distress situation that appeared to be occasioned by mechanical difficulties. It is difficult, without going further into some highly sensitive grounds, to be any more precise than that.

Senator BRANDIS: That is fine.

Mr Pezzullo : How that information has been characterised is not in this case necessarily characterised by someone who is expert in such matters, if I can put it in those terms, and I do not wish to go any further. But they would certainly be generally characterised as mechanical in nature.

Senator BRANDIS: You concluded probably the boat had set out from Indonesia. You concluded that it was in a distress situation caused by mechanical difficulties.

Mr Pezzullo : Possibly.

Senator BRANDIS: I am just listening to what you just said. What happened to the boat?

Mr Pezzullo : The end result is we do not know.

Senator BRANDIS: So is the last piece of information you had about this vessel that it was in distress because of mechanical difficulties?

Mr Pezzullo : No. In fact, the last active piece of information we had—

Senator BRANDIS: I am not quite sure what an 'active' piece of information is.

Mr Pezzullo : Where we have got a lead as to the situation that is emerging on the water—is that it had rectified whatever the original source of the situation was and that it had resumed its journey. And it was never heard of subsequently. That goes back to Senator Wright's question about the basis upon which Minister O'Connor made certain statements.

Senator BRANDIS: That is what I was trying to establish. You believe the boat set out. You believe, for reasons that I am not going to ask you to go into the evidentiary basis of, that it was in a situation of distress due to mechanical difficulties. You believe it resolved those difficulties and, what, resumed its journey?

Mr Pezzullo : Yes, resumed its journey. But, as the CEO said, out of an abundance of caution we continued to fly surveillance and continued to stay in touch with BASARNAS.

Senator BRANDIS: And after it had resumed its journey, having resolved its mechanical difficulties, was the status of the vessel the last piece of information you had about this vessel?

Mr Pezzullo : It was the last piece of information that we received contemporaneously. As I have indicated in earlier answers, subsequent to that contemporaneous situation family members started to come forward in the latter part of 2009.

Senator BRANDIS: Let us deal with contemporaneous information first.

Mr Pezzullo : If I can use the technical jargon, the last real-time or near real-time information that we had was that the vessel had resumed its journey, but we continued the surveillance posture that we had and the liaison with BASARNAS.

Senator BRANDIS: May I take it that at the time it resumed its journey it was continuing to head in the direction of Australian territory?

Mr Pezzullo : We do not know. As I said in my earlier answer, we did not have active surveillance on the vessel. We had some other means of indicating its status.

Senator BRANDIS: I see.

Mr Pezzullo : What direction it ultimately decided to head in, if indeed it was under its own power et cetera, we just do not know, in a real-time sense.

Senator BRANDIS: Are you able to give us an estimate of the time, in hours or days, that elapsed between the vessel having set out and the last real-time indication you had that the vessel was still on the water and under way?

Mr Pezzullo : I would have to refresh my memory, and again I do not want to be overly precise about how it is that we come to know these matters. But the gap, as it were, between the estimated or assumed point of departure and the estimated or assumed point of distress was measured not in days but in hours—but whether that was 24 hours or 28 hours or in that vicinity, and whether you would describe that as hours or a day, I do not know. I do not want to be any more precise than that without refreshing my memory.

Senator BRANDIS: No, that is fine. Was there a time line as well between the point at which you understood the vessel to be in distress and the point at which your best information was that the vessel was no longer in distress and had resumed its journey? In other words, how many hours after the report that the vessel was in distress was the last real-time evidence that you had that it was continuing to undertake its journey?

Mr Pezzullo : I will correct the record if required but, as I recall it, it all transpired within a matter of hours.

Senator BRANDIS: Within a matter of hours. Okay. And, at the time the vessel was believed to be in distress, was it in international waters?

Mr Pezzullo : I would have to take that on notice. In terms of the possible coordinates, which were not precise, not down to seconds in terms of latitude and longitude, I would have to take that on notice; but it certainly was, because of the AMSA referral process, in Indonesia's search and rescue zone.

Senator BRANDIS: It was in the Indonesian search and rescue zone, and it may or may not have been in international waters.

Mr Pezzullo : Whether it was in their contiguous zone or just outside, I just do not recall.

Senator BRANDIS: That is fine. And as of the last real-time report you had of the vessel, when it had resumed its journey and the distress situation was apparently behind it, was it at that point in international waters?

Mr Pezzullo : It is the same answer as before: I would have to refresh my memory. Certainly, it was in the Indonesian SAR zone. As for whether or not it was in the contiguous zone, I would have to refresh my memory.

Senator BRANDIS: All right. Now, that is the contemporaneous or real-time evidence, and then you had some subsequent or, if you like, retrospective evidence as to what may have happened to it. May I surmise that that evidence included inquiries from members of the public that were passed on to you, asking about the fate of their family or acquaintances who were aboard that vessel?

Mr Pezzullo : Yes, Senator. Again, I would have to refresh my memory as to the evidence that the CEO and I gave on 25 May 2010 to Senator Hanson-Young. But, as I recall that evidence, we did make reference to family members who had come forward—principally, as I recall it, to the department of immigration.

Senator BRANDIS: Mr Pezzullo, I do not want to oversimplify what you have told the committee, but it seems to me that we have three stages here. We have the point at which the vessel embarked, we have the point at which the vessel was believed to be in distress for mechanical reasons and we have the point at which, subsequently, it was once again on its journey and your understanding, or your conclusion, was that it was no longer in a distressed situation; and the time line for those three stages in the sequence of events is a matter of hours rather than days.

Mr Pezzullo : The gap between the first and second stages, as you have described it, was probably more in the order of a day, and the gap between the second and third stages, as you have described it, was within a period of hours.

Senator BRANDIS: Okay. I understand.

Mr Pezzullo : I was on duty that night, so I have a fair recall of it. If I could just be very clear, in case I have not made it clear already: at the third stage, when the vessel had potentially rectified itself and was resuming its course—unknown as that was—we were very cautious. The standard of evidence or the threshold of credibility, to go back to Senator Wright's question, that we apply in these cases is very low. We do not spend a lot of time gaming or second-guessing the source overly. If it is broadly credible and there is safety of life at sea at stake, we act as if what we are being told is very much real and true. So, even when we got to that third stage—the vessel has rectified its difficulties, has resumed its course—we discounted that to the extent that we took it as if it still might be in distress and hence continued to fly patrols. That is what Mr Carmody, and I think the minister, said at the time, when that other quote of his was read out to the committee.

Senator BRANDIS: All right. That is really where I was heading. At the point at which you concluded in real time that you thought this vessel was in distress for mechanical reasons, and allowing for the fact that it was in the Indonesian search and rescue zone, what steps did you initiate, if any, to come to the aid of this distressed vessel?

Mr Carmody : We have already indicated that we passed that information on to AMSA, who have the responsibility for search and rescue. Because it was suspected that the likely location, if I can put it that way, was in the Indonesian search and rescue zone, under their convention they passed that information to the Indonesian search and rescue authority, BASARNAS, who conducted their inquiries and concluded and advised AMSA that they could not locate any vessel in distress.

Senator BRANDIS: There is no reason to believe that, post the period of distress, the vessel reached the shores of Indonesia, is there?

Mr Carmody : We do not know. There is no specific evidence.

Senator BRANDIS: There is no evidence that it did, is there?

Mr Carmody : No.

Senator BRANDIS: What was the form of your communication to AMSA? Was it an email? Was it a telephone call? Was it some other form of communication? If so, what?

Mr Pezzullo : On the precise details I might refer to my colleagues in the Border Protection Command. They handled the specifics of the liaison.

Senator BRANDIS: Mr Pezzullo, this is obviously an urgent situation. There is a vessel at sea in distress. We know from experience that these are reasonably flimsy vessels. It could sink in a matter of hours or potentially minutes.

Mr Pezzullo : We are very seized of that, Senator.

Senator BRANDIS: You do not know how perilous the situation is, but the moment you become aware or conclude that it is distressed then it is obviously an intrinsically urgent situation, isn't it?

Mr Pezzullo : Indeed.

Senator BRANDIS: And treated as such.

Mr Pezzullo : As I said earlier, I was on duty that night. I would have to check my own records. I would have had direct telephone conversations myself. As to the actual transmission of information, whether it was an email or whether it was some other of form of contact with AMSA, I might just ask my colleague Ms Grant to speak—

Senator BRANDIS: Just give us a time line, will you? I assume, of course, that a log is created when these events occur.

Mr Pezzullo : Indeed it is, but we might see if Ms Grant has anything to add.

Senator BRANDIS: Can that log be produced please? If the log contains intelligence or other material that is not appropriate to be put on the public record, can an appropriately redacted version of the log be produced?

Ms Grant : The usual procedure in these situations is that we will telephone answer and we will email answer with information as soon as it comes to hand that there is possibly a vessel in distress, which is what occurred on the day that we are referring to here.

Senator BRANDIS: Whose call was that? Was it yours, Mr Pezzullo? You said you were—

Mr Pezzullo : No.

Senator BRANDIS: Whose call was it? Yours, Ms Grant?

Ms Grant : The call comes through our 24/7 watch floor in the Border Protection Command, so the Australian Maritime Security Operations Centre operations officers get this information and they have the standing communication channels established with their counterparts in the rescue coordination centre of AMSA.

Senator BRANDIS: So it is the person who is in charge on the shift at that particular time who makes the call to send an urgent message to AMSA?

Ms Grant : The officer in that area needs to be notified. If the information comes in through, say, our intelligence side of the business, our intel part of the business will inform the operations floor so they can immediately pass that information to AMSA.

Senator BRANDIS: I understand that. I am just trying to get the sequence right. There must be a person whose task it is in circumstances like these to make a call—in other words, to conclude that there is a sufficiently serious or grave situation that AMSA should be contacted. Who was that person on this particular occasion?

Ms Grant : I would have to take the name on notice to get exactly the position—

Senator BRANDIS: That is fine; you do that, Ms Grant. But it is one individual, isn't it? It is not as though you have a committee meeting to assess real-time intelligence. A particular person has to take responsibility for making the call, don't they?

Ms Grant : Yes, that is what happens. Once the intelligence office receives that information, if there is any suggestion that there is a vessel in distress, an intelligence officer will not waste time assessing it. They will deal with the seriousness of that information and immediately hand it on, especially if there are coordinates that give a location.

Senator BRANDIS: Is that intelligence officer the person who makes the contact with AMSA, or does that officer convey an urgent message to another person who conveys it to AMSA?

Ms Grant : The intelligence officer conveys it to our watch-keeping area of the Border Protection Command, which has established protocols with AMSA for relaying this information.

Senator BRANDIS: As you said before—or perhaps it was Mr Pezzullo—a log is kept. That log would tell us how many hours or minutes—or even seconds potentially—elapsed between the making of the call or the declaration that there may be a distress situation, to conveying it to the watch-keeping officer and the watch-keeping officer conveying the message to AMSA and AMSA in its turn conveying the message, as in a case like this, to the Indonesian search and rescue authorities.

Ms Grant : The log, in the terms you are probably envisaging, is kept in the Border Protection Command, so they would log in the time they receive the information from the intelligence officer, and they would log the time they made the call to AMSA. Once it gets to AMSA, they have their own log records.

Senator BRANDIS: Of course, and we can ask AMSA that in another committee. Can those sections of the log from the time the call was made that there was possibly a vessel in distress to the time at which AMSA was contacted—can those parts of the log be produced, please?

Ms Grant : We can certainly take it on notice to produce a declassified version.

Mr Carmody : While we are doing that, can I just confirm that we flew on 3 October and then again on 5 October.

Senator WRIGHT: Is it possible to know the period of time over which the flights occurred?

Mr Carmody : They occurred one each of those days. We can find out the flying time, but that would include the flying time there and around—

Senator WRIGHT: That is what I would like to know—in a sense, the scope of the surveillance.

Mr Carmody : We will provide whatever we can, but they were the days—two hours on the first and seven hours on the second.

Senator BRANDIS: In fact, the day on which the call to AMSA was made was 3 October, wasn't it?

Mr Carmody : Yes.

Senator HUMPHRIES: I asked questions of AMSA this afternoon about this particular boat, and AMSA advised the rural affairs committee that the communication from Customs and Border Protection with respect to this boat was not a phone call but an email sent at 3.30 pm on 3 October and that there was no other communication. Is that likely to be the case, as far as you are concerned?

Ms Grant : Yes, that could well be the case. We usually would make a phone call and send an email, but if an email is sent there does not have to be a phone call; there is no protocol that says it will be both. But common practices suggests—I accept that AMSA records they had the email and not a phone call.

Senator BRANDIS: You said that there had been aerial surveillance on—was it the 5th, did you say, Mr Carmody?

Mr Carmody : It was 3 October and 5 October.

Senator BRANDIS: And that aerial surveillance would have been focused on the coordinates of the vessel, of course?

Mr Carmody : The broad area that those coordinates indicated. They were not precise coordinates, as Mr Pezzullo has already mentioned.

Senator BRANDIS: I understand that. My point is that you were not searching the whole of the Arafura or the Timor Sea. You knew where to look for this vessel.

Mr Carmody : We might have been on the day but this particular flight was directed because of that incident.

Senator BRANDIS: Because of that incident, you knew where to look, you sent the surveillance flights and the surveillance flights could not find anything.

Mr Carmody : That is correct.

Senator BRANDIS: Approximately how far from the nearest coastline were the coordinates?

Mr Carmody : I am not sure I can answer that precisely. My understanding of the coordinates, as Mr Pezzullo has indicated—and I do not understand these terms—was that the last figure on the coordinates, which is the seconds, was not included. That means it was quite a sizeable box, a large area.

Senator BRANDIS: How many square kilometres?

Mr Carmody : We would have to take that on notice. I do not have that detail here.

Senator BRANDIS: It amounts to this: you were sufficiently concerned that the vessel was in distress to send a message to AMSA; and you were sufficiently concerned that you commissioned two special surveillance flights to overfly the coordinates that you had. There is no evidence whatsoever that the vessel either returned to Indonesian shores or indeed anywhere else. It just disappeared.

Mr Carmody : The point is we do not know. We did everything in our endeavours to follow up on the leads. But the bottom line, as far as I am aware, is that we do not know.

Senator BRANDIS: I am not for a moment suggesting that you did not do everything that you could have done. But if you had a sufficient level of concern that the vessel was in distress to initiate the steps that have been described, and there is no evidence whatsoever that the vessel returned to Indonesia, and it was never found, and there was no retrospective evidence from any of the relatives or your other interlocutors that the people who were believed to be on the vessel showed up later, that invites the likely conclusion that the vessel sank, doesn't it?

Mr Carmody : That is one conclusion. But, as I say, we are not in a position to know. I do not think it is appropriate for me to hazard guesses.

Senator BRANDIS: I am not asking you to hazard a guess, either. If you eliminate all the possibilities consistent with the vessel not having sunk and the vessel was never found then that invites the conclusion that the vessel sank, doesn't it? You cannot be sure, of course. You cannot be absolutely certain.

Mr Carmody : I cannot answer the question as to what happened to the vessel.

CHAIR: Just to let the officers know, we are going to keep going with Customs until at least in the time.

Senator BRANDIS: One last thing on the 3 October 2010 incident, on what basis do you conclude that there were the 105 or 107 Hazaras on this vessel?

Mr Carmody : You will need to help me, Senator, as to whether we have—I am concerned about talking about intelligence sources and others. I am interested in whether we have publicly stated that there was 105. And if we have not—

Senator BRANDIS: I am referring to letters from Mr O'Connor to Mr Michael Keenan of 29 September 2011 and 17 October 2011—that is this morning.

Mr Carmody : Is that saying we said that or there are media reports, because the question itself talks about media reports of 105?

Senator BRANDIS: I am informed, and I cannot go further than that, that what that correspondence establishes is that there was a view that there were approximately 105 Hazaras on the 3 October vessel.

Mr Carmody : I am certainly aware of media reports but again we have already indicated we had intelligence that a vessel had gone but I am wary of going any further on the nature—

Senator BRANDIS: Let us put it to you directly: is it the view of Customs that the vessel contained Hazara asylum seekers?

Mr Pezzullo : It is very difficult to answer that question directly because of the question of intelligence sources and methods—

Senator BRANDIS: I am not asking about the methods.

Mr Pezzullo : I know, Senator, but for me to answer that question directly would reveal, betray, expose a degree of intimate knowledge of who got on the vessel, how many people got on it and who organised it. I have seen media reports generated by whatever means that there were Hazara on the boat and I have seen media reports that 105 persons embarked on the vessel. That much I am happy to say; I have seen those media reports. As to what I can confirm or any other officer in this room based on their reading of classified information, it is something that I cannot comment on.

Senator BRANDIS: All right. Mr Pezzulo, do you dispute those media reports?

Mr Pezzullo : I am not in a position to either confirm them or deny them.

Senator BRANDIS: Thank you. Let us turn to the November 2010 vessel. You have seen reports that a vessel left Indonesia bound for Australia on or about 13 November 2010?

Mr Pezzullo : Yes.

Senator BRANDIS: In answer to a question taken on notice by the Department of Immigration and Citizenship that department confirmed that it received several inquiries from relatives who were on this boat who had not heard from their relatives since they left Indonesia on 13 November 2010. At what time did the Customs and Border Protection Service receive any information about a vessel answering that description being in distress?

Mr Pezzullo : The best way for me to answer that question is as follows: it is a circumstance quite unlike what we have in shorthand referred to as 'the October 2009 vessel'. We had no—and to this day have no—contemporaneous information along the lines that we have been discussing: the vessel has departed, gets into distress, may or may not come out of distress.

Senator BRANDIS: May or may not sink.

Mr Pezzullo : Indeed. The first we became aware of claims that a number of people—the original media reports, as I recall them, were in the order of about 97 persons—had left on or about that date in November was when the media started reporting that fact based, in turn, on claims from family members, as you have just indicated, in December 2010.

Senator BRANDIS: What date in December?

Mr Pezzullo : As I recall, I think we provided a statement to the relevant newspaper on 26 December. I think they might have run an article either that day or the following day.

Senator BRANDIS: So if the November vessel, if we can call it that for short, got into distress, that was something you did not know about until weeks later?

Mr Pezzullo : Until family members started coming forward when, as you have heard in the earlier evidence, DIAC started receiving certain representations.

Senator BRANDIS: When did DIAC first apprise you of those representations?

Mr Carmody : Wasn't it 4 January? No, hang on—I believe it was 4 January.

Senator BRANDIS: So there was no reference to you about this supposed November vessel before 4 January and you had no reason to have any knowledge of it?

Mr Pezzullo : Other than the previously stated media reports. There was one, I think, on Boxing Day and I think the same journalist also ran a media report on New Year's Eve, as I recall it.

Senator BRANDIS: So as you rightly say, Mr Pezzulo, it is not like the October vessel where you had real-time knowledge or belief of a situation concerning the vessel?

Mr Pezzullo : No contemporaneous view.

Senator BRANDIS: Notwithstanding that you had no contemporaneous or real-time knowledge, did you on the basis of those references and retrospective reports, if I can so describe them, conduct an inquiry?

Mr Pezzullo : Senator, in that case the answer is no. It is again quite unlike the October 2009 situation because we did not have holdings. However, before we went back to the journalist in question that I have referred to, I did ask the question of the same team: 'Do we have anything that matches the description, anything in our contemporaneous holdings?' I had sufficient confidence based on their response to me that we were in a position to say on 26 December to the journalist, 'We had no information on that vessel.'

Senator BRANDIS: Has any more information come into your hands since then in relation to the vessel—or the putative vessel, I should say?

Mr Pezzullo : As Deputy Commissioner Colvin said in his responses to the same line of questioning, they have received certain information and they have conducted certain inquiries. I have been made privy to their work in that field so, in terms of information that has come to our attention, it has been through that means.

Senator BRANDIS: Minister O'Connor in his letter to Mr Keenan this morning says, referring to these inquiries forwarded from DIAC:

All four of the inquiries were forwarded by DIAC to the Australian Customs and Border Protection Service on 4 January 2010.

Did the matter go no further from you receiving those inquiries that the minister mentions in his letter?

Mr Pezzullo : In terms of our remit as it were, because we are not dealing with a real-time safety of life at sea situation, it is quite different from the October 2009 vessel.

Senator BRANDIS: No, I understand.

Mr Pezzullo : We do of course from an intelligence point of view try to come to an understanding—and these reports are relevant to that process—of did a vessel ever leave? Because for us in terms of the intelligence pattern, are there organisers who are sending vessels that we have missed, as it were?

Senator BRANDIS: So you did that?

Mr Pezzullo : From that point of view.

Senator BRANDIS: You asked yourself that question, if I can put it like that, and what conclusion did you arrive at?

Mr Pezzullo : On or about 4 January or subsequently?

Senator BRANDIS: Whenever. I am assuming that the inquiries or the appraisal that you have just described happened after 4 January.

Mr Carmody : Mr Pezzulo indicated in response to an earlier question that, at the time it was raised, he checked with our intelligence people and we were unable to identify any such vessel.

Senator BRANDIS: I heard him say that, but then he went on to say that you did ask yourselves the question: did a vessel ever leave? Well, what was the answer? Did you reach a conclusion?

Mr Pezzullo : The only conclusion that we continue to provisionally hold is the same conclusion that Deputy Commissioner Colvin gave in his evidence that we just do not have enough information to categorically be able to state the position one way or another.

Mr Carmody : We did not conduct—

Senator BRANDIS: If I may say with all due respect, there seemed to be an unnecessarily large number of qualifications in that answer. Nobody is suggesting—I certainly am not—that you could have had a categorical view of such an intrinsically uncertain possible event. So I am not asking if you had a categorical view, but you yourself have used the expression 'a provisional conclusion'.

Mr Carmody : I think we need to understand what has been pointed out by Mr Pezzulo that this is a very different occasion—

Senator BRANDIS: Yes, I understand that.

Mr Carmody : And in terms of our responsibilities, Mr Pezzulo asked at the time whether there was any such intelligence and there was none. But in a full sense of investigation of the claims that continued to be made, and we only received one call, from memory, from a family member—

Senator BRANDIS: And then you had four matters referred to you by DIAC?

Mr Carmody : Well, they alerted us to it. But in terms of the investigation, given that this was not an arriving vessel and we are not a safety but we do get involved in safety issues when it happens, that was our responsibility. It was the AFP who conducted the investigation into this. They are the only people who could give any sort of considered answer to this.

Senator BRANDIS: I asked some questions about it to the AFP, and they said that I should ask you—

Mr Carmody : I think they gave you the answer as to what they concluded.

Senator BRANDIS: Yes, they did.

Mr Carmody : What I am telling you is that, while generally we have a role in interception of vessels, I have explained our responsibilities in this case and the agency that took on the investigation of this matter was the AFP. They have told you what they were able to tell you.

Senator BRANDIS: They have. And Mr Pezzulo told me that you asked yourself the question, 'Did a vessel leave?' All I want to know, allowing for the fact that any conclusions you may have reached in addressing that question would be highly tentative or highly provisional, what was the conclusion you reached—just state it in your own words, would you?

Mr Pezzullo : I am happy to state in my own words that I don't have enough information. I don't know.

Senator BRANDIS: So your conclusion, having asked yourselves the question, 'Did a vessel leave?' that it was impossible for you to answer that question to any meaningful standard or threshold of probability. Is that what it amounts to?

Mr Pezzullo : Yes, it is not possible for me to state whether a vessel did or did not leave.

Senator BRANDIS: That is fine. Now back to the broader issue of border protection. Could you confirm some figures for me, would you please, Mr Carmody. Am I right in understanding that, as of perhaps yesterday when Mr Keenan's office helpfully put together this brief for me, since August 2008 when the Rudd government changed the policy there have been 12,592 unauthorised boat arrivals in Australia on 245 boats, not including the boats that may have sunk; is that right?

Mr Carmody : Senator, we have been through this a couple of times each time we have been here.

Senator BRANDIS: Well it is very important that the public know because this is an issue of public interest, as you know, Mr Carmody.

Mr Carmody : I think my answer will be the same. I have figures on a calendar year—

Senator BRANDIS: Don't disappoint me now, Mr Carmody.

Mr Carmody : I am going to give you the same answer I gave you last time—

Senator BRANDIS: Since we go through this at every estimates, there is absolutely no reason for not having the answer. What are the figures?

Mr Carmody : I have calendar year figures, and we can give you those, if you like.

Senator BRANDIS: If you can read the calendar year figures into the record and then I will ask you for the monthly figures up to October this year.

Mr Carmody : I do not have them by month but the total figure as at this calendar year is 2,572.

Senator BRANDIS: So it is 2,572 in this calendar year up to what day?

Mr Carmody : It was as of yesterday.

Senator BRANDIS: As at yesterday, that is fine, good. So there were 2,572 in 2011 as at yesterday. How many vessels is that?

Mr Carmody : That is 42 vessels.

Senator BRANDIS: For completeness, can you give us the figures both of individuals and of vessels for calendar year 2010?

Mr Carmody : There were 134 vessels with 6,555 individuals. The figure excludes crew.

Senator BRANDIS: How many were there in 2009?

Mr Carmody : There were 60 vessels with 2,726 individuals.

Senator BRANDIS: How many were there in 2008?

Mr Carmody : There were seven vessels with 161 individuals.

Senator BRANDIS: Of those seven vessels and 161 people, how many of them were post August of 2008?

Mr Carmody : I am sorry to disappoint you but I do not know.

Senator BRANDIS: Mr Pezzullo seems to know.

Mr Carmody : He has better information than me. It is good to have competent deputies. In 2008 there were seven vessels and 161 people from September to December.

Senator BRANDIS: Does that mean there were zero between January and September?

Mr Carmody : According to this sheet, yes.

Senator BRANDIS: That is interesting. You said all of those figures exclude crew.

Mr Carmody : That is my understanding, yes.

Senator BRANDIS: What is the total number of full-time equivalent staff currently employed by Customs?

Mr Groves : For the month of September, our average paid FTE was 5,194.

Senator BRANDIS: In the PBS table 2.1, the average staffing level in 2010-11 is given at 5,250, which is a reduction of 500 from the previous year. Are you familiar with that?

Mr Groves : Could you repeat that?

Senator BRANDIS: I am going from the PBS for your agency, page 122, table 2.1. The last line item, the average staffing level number for 2010-11, is given as 5,250, which is a reduction of 250 on the previous year according to this table.

Mr Groves : That is correct in the 2010-11 PBS if that is what you are reading from.

Senator BRANDIS: As of today, what is it?

Mr Groves : It was 5,194 for September.

Senator BRANDIS: How many of those staff positions are located within Border Protection Command?

Mr Groves : I do not have the number for September. As at August there were 92.8. That was for July and August of this financial year.

Senator BRANDIS: I am sorry. I cannot understand that. I just want to know what the most recent number you have is. So there were 92.8 FTE positions as at August. Is that right?

Mr Groves : That is correct.

Senator BRANDIS: How does that compare with 12 months previously? If it is easier for you, take it as at 30 June 2010.

Mr Groves : Most of those numbers reflect the average over the years. I can certainly give you the figure for Border Protection Command for 2010-11. The average was 98.8.

Senator BRANDIS: So the average in 2010-11 was 98.8 but as at August it was 92.8. So there were six fewer FTE positions.

Mr Carmody : Just to state the obvious, I think there are times when there are vacancies and those numbers fluctuate.

Senator BRANDIS: What about the average in 2009-10?

Mr Groves : In 2009-10 it was 96.4.

Senator BRANDIS: And 2008-09?

Mr Groves : It was 91.3.

Senator BRANDIS: And 2007-8?

Mr Groves : I do not have that.

Senator BRANDIS: How many customs officers are currently employed on Christmas Island?

Ms Grant : The advice is that we have three full-time customs officers and nine acting officers of customs on Christmas Island. I think that we have provided that information in a question on notice from the previous hearings.

Senator BRANDIS: Has that number increased or changed in the last four months?

Ms Grant : No, that number is the same as it has been for some time now.

Senator BRANDIS: When boat crew are taken to court on people-smuggling charges at various places, are border protection officers usually required to give evidence?

Ms Grant : We run our operations through the Border Protection Command. All of our customs officers who are the customs crew on board our vessels are housed in our Maritime Operations Support Division, so we did not actually give you those figures when you were asking for numbers earlier. There are close to 400 people who work on our vessels and who are housed outside the Border Protection Command. When they are going to undertake operations they are assigned to the Border Protection Command and a vessel and its crew go into Border Protection Command.

Senator BRANDIS: Let me get this straight: of the 92.8 positions that your colleague gave me for August, that excludes all the crews on border protection vessels?

Ms Grant : That is right.

Mr Carmody : Yes.

Senator BRANDIS: But for some purposes those crews are included in those figures—is that right?

Ms Grant : No, just for accounting where our staff are. We have the people who work in Border Protection Command Headquarters and that is what is represented by the 92.8 ASL—

Senator BRANDIS: Would all of that 92.8 work at headquarters?

Ms Grant : Yes, they work in our headquarters based in either Canberra, Darwin, or in our regional bases.

Mr Carmody : Perhaps to understand the construct, Border Protection Command is a joint command. It is not just Customs and Border Protection staff; there are also Defence Force staff and representatives from a range of agencies, because it is a joint command. When it comes to crewing, it is a combination of our patrol boats which, as Marion Grant has just explained, we crew up, and then for the command purpose as to what they are assigned to, they move over to border protection for the positioning. There are both Customs and Border Protection assets and Naval assets involved. So when you are looking at Border Protection Command and our operations on patrol and surveillance, it is a combined operation in that way.

Ms Grant : The crews on our vessels do need to prepare witness statements from time to time and they can be called to court to give evidence, as would be the case if it were any sort of breach of our borders.

Senator BRANDIS: Do they ever appear by videolink or do they always have to physically attend a court?

Ms Grant : That would depend on the arrangements of the particular court.

Senator BRANDIS: I understand, but I assume that ordinarily they would be required to attend personally like any other normal witness in court to give their evidence.

Ms Grant : Most courts require personal attendance, but if it does not suit, and particularly in situations where officers are on patrol on vessels and may be at quite a distance from the particular court, in certain circumstances arrangements can be made for videolink or telephone hookup, but it is determined by the individual court.

Senator BRANDIS: I understand. Leaving aside the possibility of telephone or video evidence, what effect does it have on the operation of the vessel when a member or members of the crew have to attend court? Are arrangements made that they are not rostered onto the vessel at that time?

Ms Grant : Yes. If an officer does need to go to court it is a duty day for that officer, but if they cannot be on patrol it is like the absence of an officer for many and varied reasons. Officers go on holidays, officers get sick, officers need to go to training courses, so we accommodate all of these things within our rostering.

Senator BRANDIS: Have ever been any instances of border protection or customs vessels not being able to put to sea or be operational because crew have been required to attend court?

Ms Grant : Not to my knowledge. I cannot recall an occasion when we have had to tie up a vessel because we could not put crew together because they were in court.

Senator BRANDIS: Have any border protection officials take stress leave or had stress related illnesses over the past 12 months and, if so, how many?

Ms Grant : We would need to take that on notice.

Senator BRANDIS: That is fine. Have any customs staff stationed on Christmas Island take stress leave or had stress related illnesses and, if so, how many?

Ms Grant : Likewise, we would need to take that on notice.

Senator BRANDIS: What is the breakdown by APS classification of staff in the Trade Measures Review Branch?

Mr Carmody : Can we take that on notice ?

Senator BRANDIS: Yes. For how many years have those staff—that is, the staff in the trade measures review branch—been in (a) the branch, (b) Customs and (c) the Public Service?

Mr Carmody : We will have to take that on notice. It is now the Trade Remedies Branch. Its full title is: International Trade Remedies Branch.

Senator BRANDIS: Turning back to border protection, was Customs one of the agencies consulted by the government in the development of the so-called Malaysia solution?

Mr Carmody : We would generally be involved in operational issues.

Senator BRANDIS: What operational issues?

Mr Carmody : Our advice on policy matters goes to operational issues.

Senator BRANDIS: The Malaysia solution, as it was described by the government, consisted of sending 800 asylum seekers to Malaysia and taking 4,000 from Malaysia. What operational issues which were directly of concern to Customs would that involve?

Mr Carmody : There were not too many, apart from issues that might go to the response of people when we are intercepting them and so on.

Senator BRANDIS: But that is at an anterior stage of the process to the so-called people swap.

Mr Carmody : Yes. In the past I have sought to make, and it has been accepted, the distinction that we are an operational organisation. I have avoided getting involved in policy debates, and that has been accepted in the past.

Senator BRANDIS: That is probably very wise.

Mr Carmody : Subject to the chair's guidance, I would like to maintain that position, given our role.

Senator BRANDIS: I can understand why you might say that. Do I take it from what you say that when it comes to the design or the architecture of these high-concept ideas like the East Timor solution or the Malaysia solution, your agency has not had any direct input at that policy design level?

Mr Carmody : We are involved on the Border Protection Taskforce, where a range of issues like that are discussed, but we are not the primary policy agency and, as I said, being an operational agency I think it is important that we steer clear of policy and political debates. That has been the position that I have sought to maintain in this committee.

Senator BRANDIS: I know your minister, Minister O'Connor, is not a member of cabinet but was he seconded to the cabinet meeting on Thursday?

Mr Carmody : I do not think it is appropriate to talk about what has happened at cabinet meetings.

Senator BRANDIS: Do you know, Senator Ludwig? You were there.

Senator Ludwig: I am not going to talk about cabinet matters.

Senator BRANDIS: No, I am not asking you to talk about what was said. I am merely asking—

Senator Ludwig: I know what you are asking—

Senator BRANDIS: whether a particular individual was seconded to cabinet.

Senator Ludwig: I know what you are asking and I am not answering it.

Senator BRANDIS: All right.

CHAIR: Senator Brandis, Senator Xenophon has about five minutes of questions. Do you want to go right through to dinner?

Senator BRANDIS: We finish at 6.30? I think it might be best if I get through as much of this as I can.

CHAIR: All right. We will see you back at eight o'clock, then, Senator Xenophon.

Senator BRANDIS: Did your agency contribute to the government's thinking in its decision on Thursday to re-embrace onshore processing?

Mr Carmody : We did not give direct—I am just trying to steer clear of us being involved in any policy debate—

Senator BRANDIS: I am not trying to ensnare you in the political shoals here, Mr Carmody!

Mr Carmody : and, unless the chair tells me otherwise, I believe it is appropriate for our organisation, as an operational agency, not to be involved in these issues.

CHAIR: And I think, Mr Carmody, given the experience we have had with the Australian Federal Police, you are best placed to make those calls, essentially. If you believe that the answers are going to jeopardise your operational activities in some way, I think it is best you make that call.

Mr Carmody : I am not saying it would jeopardise specific operational issues. I am saying that I have indicated that we are involved in forums where matters are discussed, but I believe it is important for our agency as an operational agency not to inject itself into public questions of policy and policy debate.

Senator BRANDIS: That is fine, Mr Carmody. I think it is reasonably well established in these committees that one can ask whether advice was given but one cannot ask what the advice was. Now, my question to you is the first—whether you gave any advice on that issue, not what the advice was—and I take it from what you said a moment ago that the answer to that question is no.

Mr Carmody : Well, I cannot think of direct advice on that. There may be advice on operational consequences or the impacts of that position. That would be, to the best of my knowledge, the sort of thing that we would be involved in.

Senator BRANDIS: Given the government has had more positions on this than the Kama Sutra in the last little while, it is a matter of fascination to find out what the various tributary sources of advice were that have informed the government's multiple positions.

Mr Carmody : As I have said, we often get involved in—

CHAIR: Senator Brandis, if you have questions, let us have them, rather than some commentary.

Mr Carmody : providing operational consequences and the like. We are involved in forums where these matters are discussed.

Senator BRANDIS: Sure. I will move on. Has there been any revision to Customs' budget for the interception and surveillance of unauthorised boat arrivals?

Mr Carmody : There were some surveillance savings but they were primarily in the south, not the high-threat people-smuggling zone.

Senator BRANDIS: If I can take you to Budget Paper No. 2, the budget measures statement, starting at page 95—do you have a copy of Budget Paper No. 2 there?

Mr Carmody : I do not have it here.

Senator BRANDIS: You do or you do not?

Mr Carmody : It is coming.

Senator BRANDIS: That is like mother's milk in these proceedings, Mr Carmody, Budget Paper No. 2! Starting at page 95, there are measures—well, the first one does not seem to amount to much; it is the extension of the lease of the Triton.

Mr Carmody : Yes, there are a number of measures that were continued.

Senator BRANDIS: On page 96, there is a reduction of $20.8 million over the forward estimates in your aerial surveillance activities.

Mr Carmody : Yes, I think I indicated that was the Dornier aircraft and that the flying was not in the high-threat people-smuggling zones.

Senator BRANDIS: All right. The third item on page 96 is a 'counter people smuggling communications campaign' allocation of $3 million. What does that involve?

Mr Carmody : We had funding that terminated at 2011-12, and this introduced some ongoing funding that enables us to work through agencies in other countries to provide communications—for example, about the dangers of travelling on vessels and other issues to do with maritime people-smuggling ventures.

Senator BRANDIS: Then, at the foot of page 97, there is a measure called 'Border Security—maintaining increased aerial surveillance of Australia's northern waters', which is for $15.3 million over two years. So we are saving $20.8 million on aerial surveillance in one budget measure and increasing it by $15.3 million in another budget measure? How do you explain that?

Mr Carmody : As I explained, they are flying in different areas.

Senator BRANDIS: So this is a reconfiguration of aerial surveillance assets, is it?

Mr Carmody : On the measure you just referred to, you would be familiar with terminating measures.

Senator BRANDIS: Yes, I am familiar with them.

Mr Carmody : There had been in previous years increased aerial surveillance in the northern area. That measure terminated. This was a two-year injection of funds to maintain that.

Senator BRANDIS: Then, on page 98, we see a two-year measure of $1.5 million for 'post-interdiction management of suspected irregular entry vessels'. They used to be called 'illegal'; now they are called 'irregular'.

Mr Carmody : Yes.

Senator BRANDIS: What does that involve? It involves keeping these vessels wharfed and ultimately destroying them, doesn't it?

Mr Carmody : This actually reflects a saving on past measures. It had to do with provision of towing for vessels. It is a savings measure, because our experience demonstrated that a large number of these vessels just were not suitable to be towed. They were destroyed, and therefore we did not need the level of funding that had previously been provided.

Senator BRANDIS: Ultimately they are all destroyed, aren't they?

Mr Carmody : Yes, but the particular measure that was in there—and this is a saving on that measure—was to provide for potential contracted towing of vessels. That depends on the number that are in such a condition that they are not destroyed at the time.

Senator BRANDIS: I understand. Finally, there are two measures for overseas resources: the budget measure at the foot of page 98 and the next one, on page 99. The first of them is your agency's overseas engagement.

Mr Carmody : Yes, and the second is Attorney-General's.

Senator BRANDIS: The second is an allocation to the Attorney-General's Department, but in respect of people smuggling as well. What does the first reflect? It presumably reflects the increase in the activity of Customs in its cooperation with overseas partners in interdiction.

Mr Carmody : Yes. Again, it is a terminating measure; it terminated in 2010-11. The 2011-12 and 2012-13 figures are for our representation overseas.

Senator BRANDIS: Has Customs requested additional resources from the government in view of the statements that you have heard—and that we have all heard—from the Prime Minister and Mr Bowen in recent days that there will be, in view of the adoption of onshore processing, a significant increase in the number of unauthorised boat arrivals?

Mr Carmody : I do not think it is appropriate for me to talk about what might be under consideration by government in response to that.

Senator BRANDIS: You have heard what the Prime Minister had to say in her press conference with Mr Bowen last Thursday night.

Mr Carmody : I did, and the Prime Minister indicated that one of the important measures that would continue would be overseas disruption activity and intelligence services. That goes much wider than us.

Senator BRANDIS: Of course.

Mr Carmody : As to what government is considering or not considering, it is not appropriate for me to talk about it.

Senator BRANDIS: But presumably, if the Prime Minister's prediction were to be true, you will need additional resources to do your job.

Mr Carmody : It is not for me to talk about what we might ask for. We have our surveillance assets. We have our patrol assets. We have our intelligence capability. We will continue to employ them.

Senator BRANDIS: Perhaps I can ask you a different question. If the Prime Minister's prediction at her press conference last Thursday of the effect of the government adopting a policy of onshore processing is correct, that is, the number of unauthorised arrivals on a monthly basis increases as she has predicted it will, will you be able, within your existing resources and your existing budget allocation for the current financial year, to deal with that substantial increase in the number of unauthorised arrivals?

Mr Carmody : As I have indicated, we have patrol assets and we have surveillance assets; they will be deployed to meet whatever situations arise.

Senator BRANDIS: If the Prime Minister's prediction is right will they be enough?

Mr Carmody : I do not think it is appropriate for me to give advice on what might or might not be appropriate for the government to do. But I can tell you that we will deploy those assets to continue what has been a very high rate of success in intercepting these vessels, and I would expect that rate of success to continue.

Senator BRANDIS: Let me put it to you this way: prior to the government's policy change, were your surveillance and interception assets deployed to full capacity?

Mr Carmody : They were deployed to the capacity of the resources we are provided with and they have achieved a very high success rate in interception. I would expect that to continue.

Senator BRANDIS: Were they deployed to full capacity?

Mr Carmody : They were deployed to the extent we are funded to provide surveillance and control.

Senator BRANDIS: I think you are making yourself clear enough. Can you please provide us with a brief account of the number of aircraft and the number of hours per month allocated for aerial surveillance for respectively Australia's northern and southern waters.

Mr Carmody : I just need to be perfectly accurate in my previous answer. When our annual report comes out, there will be slight variances between assets being overused and some being underused, but it is not hugely material. Our annual report will show that. Marion, do you have anything else?

Ms Grant : We have Dash 8 aircraft under a contract that Customs and Border Protection Service has with the provider of those Dash 8. We also have some of the RAAF P3 surveillance aircraft made available to Border Protection Command. We do not run on an hourly basis. We tend to measure our efforts by the area of surveillance that we undertake. So for the 2010-11 financial year we achieved slightly more aerial surveillance than our portfolio budget statements target due to, I think, the increased hours we got out of the RAAF aircraft in particular.

Senator BRANDIS: You did not extend your own surveillance activity with your Dash 8s; you asked the Air Force for additional surveillance. Is that what it amounts to?

Ms Grant : We did not ask the Air Force for additional surveillance. As part of the defence contribution to the Border Protection Command they make a certain amount of their aircraft available. It is really based on the risk assessment of where we need to fly. That determines which particular aircraft will operate in particular geographic areas. Due to some of the longer distance flying out to, say, Christmas Island, we have achieved some greater surveillance coverage by using the RAAF aircraft in those locations. It is not a case of how many hours we had and what we can achieve from the hours; it is a case of the coverage—

Senator BRANDIS: Let me just ask you this: were the number of hours of aerial surveillance conducted in 2010-11 by the aggregate of the Customs Dash 8 aircraft and the RAAF assets greater or less than in the previous year?

Ms Grant : In terms of hours, I would need to take that on notice.

Senator BRANDIS: Do you know?

Ms Grant : No, I do not know because we do not record our results in terms of hours. We record our results—

Senator BRANDIS: What is your benchmark measurement then? If it is not hours of surveillance, what is your benchmark measurement?

Ms Grant : It is the area of surveillance coverage we achieve, how many million square nautical miles we cover in the areas of interest—

Senator BRANDIS: I am sorry, Ms Grant; perhaps I am being a bit slow here but that does not make a lot of sense to me, because if you achieve the coverage of a large area but you do not do it as often as you might have done in a previous year, that is a less thorough surveillance, even though you might be covering a larger area. Surely the frequency is at least as important a variable in this as the area.

Mr Carmody : It is a cumulative area, isn't it? It is not just a single area—

Ms Grant : We may be talking at cross-purposes—

Senator BRANDIS: Maybe we are.

Ms Grant : We do not think that counting the hours that we fly is a very good indicator of how successful our efforts are, because you could be flying a lot of hours over areas that are not of interest to us.

Senator BRANDIS: That is my point. There are two variables here, aren't there? There is the area under surveillance and the frequency of the surveillance.

Ms Grant : When you say 'the frequency of surveillance', what do you mean by that?

Senator BRANDIS: What I mean is how frequently a given area is surveilled.

Ms Grant : We have aircraft up every day. A flight will depend on the situation with the aircraft. A typical flight could be an eight-hour flight and during that eight hours a certain area of surveillance will be achieved. We have a statistical recording system that logs every flight—exactly where it flew—and accumulates.

Senator BRANDIS: I do not think this should be as hard as perhaps I am making it. I want, according to your benchmark, a comparison—comparing like with like—as to whether there was more or less aerial surveillance in 2010-11 than in 2009-10. Whatever the benchmark or the yardstick is, I just want to know whether you undertook more aerial surveillance last year than in the previous year.

Mr Carmody : I think Ms Grant has already answered that, if you go back to the point before—and I am sure she will correct me if I am wrong—when she indicated our benchmark of square nautical miles. I should point out that that is not static. It is not just a case of looking at the map and saying, 'Well, there's that many square nautical miles.' It is the number of times you fly over that adds to the square nautical miles coverage, so it is a cumulative total, to address the point you were making earlier. I think Ms Grant has already indicated that, because of the composition of that flying, particularly the long-haul flights to Christmas Island—you would be aware of the tragedy there and some of the increased flying—the overall cumulative square nautical miles covered were increased.

Ms Grant : I can confirm that the million square nautical miles that we flew in 2010-11 was more than we flew in 2009-10.

Senator BRANDIS: Do you have those figures in front of you? Could you read them onto the record for me?

Ms Grant : We achieved 147.76 million square nautical miles in the 2010-11 year which exceeded the PBS target by 2.7 6 million, the target being 145. I do not have with me the exact number of hours for the 2009-10 year but I do recall that we came in slightly under target for last year so that is why I can say that 2010-11 was greater than 2009-10, but I would need to take on notice to provide you with the precise number four 2009-10.

Senator BRANDIS: Could you do that for me please? I will put any further questions for Customs on notice.

CHAIR: Except I cannot release you. I am sorry, Senator Xenophon has questions and to accommodate Senator Brandis prior to dinner we indicated to Senator Xenophon to come back after dinner.

Mr Carmody : Is it possible to get an idea of Senator Xenophon's area of topic so I can let a number of my officers enjoy their dinner?

CHAIR: I do not know. We probably cannot answer that unless we track him down. Before we break for dinner I need to let people from ACLEI, the Australian Commission for Law Enforcement Integrity, know that we do not need you at all. I am sorry to have kept you waiting all day but as senators firm up their area of questioning we can firm up who we need and do not need so ACLEI officers are free to go. I am sorry, Customs, but you will need to come back.

Proceedings suspended from 18:36 to 20:05

CHAIR: We will formally reconvene. We have Customs and Border Protection with us and we will start with Senator Xenophon.

Senator XENOPHON: Mr Carmody, it may not surprise you to hear that I will be asking you some questions relating to Mr Kessing's case, and I will continue asking questions about Mr Kessing's case for the next, I think, eight estimates that, health permitting, I will be here for.

Mr Carmody : Eight? I had better count how many I will be here for, Senator!

Senator XENOPHON: It is only going to get worse! I just want to go to a couple of issues. Firstly, Mr Kessing wrote, through my office, on 12 August a letter of response to Mr Coles at the Attorney-General's Department in relation to his application for a pardon under the royal prerogative of mercy. We know from the evidence given earlier today during my questioning of the AFP commissioner that the AFP was provided with a copy of that letter of 12 August, presumably in order to comment on it for the Attorney-General's office to consider. Can you advise whether Customs received that letter or whether there have been any communications with the Attorney-General's Department in relation to Mr Kessing's application for a pardon.

Mr Carmody : We are not aware of any. We will correct that if it is the case but on the material we have we are not aware of having received that.

Senator XENOPHON: Could you double-check that.

Mr Carmody : I will double-check it, of course.

Senator XENOPHON: That does surprise me, because a letter from the Commonwealth Director of Public Prosecutions dated 17 May 2010 to the Attorney-General's Department set out reasons why Mr Kessing should not receive a pardon. One of those reasons set out in terms of so-called circumstantial evidence was that Mr Kessing was:

… a disgruntled employee of the Australian Customs Service and therefore had a motive to seek to embarrass the Australian Customs Service or to publicly expose what he perceived as the Australian Customs Service's inaction regarding the subject matter of the reports by leaking the reports to the media.

Presumably the conclusion that Mr Kessing was a disgruntled employee would have been something that would have come from his employer, namely, the Australian Customs Service.

Mr Carmody : I cannot comment on that. That is not something I am aware of.

Senator XENOPHON: Could you take it on notice.

Mr Carmody : Absolutely.

Senator XENOPHON: That is something that would be within your knowledge, presumably.

Mr Carmody : Sorry, yes, I was just saying that I do not have that information with me at the moment. I am more than happy to take it on notice and clarify.

Senator XENOPHON: In the context of that response, my understanding is that Mr Kessing retired from the Australian Customs Service because of the terminal illness of his mother in early 2005 but that in 2004 he was on more than one occasion offered a promotion within the Customs Service. How do you reconcile a person who is offered a promotion being described as a disgruntled employee? In other words, this is one of the factors that led to there being a circumstantial case against Mr Kessing.

Mr Carmody : I do not want to go to the substance of whether that goes to the case, but I will have to—

Senator XENOPHON: I am sorry, Mr Carmody, but it does go to the case. The letter from the Commonwealth Director of Public Prosecutions dated 17 May 2010 sets out what they perceive to be the evidence establishing Mr Kessing's guilt. There were a number of matters, one of them being that he was a disgruntled employee. That is something that presumably would have come from the Australian Customs Service.

Mr Carmody : I cannot be certain of the basis of this claim. I do not want to speculate. It could be a claim by him. I just do not know, but I will verify—

Senator XENOPHON: No, Mr Kessing was not claiming that he was a disgruntled employee. This was an assertion made by the Commonwealth DPP.

Mr Carmody : Okay.

Senator XENOPHON: To what extent was the assertion from the Commonwealth DPP that he was a disgruntled employee founded in any material provided by the Australian Customs Service?

Mr Carmody : I will provide that to you on notice, Senator.

Senator XENOPHON: Can I just go to a letter from the region again—I am happy for you to provide this on notice. The regional director of Customs for New South Wales on 13 May 2005 sent an email to Mr Kessing's supervisor, Ms Catarina Magni, which in summary says, 'What do you know about reports that have been prepared about security at Sydney airport?'—regarding the security issues, presumably they are the reports that Mr Kessing prepared back in 2003-04. There was a response from Ms Magni on 16 May 2011 saying, words to the effect, that, 'Yes, we are aware of these reports and these issues are still pertinent, or the concerns are still valid in terms of the security concerns.' When did the regional director become aware of the reports referred to in his email of 13 May 2005? What was the nature of the regional director's understanding of those reports? How many people within Customs were aware of the reports that Mr Kessing was charged with and later convicted of leaking to the media? And I note that Mr Kessing continues to deny this vehemently. Could you take that on notice as well?

Mr Carmody : I will take that on notice.

Senator XENOPHON: Given that Mr Kessing has sought a petition for the exercise of a prerogative of mercy, do you see it as your role to contact the Attorney-General's office or is this something about which the Attorney-General's office will need to contact you? Mr Wilkins, I think Commissioner Negus earlier said that they had a received a letter on Mr Kessing of August of this year seeking a pardon. I think it is fair to say, Mr Carmody, that he did not receive such a letter, given that the Commonwealth DPP has raised issues in terms of rejecting the pardon in matters that would be directly within the purview of Customs. Can you advise whether Customs was provided with a copy of that letter?

Mr Wilkins : I do not have my hands on all the details, but I might get Iain Anderson to answer that question.

Mr I Anderson : To the extent that the issues canvassed in the 12 August letter were particularly about the impact of obligations of disclosure, that in itself is in the matter that goes to Customs. It is a matter about the AFP and the DPP in terms of disclosure and the impact of the alleged non-disclosure of a document upon the trial. That said, however, we have been in reasonably frequent communication with Customs about the different comments, suggestions and allegations that have been raised in the media as well as by Mr Kessing himself to seek views from Customs about those matters.

Senator XENOPHON: In terms of the pardon application on Mr Kessing, one of the factors that the Commonwealth DPP has raised is that he was 'a disgruntled employee of the ACS and therefore had a motive to seek to embarrass the ACS' et cetera. Is that not something that you would ordinarily seek information from Customs about in terms of considering the broad discretionary issues at stake with a department?

Mr I Anderson : We have been in fairly frequent communication with Customs about the matters that have been put forward by Mr Kessing or in the media accounts as well.

Senator XENOPHON: You have provided a copy of Mr Kessing's application, or his letter, to the AFP?

Mr I Anderson : Absolutely. I cannot say for sure whether the letter of 12 August has been provided to Customs, but we have been in reasonably frequent communication with Customs about the issues that have been raised by Mr Kessing or on his behalf.

Senator XENOPHON: Would it not be reasonable to assume that if you had provided a copy of that letter to the AFP, you would also provide a copy of that letter to Customs?

Mr I Anderson : The issue that was being particularly canvassed at that point about whether something had been disclosed to the defence and the impact of that on the trial was a matter in particular—the disclosure or lack thereof—for the AFP and the DPP. I do not believe that we specifically put that issue of the disclosure by the AFP to Customs because it is a matter for the AFP and for the DPP whether the AFP disclosed the letter and whether the DPP disclosed the letter. Customs had nothing to add to that.

Senator XENOPHON: Mr Carmody, there is an issue about the communications between Zoe Ayliffe, who worked for Customs, and Norm Lipson, a journalist. It appears to be the case that Mr Lipson had told Ms Ayliffe that he had a couple of sources in relation to security breaches at Sydney airport. I take it that is an issue for your colleague to raise?

Mr Carmody : Yes.

Senator XENOPHON: Can you advise whether the information that there were a couple of sources was provided to the AFP?

Mr Pezzullo : The answer to your question is yes.

Senator XENOPHON: Let us make this clear. I did ask questions of this of the commissioner earlier. You are unambiguous that you disclosed to the Federal Police that Mr Lipson had told Ms Ayliffe that he had a couple of sources?

Mr Pezzullo : Yes, and in turn the AFP have advised us, since you raised the matter on 26 May, that they in turn included that information in the brief of evidence that they made available to the Director of Public Prosecutions, who in turn have confirmed to us, in terms of closing off the question that you asked me on 26 May, that that information was in turn provided to Mr Kessing's legal team on 17 October 2006.

Senator XENOPHON: Mr Kessing's legal team said something different in relation to that. They said that they were not given that full information. You are saying that there is a chain of evidence in relation to that?

Mr Pezzullo : To be absolutely comprehensive and complete in my answer to you, on 26 May you asked—and you will recall the exchange that we had across this table—and I undertook to take that very matter on notice. Our inquiries, subsequent to that Senate hearing, which we then responded to in question No. 71, in summary, went to the following points. We made inquiries with the Federal Police, the Commonwealth Director of Public Prosecutions and also officers internal to our service who had assisted in those inquiries in the period of 2005-06. Those inquiries indicated that Ms Ayliffe, the officer that you have named previously in this committee and you have named again this evening, was not interviewed by the AFP in relation to the Kessing matter. The AFP have confirmed that to us. However, a statement by a more senior Customs and Border Protection officer was prepared in 2006 for the purposes of the proceedings against Mr Kessing. The statement described and attached a series of emails. One of the emails had been sent by Mr Lipson, the journalist who you have named, to Ms Ayliffe and another email sent between officers of Customs stated that Mr Lipson had indicated to our agency that he had 'more than one source'. The CDPP has confirmed that that statement, including the attachments I have just described, was provided to Mr Kessing's legal team by the CDPP on 17 October 2006.

Senator XENOPHON: Was that the complete email chain referred to? Is that what you are referring to?

Mr Pezzullo : I have seen a document. There is certainly a series of emails attached to that statement, yes.

Senator XENOPHON: There are no other emails relating to this chain of communication between Mr Lipson and Ms Ayliffe other than those that have been disclosed?

Mr Pezzullo : I have no contemporaneous knowledge of these matters that occurred in 2005-2006. What I have seen is a statement which attach a series of emails that appear to be a chain, but whether there are other emails or gaps in that email chain it is not for me to undertake a forensic evaluation, and I have not done so.

Senator XENOPHON: I will leave it there, thank you.

Mr Carmody : In relation to some questions asked by Senator Abetz, my Chief Finance Officer sent me a text, which I do not fully comprehend, but it will require a clarification of the answers of timing and nature of impairment and we will provide that on notice in response to Senator Abetz.

Senator HUMPHRIES: I want to follow up something. Earlier today, there was reference to the communication that Customs and Border Protection was likely to have sent to AMSA in relation to that boat of October 2009. Is it possible to have that correspondence tabled?

Mr Carmody : We will take that on notice and if it is possible we will provide it.

Senator HUMPHRIES: Thank you.

CHAIR: Mr Carmody, thank you very much for your time this afternoon and this evening. We will see you again in February, if not sooner.

Mr Wilkins : Chair, I have a communication here from the Australian Federal Police and it is asking me to advise this committee that, in relation to Senator Cash's question to the AFP in relation to the DIAC contract, and advise that this contract had been of course generated by DIAC. They are still trying to get a response to your question. I am advised by the AFP that, unfortunately, it will not be available this evening.

Senator CASH: Thank you very much.