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Tuesday, 21 May 1985
Page: 2220

Senator GARETH EVANS (Minister for Resources and Energy) —Mr President, I seek leave to make a statement relating to the Government's response to the Costigan report.

Leave granted.

Senator GARETH EVANS —I seek leave to have the text of the statement incorporated in Hansard.

Leave granted.

The statement read as follows-

The Costigan Royal Commission on the Activities of the Federated Ship Painters and Dockers Union, as it became known, attracted enormous interest, both from the media and the general public, giving the name of Frank Costigan and his investigations common currency among just about all Australians.

The Commission was established by the Commonwealth and Victorian Governments in September 1980. What began as a one year inquiry into a small Victorian union with a reputation for violence, became a four year investigation into a wide range of criminal activity cutting across the whole spectrum of Australian society.

The Commission delivered five interim reports prior to its final report being presented on 26 October 1984. Much of the content of the reports outlined the Commission's investigations and consequently was confidential to ensure continuing investigations and/or prosecutions were not prejudiced.

The five public volumes of the Final Report were tabled in the Victorian Parliament, as well as in a number of other States, on 1 November 1984. The Commonwealth Parliament had by then been dissolved prior to the election. Nonetheless, copies of the public volumes were sent to all members and senators, with a full set of the confidential volumes being made available to the Leader of the Opposition. A copy of the public volumes was also tabled by the President of the Senate on 22 February 1985.

But the Costigan Commission's legacy is not just its reports. Its work ranks with that of the Moffitt, Woodward, Williams, Stewart and McCabe-Lafranchi inquiries in heightening our perception of the nature and extent of organised crime in Australia.

The Problem of Organised Crime

Commissioner Costigan reminded us that crime in Australia has come of age-it no longer involves small isolated pockets of criminal activity removed from the mainstream of Australian society. Taken in conjunction with the other inquiries to which I have referred, the Costigan Commission showed a complex web involving all manner of criminal activity, with links throughout Australia, and cutting across social classes and professions. He found that members of the Painters and Dockers Union had apparently offered their services as general criminal hands and were involved in such diverse activities as 'bottom-of-the-harbour' tax fraud, SP bookmaking, social security fraud, crimes of violence, and fraud and extortion on the waterfront.

It is important to note that for the most part Mr Costigan's reports were devoted to criminal intelligence and information and not the gathering of admissible evidence-a point I shall return to.

The Government recognises that organised crime is a national problem requiring a national response. Accordingly, we have taken action on a wide variety of fronts to tackle the diversity of criminal activity uncovered by the Commission.

First and foremost, we have established the National Crime Authority. For the first time, there is now an Australian law enforcement agency which is able to investigate matters covered by the laws of both the Commonwealth and the States. The Crime Authority has the support of all Australian governments. It has many of the powers available to Royal Commissions, including the Costigan Royal Commission; it has all of the Costigan Commission material, its computer systems and its data bank; and it has available to it much of the expertise of the Commission's former staff.

The establishment of the National Crime Authority was the subject of extensive debate in the Parliament and the Community at large-but we should not let the complexities of that debate obscure the fact that the establishment of this body is a very considerable achievement. The most important action required from the Government arising from the Commission was the need to maintain the fight against organised crime. The establishment by the Government of the National Crime Authority meets this requirement.

The Commission's Unfinished Investigations

A number of the Commission's unfinished investigations featured prominently in the Commission's Final Report.

Copies of the full report were immediately passed to the relevant Commonwealth agencies, particularly the National Crime Authority, the Australian Federal Police and the Director of Public Prosecutions, to ensure that all appropriate action was taken.

Recognising the importance and urgency associated with the Commission's recommendations relating to the death of Mr Ian Coote, the Government acted quickly in providing a copy of confidential volumes 9 and 10 to the Queensland Government. The second inquest established by the Queensland Government into Mr Coote's death confirmed the original verdict of suicide.

Confidential Volumes 6 and 7, and the full version of volume 5 of the Final Report, were subsequently provided to the Queensland Government to enable them to pursue their investigations. Similarly, these volumes, together with volume 9, were provided to the New South Wales Government.

I have already indicated that the major task for this Government arising from the Commission was to maintain the fight against organised crime. This was one of the major purposes in establishing the National Crime Authority.

The Commission handed over to the Authority during the four months of July to October 1984. The Chairman of the Authority has repeatedly stressed that this transition was effective and the Authority is now hard at work.

During the transition, the Costigan Commission provided the Authority with summaries of 42 matters relating to its outstanding investigations. The Authority held a public sitting on 13 December 1984 to outline the position with respect to each of the 42 matters.

The Chairman of the Authority, Mr Justice Stewart, stated that the 42 matters were at very different stages of development when received by the Authority. In particular, he noted that while some matters had undergone extensive analysis by the Commission, other matters had not been analysed at all and that some had not advanced beyond the receipt of police intelligence files.

At that public sitting, the Authority also indicated that it had resolved to take action with respect to all of the 42 matters, save three in which proceedings have either commenced or concluded. It then outlined the action it proposed to take with respect to the remaining 39 matters, including referring some matters to the appropriate law enforcement agencies, undertaking further investigations using its general investigative powers or undertaking intelligence operations.

Of the 42 matters, the Commission suggested that 20 be the subject of a reference.

To date, the Authority has requested and been granted four references to undertake special investigations-all of which involve drug related matters. Three of these references arose directly from several of the 42 summaries provided by the Commission. Furthermore, the Authority has recently requested additional references relating to some other matters contained in the summaries which to date have been the subject of general investigations by the Authority. These additional references will be considered by the Inter-Governmental Committee at its meeting at the end of this month.

Action against Organised Crime

The Authority, however, is only one aspect of the response that is needed to tackle serious crime in Australia. As demonstrated by the inquiries I have mentioned, a wide range of law enforcement responses is required. With the establishment of the National Crime Authority, that range is now complete and includes:

investigations by a single police force;

joint task force operations to cover more than one jurisdiction and to bring together special expertise;

special co-operative efforts, such as the Australian Bureau of Criminal Intelligence, to ensure full co-ordination across Australia; and

investigations by the National Crime Authority to tackle those matters which require powers beyond those available to the police.

The Government has taken action across this spectrum of responses. In particular:

we have increased the resources available in all aspects of law enforcement-for example, the expenditure in the law enforcement areas of my portfolio has been increased by 16.5 per cent from 1982-83 to 1984-85;

in particular, between 1982-83 and 1984-85 we increased Australian Federal Police numbers by 420, a growth of 14 per cent-we are now providing, over the next three years, $10m to recruit a stronger force and $7m for improved computer equipment;

we have moved to increase the powers available to police-we have offered State Governments telephone intercept powers for drug trafficking investigations subject to, inter alia, similar conditions to those applying to the Australian Federal Police. We are also considering granting access to tax information by law enforcement agencies, if suitable safeguards against the misuse of such information can be formulated;

we have introduced legislation in the Parliament to establish an independent Australian Customs Service with its own Comptroller-General to provide an appropriate focus for the management of that Service and we have also approved additional resources for the Service to interdict illicit drugs entering Australia;

we have established the Director of Public Prosecutions, streamlining the Government's prosecution system, to overcome the deficiencies in the earlier arrangements noted by the Costigan Commission in its fourth Interim Report;

in conjunction with the New South Wales Government, we have made the Commonwealth/New South Wales Joint Task Force on Drug Trafficking a continuing weapon in our fight against the menace of illegal drugs;

we have allocated an additional sum of the order of $1.5m to upgrade the automatic data processing capacity of the Australian Bureau of Criminal Intelligence over the next two financial years; and we are also examining the possibility of introducing crime impact statements to try to overcome, in advance, the possibility of legislation being abused or circumvented by criminals, thus decreasing the incidence of fraud on the revenue.

'Bottom-of-the-Harbour' Tax Fraud

The Costigan Commission also played a significant role in focusing public attention on 'bottom-of-the-harbour' taxation fraud, the subject of interim report No. 4. Following on the McCabe-Lafranchi report, it made the public aware of the magnitude of the problem and was instrumental in changing public attitudes so that tax evasion is no longer considered to be a sport, but is recognised as irresponsibly placing a burden on the rest of the community. These investigations resulted in the appointment, by the previous Government, of Special Prosecutor Gyles to handle 'bottom-of-the-harbour' tax matters and Special Prosecutor Redlich to handle all other matters. The purpose of appointing Special Prosecutors was to develop admissible evidence using the criminal intelligence and information furnished by Mr Costigan. This Government fully supported the work of the two special prosecutors, now being carried out by the Director of Public Prosecutions.

In addition, the Government has also continued action to overcome other weaknesses in the taxation laws. In October 1984, the Taxation Laws Amendment Act 1984 strengthened existing mechanisms for the collection of tax, increased the levels of penalty for breaches of the taxation laws and modernised provisions for prosecution for such breaches. These amendments pre-empted concerns expressed by Mr Costigan in his final report. The Government's action in relation to tax fraud is on the record. Indeed, significantly more evaded taxes could be recovered if the Opposition did not continue to block the legislation the Government has put before Parliament in relation to tax evasion schemes.

Waterfront Crime

Another area which Commissioner Costigan investigated was, of course, crime on the waterfront. He pointed to problems including the level of security on the waterfront and co-ordination between all the Commonwealth and State agencies involved. To overcome these problems, he recommended that a Port Security Authority be set up in each major port to collect and disseminate information relating to ports and to prepare and co-ordinate the targetting of major criminal groups. The Government also has before it the report of the Joint Commonwealth-New South Wales Task Force on the Security of Wharves and Containers, which was tabled in both the New South Wales and Commonwealth parliaments on 23 April 1985. The Task Force favoured a different approach to the Costigan Commission. Recognising the considerable cost and likely duplication involved in establishing a new body, it favoured a cargo security co-ordinating committee in each State.

The Government supports the need to upgrade waterfront security. The Government has given the Australian Customs Service and the Australian Federal Police the task of co-ordinating and disseminating all Commonwealth waterfront information and intelligence, to improve the Commonwealth's law enforcement efforts on the waterfront. Clearly this is a matter involving both the State and Commonwealth governments, given the concerns of the Task Force and the Costigan Commission regarding the lack of co-ordination. Accordingly, the Government has referred both reports to the Australian Police Ministers' Council to ensure the problems identified are tackled on a national basis. The Australian Transport Advisory Council is also considering the reports and will liaise with the Australian Police Ministers' Council. This action was endorsed by the special Premiers' Conference on drugs on 2 April 1985.

To parallel the work on waterfront security, the Government has established a committee to review existing security arrangements for air cargo, with a view to minimising the opportunity to use air cargo to transport illicit drugs. This Committee includes membership from the Department of Aviation, the Australian Federal Police, the Australian Customs Service and the State police forces.

Investigative Techniques

One of the major contributions made by the Commission was in the development of investigative techniques, described in volume 2 of the final report. While the Costigan Commission followed the lead of other inquiries by bringing together lawyers, accountants, civilian intelligence analysts and police investigators, its special contribution was the development and use of modern computer technology as an investigative tool. These techniques led to the uncovering of links between a variety of persons involved in diverse legal and illegal activities, and illustrated how criminal activities can be intermingled with legitimate activities to effectively mask the source of funds.

One technique advocated by the Commission not accepted by the Government is the concept of public exposure of persons not charged with any offence and the National Crime Authority Act has been carefully drafted to prevent the use of any such technique. Other techniques established by the Commission are available to the National Crime Authority. The Authority, however, is going one important step further than the Royal Commission. The Authority collects admissible evidence for the prosecution of persons involved in organised crime. This necessarily imposes on the Authority a difficult and painstaking requirement.

The Government strongly supports the use of modern computer technology in the fight against crime. The National Crime Authority has, of course, inherited the computer facilities and the data bank of the Costigan Commission. The system is being upgraded to a fourth generation language and other developments are taking place which should ensure that the system operates more efficiently. When this conversion is completed, detailed proposals will be prepared by the Authority on making the system available to other law enforcement agencies. It should, however, be recognised and firmly borne in mind that computer technology is not magic. It is but a tool, albeit a most important tool, in this critical fight against organised crime. Recognising the important role the tool of computer analysis has played in the fight against organised crime, the Government-as I mentioned earlier-is providing $7m for upgrading the computer facilities of the Australian Federal Police and will provide an estimated $1.5m to improve the ADP capacity of the Australian Bureau of Criminal Intelligence.

The Costigan Commission reinforced the importance of being able to follow the money trail to determine the ultimate destination of profits from criminal activities. This Government has repeatedly stressed the importance of concentrating law enforcement efforts against those at the apex of the organised crime pyramid, rather than those on the bottom rungs. It is the drug financiers and traffickers, not the users; the crime bosses and their lieutenants, not the hired hands, who must be the primary targets.

This is the main purpose of the National Crime Authority. It will concentrate on those who have successfuly eluded ordinary police methods. The Government has ensured that the Authority has the appropriate powers, particularly in the area of following the money trail. Like the Costigan Commission, it has access to income tax information. In addition, the Government has introduced legislation to extend this access to other tax information, including sales tax information. Like the Costigan Commission, it has access to banking and other financial records; and like the Costigan Commission, it has financial analysts and experienced corporate affairs investigators working for it to track down those who profit from organised crime. But this is not just a matter for the National Crime Authority. The Government is considering providing other law enforcement agencies with access to taxation information if suitable safeguards against the misuse of such information can be formulated.

In addition, a working party of officers is examining proposals, in consultation with banks and other financial institutions, to reduce the possibility of financial institutions being used to facilitate serious crime. One of the most effective ways of striking at top line criminals is to take away their profits. The Government firmly endorses a multi-pronged approach to wrest illegal gains from criminals and make organised crime unprofitable. Central to this approach is the continuing enforcement of the tax laws in relation to profits from illegal activities, and the introduction of legislation providing for the forfeiture of assets which can be shown to be derived from criminal activities. The Report of the Royal Commission points out that as a direct result of its activities tax-including additional tax-of $25m has been assessed.

The Commonwealth-New South Wales joint task force on drug trafficking also has demonstrated the usefulness of using the tax laws. The Australian Taxation Office, acting on information from the joint task force, has identified significant amounts of understated income and has assessed several million dollars as additional taxation and penalties. The Costigan Commission recommended in its final report the continued use of the taxation system to remove illegal profits. Again, the Government firmly supports this. We are confident that the Australian Taxation Office, together with the Director of Public Prosecutions, the National Crime Authority and other law enforcement agencies, can effectively pursue this line. The Commission recommended establishment of a new taxation investigation tribunal and special taxation investigator. The Government takes the view, however, that it is better to leave the task to the existing authorities. Creating new bodies runs the risk of overlap and inefficient use of resources.

For some time there have been Commonwealth provisions for assets forfeiture with respect to drug trafficking offences. A number of States have, or have proposed, similar legislation. The Government has accepted the recommendations of the Costigan Commission and others and has introduced legislation to Public Prosecutions to pursue civil remedies on behalf of the Commonwealth to recover unpaid taxes and other duties owed to the Commonwealth. In addition, the Director will be authorised to take proceedings for the recovery of pecuniary penalties against those involved in narcotics dealings.

Repeating recommendations made in the other reports I mentioned earlier, the Costigan Commission also supported the extension of forfeiture legislation from drug trafficking to other areas of crime. In this regard, the final report cited the American Racketeer Influenced and Corrupt Organisations legislation, noting the constitutional differences between the United States and Australian systems.

While this specific style of legislation is not appropriate for our situation, the concept of broader forfeiture legislation is being developed. It is supported by the Australian Police Ministers' Council. The Special Premiers' Conference on 2 April also endorsed the concept of forfeiture of assets in drug trafficking offences.

At its meeting on 2 May this year, the Standing Committee of Attorneys-General considered model drafting instructions prepared by the Commonwealth. The Standing Committee also agreed to the setting up of a joint working party of officials in conjunction with the Australian Police Ministers' Council to enable the matter to be finalised as soon as possible. The aim is to achieve uniform legislation throughout Australia so that the profits of organised crime will not be safe from confiscation in any jurisdiction and all jurisdictions will have an effective weapon to discourage participation in this kind of criminal activity.

Drug Trafficking

The Costigan Royal Commission was specifically encouraged by this Government from early in 1983 to concentrate its energies on drug trafficking. The National Crime Authority is continuing to pursue this fight with vigour and determination. A co-ordinated national response is especially important in the fight against drug trafficking. The Prime Minister (Mr Hawke), all the Premiers and the Chief Minister of the Northern Territory met in Canberra in a Special Premiers' Conference-the Drug Summit-on 2 April 1985 and agreed to mount a national campaign against drug abuse. The campaign will place a major emphasis on reducing the demand for drugs through education, treatment and rehabilitation programs. The Conference agreed that it was essential that government efforts to combat drug trafficking and to prevent supplies of illicit narcotics coming into the country be intensified. The summit agreed particular attention will be paid to those who control, direct and finance such activities. As I indicated earlier, this is a central theme of this Government's policies on organised crime.

Apart from initiatives I have already mentioned we are providing substantial additional resources-$5.5m over 2 years-to strengthen the capacity of the Australian Customs Services to interdict drugs entering Australia. In addition, the Customs Service is revising its northern strategy. We had previously introduced revised coastal surveillance arrangements including the Coastal Protection Unit with the Australian Federal Police. We recognise, as did the Premiers' Conference, the importance of ensuring adequate surveillance of the Australian coastline.

The Commonwealth also announced at the Premiers Conference the intention to create a new offence of sending illicit drugs through the mail, with the Australian Federal Police to have powers to examine suspected mail. Furthermore, the Customs Act is to be amended to clarify powers to detain and search persons concealing drugs internally to bring them into Australia. In consultation with the States, the Commonwealth is developing a model legislation package covering the regulation of the manufacture, distribution and medical use of drugs of dependence, diversion for treatment and penal provisions.

The Costigan Commission reaffirmed that the drug problem was a national problem with significant international links. Recognising that a major source of illicit narcotics coming into Australia is the south-east Asian area, the Government has committed significant resources to an aid project in Thailand. This project involves approximately $7.2m from the Australian Government, over five years, for computer equipment and automatic data processing personnel to the Thai Office of the Narcotics Control Board.

Australia's strong commitment to international efforts to combat drug trafficking will continue. We are seeking re-election to the United Nations' Commission on Narcotic Drugs. Increased co-operation with other countries-specifically Malaysia-is being actively pursued. The Government is also moving to strengthen our international treaty arrangements-by modernising existing extradition arrangements (including those with Western European States) and securing new agreements with other countries, such as the Philippines, where we do not already have them. We are also giving high priority to concluding mutual assistance treaties with selected countries to extend international co-operation in the pursuit of organised criminals.


I have outlined the approaches and techniques of the Costigan Commission and the action this Government has taken to ensure these are continued as appropriate. I have also touched on a number of the Commission's recommendations and our response. I now table a schedule outlining all of the recommendations of the Commission and the action taken to date.

Two words probably best sum up the public's view of the Costigan Royal Commission's work-'organised crime'. The Opposition has repeatedly tried to accuse this Government of a lack of commitment in fighting organised crime. Nothing could be further from the truth: We ensured the Costigan Commission had appropriate resources-out of a total cost of more than $14m over five years this Government provided $8m in only 2 years. In particular, we increased the Commission's budget from just under $3m in 1982-83 to just under $6m in 1983-84; we have established the National Crime Authority to lead the fight against organised crime; we have established the Director of Public Prosecutions to streamline the prosecutions area and overcome earlier problems; and we have substantially increased the resources available to the Australian Federal Police and have instituted a whole host of improvements and measures of assistance in just about every aspect of the fight against crime. But we are not finished yet-we remain committed to ensuring that organised crime is attacked relentlessly in this country with every weapon that a democracy can marshal.

Senator GARETH EVANS —I move:

That the Senate take note of the statement.