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Finance and Public Administration Legislation Committee
17/10/2016
Estimates
PRIME MINISTER AND CABINET PORTFOLIO
Office of the Inspector-General of Intelligence and Security

Office of the Inspector-General of Intelligence and Security

[22:16]

CHAIR: I welcome the Hon. Margaret Stone, Inspector-General of Intelligence and Security, and assistant inspectors-general Mr Jake Blight and Ms Annette Willing. Ms Stone, do you have an opening statement?

Ms Stone : No, not this evening, thank you.

Senator XENOPHON: Ms Stone, it is good to see you again. I am sorry it is such a late hour. I want to go to questions that I have asked of you previously, in relation to the matter involving Witness K. It was something that I raised firstly with Dr Thom some time ago—in respect of Witness K and alleged inconsistencies by Mr Collaery about information provided between a statement of Mr Carnell and Mr Collaery. I am not sure if you are familiar with that—

Ms Stone : I am familiar with the issue. I would rather know more precisely what you are referring to.

Senator XENOPHON: Yes, if I can just walk through it so there is no misunderstanding with respect to that. On the last occasion, I said there was an assertion made by Mr Collaery, a former Attorney-General of the ACT and a legal practitioner in the ACT, as well as in other states, that there appeared to be a discrepancy between the statement of Mr Carnell and Mr Collaery in relation to whether a complaint was made to IGIS about the matter in respect of Witness K. The response, when I first raised this before Dr Thom, was that there was no inconsistency. I asked Dr Thom whether IGIS would undertake any lines of inquiry in respect of that to see whether something may have been missed, because the evidence given to the Privileges Committee was that the matter was raised with IGIS in respect of Witness K.

I asked you whether you would be making lines of inquiry and were you going to be satisfied with what your predecessor had said. Your response at the time was that you had already looked to confirm the statement that was made about no complaint being made in relation to alleged ASIS activity in East Timor. Having done that, I am now comfortable that the statement is correct. Mr Collaery, as I said, did make a statement in a public lecture about his client having made a complaint to the IGIS, but that complaint, he said, was about the outcome of the selection committee, not about events in East Timor. You went on to say:

I do not know the reason for that discrepancy, and I am aware of Mr Collaery's standing as an officer of the court and a respectable citizen, but I place myself in that category as well. That is about all I can say on that.

Given that this seems to be an ongoing issue in terms of what Mr Collaery's assertions were in relation to this on behalf of his client, Witness K, it seems you relied on public statements in your answer to that question. Are you able to advise whether you are minded to go back to Mr Collaery to further investigate the assertions made rather than any statements or information that is publicly available in relation to this?

Ms Stone : Could you clarify one thing for me?

Senator XENOPHON: I hope I can.

Ms Stone : We will try! That is the nature of the inconsistency. As I understand it, Mr Collaery has made a statement in a lecture given at ANU about a complaint made by Witness K to the office of the IGIS, and he indicated that that complaint was about a recruitment issue—the outcome of a selection committee. I think it might have been a promotion or something like that. We are not either agreeing or disagreeing with that, but I am not quite sure where the inconsistency that you are referring to is?

Senator XENOPHON: Essentially, as I understand it, Mr Collaery is saying that these matters were raised with IGIS—

Ms Stone : These matters being what?

Senator XENOPHON: Being the alleged bugging of the East Timorese cabinet room by ASIS. These matters were raised with IGIS, not with your immediate predecessor, but—

Ms Stone : With Mr Carnell.

Senator XENOPHON: Yes, with Mr Carnell. And when I asked Dr Tom about that, it seems that the view of Dr Tom—and it is not a criticism of Dr Tom—was that the matter had been dealt with and there was nothing further to look at. What I am asking, if I could break down the question in these terms, is, given the basis of Mr Collaery's complaints about this—and the Privileges Committee looked at this issue—do you have the power to revisit this matter to make further inquiries of it, which could include seeking to interview, at first instance, Mr Collaery and perhaps witness K about the alleged inconsistency?

Ms Stone : We keep very detailed, very comprehensive and accurate records in the office. I have looked through part of those, and my staff have looked through them, and I am completely satisfied that the statement that Dr Tom made is correct; that no complaint has been made by any current or former ASIS officer to our office concerning events in East Timor. I am quite satisfied about that and I cannot imagine that I would seek Mr Collaery out, when no complaint has been made, to in any way raise that matter. I have recently been asked by a journalist if that is still the case, and the answer, after appropriate inspection, is yes. So it seems to me the matter is settled.

Senator XENOPHON: In the absence of a fresh complaint about the same matters, or would you regard it as been settled even if a fresh complaint was made?

Ms Stone : It would depend on the nature of the complaint. When you say 'a fresh complaint', that sort of assumes there was a complaint, and I am saying there was not.

Senator XENOPHON: I apologise. You are quite right.

Ms Stone : That is alright. It is my pedantry coming to the fore.

Senator XENOPHON: I think pedantry is a beautiful and necessary thing, especially in matters such as this.

Ms Stone : We are in complete agreement.

Senator XENOPHON: I think the Attorney might even agree with me on that.

Senator Brandis: You know, Justice Stone, it is sometimes difficult to explain to politicians how lawyers are very precise in their use of language.

Ms Stone : So, putting that aside—

Senator XENOPHON: Are you implying that I am not a very good lawyer, Attorney?

Senator Brandis: I was not thinking of you, Senator Xenophon. I must confess I do think of you as a politician.

Senator WONG: It is alright; no-one thinks of you as a lawyer either, George. Him, not you. I do not think of you as a lawyer.

Senator XENOPHON: That is not very nice.

Senator WONG: Well, he has been a bit mean lately. He has been misleading parliament.

Ms Stone : As I was saying, I think there are only so many times that it is a fruitful use of the energies of my office to go back through the same records over and over again. So if a complaint were to be made and it was a complaint in relation to which we had jurisdiction then certainly we would look at it, as we would with any complaint.

Senator XENOPHON: I work on the assumption based on your thorough revision of the notes on the files that there was no complaint made by any current or former ASIS officer with respect to an alleged bugging of East Timorese cabinet room.

Ms Stone : That is correct.

Senator XENOPHON: If suddenly there were to be a complaint made for apparently the first time, that is something that you would consider in the context of a complaint being made by a current or former officer of ASIS, or would it be your view—

Ms Stone : Sorry, are you talking about a complaint which says an earlier complaint was made or a complaint about activities?

Senator XENOPHON: It could be both.

Ms Stone : I think that it would be imprudent of me to answer that question. I would need to look at the complaint and we would take it seriously, as we do with all complaints in our office.

Senator XENOPHON: But you have not actually met witness K, have you?

Ms Stone : Absolutely no.

Senator XENOPHON: I go to an article by Tom Allard in Fairfax papers on 15 March 2016 headed 'ASIS chief Nick Warner slammed over East Timor spy scandal'. I only mention that as a point of reference for the article. I firstly go to the issue of the passport. My understanding from the material that I have gleaned is that ASIO said they have no concern about witness K being provided his passport, because his passport was taken away from him or not issued—I am not sure—either way, but he cannot get a passport to travel outside the country. My understanding is that the Director-General of ASIO, Duncan Lewis, has stated that there is no concern on the part of ASIO about witness K having his passport issued to him or provided to him in order that he—I presume witness K is a he—may travel, but, according to Tom Allard's piece, I understand that ASIS may have expressed a concern. My question goes to this: as reported by Tom Allard in The Sydney Morning Herald on 15 March this year, there is an allegation that the current head of ASIS, Mr Warner, was involved as a special adviser to the ASIS team that is alleged to have bugged the East Timorese cabinet room. Is it within the purview of your office to examine whether there is a potential conflict of interest if ASIS have said witness K should not have their passport issued to them, despite ASIO having a different view, and the allegations contained in The Sydney Morning Heraldpiece on 15 March this year.

Ms Stone : Let me just make a few points. I am not sure that I completely understand all of your question. Under section 14 of the Passports Act, a competent authority may request the minister to cancel or refuse to issue a passport where there is potential for harmful conduct. That might include prejudicing the security of Australia. It might also include other things, I imagine. I am aware that the competent authority request made in relation to witness K was ASIS, but the decision to refuse the passport is subject to a legal proceeding, as I understand it, in the Administrative Appeals Tribunal and therefore it would be inappropriate for me to comment any further on that.

Senator XENOPHON: I understand the proceeding is before the AAT currently. I understand there are still current proceedings. That is your understanding?

Ms Stone : Yes.

Senator XENOPHON: But doesn't your role as Inspector-General of Intelligence and Security have a broader purview in terms of the conduct of our security agencies? Is that right?

Ms Stone : That is certainly true.

Senator XENOPHON: So leaving aside the question of the Administrative Appeals Tribunal proceedings, if there is a concern or an allegation that the current ASIS head, Mr Warner, was aware, or was indeed an adviser, at the time of the alleged bugging of the East Timorese cabinet room by ASIS agents in 2004, does that raise any concerns about a potential conflict of interest and the appropriateness of the decision-maker to recommend that Witness K's passport not be issued or provided to Witness K and is that conflict of interest something that would be within your purview as Inspector-General?

Ms Stone : It seems to me that if a competent authority requests the minister to refuse to issue a passport and the minister accedes to that request, and then there is an appeal on that matter to the Administrative Appeals Tribunal, the issues you raise will be germane to the proceedings in the Administrative Appeals Tribunal.

Senator XENOPHON: But aren't we conflating the role of the Administrative Appeals Tribunal to your role as Inspector-General of Intelligence and Security—that if there is a concern of a conflict of interest between the head of ASIS and the role that the head of ASIS may have played back in 2004 about the very issue that goes to the refusal to give Witness K his or her passport—

Ms Stone : I am sorry to interrupt, but these things have to be dealt with in a series of steps. If a request is made and the Administrative Appeals Tribunal is doing that, then the substance of the objection will be dealt with in the Administrative Appeals Tribunal. Then there is the question that you raise, which I guess is a second question: was there a conflict in interest involved in that recommendation being made? Am I right in understanding—

Senator XENOPHON: Yes. I am just going to section 4, 'Objects of Act', which includes references—

Ms Stone : Are you talking about my act?

Senator XENOPHON: yes, your act—to assisting—and, sadly, mine has been printed in a way that it chops off the last few letters of each line, but I will guess what it says.

Ms Stone : Is this (d)?

Senator XENOPHON: That is right.

Ms Stone : It says:

(d) to assist the Government in assuring the Parliament and the public that intelligence and security matters relating to Commonwealth agencies are open to scrutiny, in particular the activities and procedures of intelligence agencies.

Senator XENOPHON: And prior to that, it relates to issues of—that is right, because the other objects relate to assisting ministers. But that is quite broad and all-encompassing in respect of 4(d). Do you consider or do you concede, in respect of 4(d) of the 'Objects of Act' that governs your role, that whether the current head of ASIS had some involvement in the matter that is in dispute—the alleged bugging of the East Timorese cabinet room—would come within your purview in terms of the confidence the public would have of our intelligence agencies?

Ms Stone : Sure. Let me make two points about that. Section 4 is an aspirational section. It says, and quite rightly, 'These are the objects of the act'. It is not operational. It does not tell you what I should do in order to give effect to (d). So there is a big jump from—yes, obviously I completely accept 4(d) and aim to work to pursue those objects, but, as I said, it does not tell me how to go about doing that. Somebody is drawing something to my attention.

I have just had drawn to my attention section 9AA, 'Limits on the Inspector-General's functions'. It says:

The Inspector-General must not, in the performance of his or her functions under section 8 or 9 …

Sections 8 and 9 bring in the functions. There is a distinction between the objects of the act—which, as I say, are aspirational; that may not be quite the right word, but it will do for now—and the operational. When you get to the functions of the inspector-general, that is when you get to the nitty-gritty of how I am to go about my work. Sections 8 and 9 set out functions. Section 9AA sets out limits on the inspector-general's functions and says:

The Inspector-General must not, in the performance of his or her functions …

…   …   …

(c) inquire into a matter, other than a matter that is referred to the Inspector-General under subsection 65(1A) of the Australian Security Intelligence Organisation Act 1979, that is, or could be, the subject of a review by the Security Division of the Administrative Appeals Tribunal.

Senator XENOPHON: It depends how you define 'matter', though.

Ms Stone : I understand.

Senator XENOPHON: We are not asking about reversing a decision but about the appropriateness or otherwise of the assertion that the current head of ASIS, who made the recommendation—

Ms Stone : Well, this of course is hypothetical.

Senator XENOPHON: But it was ASIS that did—

Ms Stone : Sorry. I beg your pardon. Yes, it is ASIS that is the competent authority.

Senator XENOPHON: Yes, ASIS is the competent authority that said, 'Don't let this man or woman have his or her passport.' It ordered that Witness K not have his or her passport, yet there is an assertion or allegation published in The Sydney Morning Herald—and presumably defamation proceedings have not been issued—that Mr Warner had an awareness of the spying, according to Mr Collaery, yet 12 years later—in Senator Heffernan's committee, you had to buy a slab of beer for everyone in the committee if your phone went off! I am not sure whether—

Senator McKENZIE: I will take that as a threat, Senator!

Senator XENOPHON: No, it is not a threat.

Senator Brandis: Senator Xenophon, I think it is important—if I may—to understand that these assertions reported in the Fairfax press are only assertions. They are unverified assertions. It is a fact that Mr Warner is the head of the competent authority and that nobody doubts the jurisdictional competence of the authority to make the application or that the application was in any way, for any formal or substantive reason, defective. It is not apparent to me, Senator Xenophon—even if one were to accept uncritically, which no-one here at our table does—

Senator XENOPHON: It is not a bar table. What sort of table is it?

Senator Brandis: that the assertions against Mr Warner were true. Even if one were to accept that uncritically, which no-one does, it does not detract from the competency of the application.

Ms Stone : Can I add that I think the issue is that we have allegations or assertions, as the Attorney-General says. We have assertion on assertion. In my view, it would be inappropriate for me to do anything in relation to that as a result of a comment made in an uncorroborated way in a public newspaper which is hypothetical on hypothetical, when the matter which may in fact resolve some of these issues, or may not, is before the Administrative Appeals Tribunal. I might be wrong about that, but that is my view.

Senator XENOPHON: It depends how you interpret 'inquiry into a matter', because the matter that I am asking whether you have the jurisdiction or the power to look into, aspirational or otherwise, is a distinct issue of a perceived or alleged conflict of interest between the head of the competent authority and the role that that head of the competent authority may have played 12 years earlier in relation to the matter in contention—namely, the alleged bugging of the East Timorese cabinet room. So you are saying that—

Ms Stone : I understand. If you say it is a question of how you interpret a matter, I guess you and I are differing on that.

Senator XENOPHON: So to sum up: if you were to—

CHAIR: Senator Xenophon, I have got to clarify: is this a final question?

Senator WONG: We have got one more agency after this.

Senator XENOPHON: I apologise. I was not aware of that. I will be very quick.

CHAIR: Thank you.

Senator Brandis: And we actually have until 11 pm.

Senator WONG: And I have got just a couple of quick questions.

Senator XENOPHON: Ms Stone, I will correspond with you and, I am sure, revisit this in future estimates.

Ms Stone : Please do.

Senator XENOPHON: And we will take it from there. Thank you very much.

Ms Stone : All right. Thank you.

CHAIR: I appreciate that, Senator Xenophon.

Senator WONG: Ms Stone, in your annual report you refer to some delays in security and other clearances which are hampering you in attaining the appropriate level of staffing.

Ms Stone : Yes.

Senator WONG: I was going to ask some questions about security clearances, but we do not have time for that, unless there is something you really want to say. I understand from a later comment in the report that you actually have 14 FTEs—or 14 ongoing APS employees, so they are not even FTEs, not even full-time equivalents.

Ms Stone : No. Some of those are part time.

Senator WONG: That is a headcount number. What is the optimal FTE number? I am trying to get a sense of how much—

Ms Stone : As the numbers have risen over the years and we were given additional funding to deal with special powers, it is hard to say what the optimal funding is because, like every other agency, we cut our cloth to suit our purse. But it is more than 14. I would think we would need 16 or 17. That depends on balancing our budget and so on.

Senator WONG: Is that a full-time equivalent number or a headcount number?

Ms Stone : I think it is a headcount.

Senator WONG: FTE, I assume.

Ms Stone : FTE, I am told.

Senator WONG: So the equivalent of 16 full-time employees.

Ms Stone : Sorry; you are asking me about my number. Yes.

Senator WONG: Is that what you are currently funded for?

Ms Stone : I do not think it is quite as precise as that.

Senator WONG: You have got a CFO?

Ms Stone : What is that?

Senator WONG: The PBS has an ASL of 17.

Ms Stone : Right, yes.

Senator WONG: Does that base continue over the forwards?

Ms Stone : I am sorry?

Senator WONG: Does that average staffing level number, which is for the 2016-17 budget year, continue over the forward estimates?

Ms Stone : Yes. If I can just add something in relation to the security clearances, the problem is that the security clearances take so long. In fact we had two offerees pull out after more than 18 months—

Senator WONG: Eighteen months?

Ms Stone : More than 18 months, I think it was—about 18 months anyway. They just wrote to us and said, 'Sorry; we've taken other positions.' We do get staff with clearances already, but we also offer to people who do not have clearances because we think they have got the talents and skills we need. People with clearances can leave very quickly, but we cannot get people in to replace them very quickly. We manage, but it is a juggling.

Senator WONG: So 18 months to get clearance, and two offerees then declined. Is that right?

Ms Stone : Yes. They accepted originally and then withdrew their acceptance.

Senator WONG: Who is responsible for the clearance process for you?

Ms Stone : Ours are done by Defence.

Senator WONG: Have you raised with Defence this concern about time frames?

Ms Stone : We need top secret PVs. I think every agency who needs that has raised them. I think they are extremely time consuming and difficult. I am not suggesting for a moment that they lower their standards.

Senator WONG: But the oversight entity, which is what you are, is precluded from or hampered in achieving the appropriate staffing level because for year and a half you cannot get a security clearance. That goes to your operational capacity.

Ms Stone : It certainly does and we are just for that. There are adjustments that you can make. But, yes, we would like to have them.

CHAIR: I thank the Office of the Inspector-General of Intelligence and Security, and now we will move to the Digital Transformation Office.