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Legislative arrangements to outlaw serious and organised crime groups

CHAIR —Welcome. Do you have any comments to make on the capacity in which you appear?

Mr Outram —I am executive director, investigation and intelligence strategies.

Ms Ulrick —I am acting executive director, strategic outlook and policy.

Mr Manning —I am principal policy and reform officer.

CHAIR —Thank you. I invite you to make a short opening statement, Mr Kitson, which will be followed by questions from the committee.

Mr Kitson —Thank you, Chair. As committee members are aware, responsibility for tackling serious and organised crime in Australia is spread among a number of agencies at state, territory and Commonwealth levels. The ACC’s contribution is really to enhance law enforcement’s understanding of and ability to deal with key criminal activities. In this regard we have access to a range of legislative powers. Our experience of these powers leads us to the conclusion that at the present time, and faced with the current criminal environment as we understand it, there is not a need for significant reform to the legislative suite of powers available to the ACC. This may not of course be the case in the future. The ACC believes it can continue to fight organised crime by making effective use of the traditional and non-traditional intelligence and policing methods currently provided for. Having said this, I note the ACC has identified some areas where there may be scope for consideration of some refinement to the tools available to law enforcement. I stress that we do not promote these as the only answer to a very difficult problem. They are just areas where the ACC feels that there could be benefits achieved through monitoring the experience of other agencies in using new approaches and mechanisms to combat organised crime.

In our submission, the ACC expressed interest in looking at the applicability of the United Kingdom’s serious crime prevention orders, SCPOs, and financial reporting orders, FROs, as a useful way to monitor the activities of key persons of concern. FROs, in combination with the easily applicable proceeds of crime legislation, may enhance our capacity to attack the criminal economy. As members of this committee are aware, the ACC, with its board’s approval, is focusing its operational strategies on attacking the profit base of crime. As you would all know, the key motivator for undertaking criminal activities is predominantly the profit which these activities bring. The underlying strategy of the ACC is to identify serious criminal targets through identification of criminal business structures and money flows. For example, the identification of suspect money transfers and repositories is a key methodology for target generation and development. This is a proactive risk-based approach to identifying high-risk money flows and it does not rely on the identification of an original offence to start an investigation. The ACC has suggested that its ability to interrupt the financial affairs of suspected criminals may be enhanced through consideration of improvements to existing arrangements for the seizure of criminal proceeds at the Commonwealth level. The implementation of recommendations of the Sherman report on the operation of the Proceeds of Crime Act 2002 would strengthen the proceeds of crime regime.

It is true to say that the criminal environment has become more complex and legislative tools will need to evolve to match the needs of the criminal environment. Our key intelligence reports show the changing nature of serious and organised crime. We know that groups are typically flexible and entrepreneurial and come together and disband as the needs and opportunities arise. They are increasingly using professional facilitators to blur the lines between legitimate and illegitimate sources of revenue. Financial reporting orders could simplify the ACC’s push to understand high-volume money flows associated with those involved in the more serious ends of organised crime. The ACC acknowledges that this type of regime would need careful consideration in the Australian context given civil rights and privacy concerns.

Outlaw motorcycle gangs, which are of particular interest to this committee, are more structured, enduring and more easily identifiable than many other groups that we deal with. However, they are not typical of the majority of organised crime entities that attract national law enforcement attention. While other syndicates or networks may share a common ethnicity or ethos, these are rarely defining characteristics. In reality there is little if any public self-identification by the majority of the key criminal syndicates which we target. I conclude by noting that our focus is on suspicious money trails and that the focus of our future activity and our concern about where we might improve and tighten legislation remains on those areas.

CHAIR —Thank you very much, Mr Kitson. Do any of your other officers want to add anything at all?

Mr Kitson —No, Chair.

CHAIR —We will proceed to questions.

Senator PARRY —Thank you very much for your opening address. I feel as though we have seen a lot of you guys lately over the last few months. I want to look at a broad scope aspect of the ACC and organised crime. Do you feel as though the state based police organisations and the Commonwealth agencies all work cohesively? Do you see any gaps? Do you feel as though they all work exceptionally well?

Mr Kitson —Our broad experience over the six years of the life of the ACC is that it works really very well, perhaps despite some of the inevitable challenges that come with our federated system. I think that we have worked together successfully. We have achieved some really quite notable outcomes despite the diverse approaches that are taken across the states and territories and across the Commonwealth. I do not doubt that, with some harmonisation of some legislation and with a continuing commitment—and perhaps in some cases a refreshed commitment—to information sharing and to a meaningful commitment of resources when we establish national task forces, we could continue to achieve more.

Senator PARRY —On those two points, resource sharing and information sharing, do you feel that they work successfully across the country?

Mr Kitson —I think it has all improved markedly over the life of the ACC. There is scope for considerable improvement in both, but I think that is a reflection of a maturing process as we all come to understand what information we need to know. As I have just described, our job is to understand and to share that knowledge of the criminal environment: how it operates and how it changes. It is inevitable that our understanding therefore of where the gaps exist in our knowledge is also evolving. It is also changing. So there is the obligation on us and the requirement for us to seek information from our partner agencies. Indeed that scope as to partner agencies is constantly evolving so there is probably no point in time when it is a static picture. I think we will always need to continue to strive to share information and we could never be satisfied that we have a comprehensive set of arrangements. I am confident that it is as good as it could be for the most part. There are areas where we need to work harder and areas where we would welcome greater assistance from some of our partner agencies and areas where perhaps our own legislation might enable us to share information better, particularly with the private sector.

Senator PARRY —Do you feel the agency is resourced well enough, in particular with IT equipment, to maintain this major role of a national approach?

Mr Kitson —The challenges of maintaining a modern comprehensive and cutting-edge information technology system are huge. There is no doubt that we will face challenges as we step into the future about the funding of the existing ACID and ALEIN arrangements. At the moment I believe they represent a good range of tools for us and for our partner agencies, but they will continue to require investment into the future.

Senator PARRY —Who would you say, whether it would be your agency or another agency, would have the best database and the best knowledge of outlaw motorcycle gangs and organised crime in Australia? Do you think there is one lead agency that would have more information and more knowledge?

Mr Kitson —I think the ACC’s national OMCG coordination system offers the best aggregation of that knowledge. I do not think we have a particular view on whether any one or other of the state or territory jurisdictions has a better grip than others. Even those that perhaps have a more dedicated approach to or a more comprehensive understanding of motorcycle gang issues in their respective jurisdictions would not have a national picture. So I think it would be fair to say that the ACC’s ACID, with its coordination system, would have the best knowledge. Because that attracts information from all of our partners, I would be confident that that is the best system and the best body of knowledge.

Senator PARRY —Do you feel as though the integrity of each partner agency, the security of their information and the quality of their information that feeds into your information—and the dissemination thereof—are sound? Do you think that all has great integrity?

Mr Kitson —By and large, yes. There are always going to be challenges to information security. We deal in a tremendously difficult and challenging area. To make use of intelligence and information you have to disseminate it to someone for action. There is always the potential for either mishandling or deliberate misuse of information. By and large over the six years of the agency’s life we have been pleased with the very low rate of concern about compromising of information. In terms of the quality of information that comes to the ACC, we are always dependent on how the other agencies compile their information, how they express their information. There are constant challenges for all of law enforcement, particularly when we come to share information nationally, about the standardisation of terms. I think we said to this committee in a different context that different jurisdictions might record methylamphetamine differently; they might record something as ice or as crystal methylamphetamine. That presents some challenges in validating the quality of information that we get.

We have invested a fair amount of effort over the last few years in trying to provide some consistency and guidelines, particularly to our policing jurisdictional partners, so that they can put information into the Australian Criminal Intelligence Database which has a broader level of consistency. That is why we have some of the tools that we do that sit across ACID. It is so that we can, if you like, even out those bumps and have a greater level of confidence that we are comparing apples with apples.

Senator PARRY —I want to move to a comment in your opening remarks about the focus being on the money trail. Obviously, you have a close working relationship with AUSTRAC. You say that is your focus. Is it your focus above and beyond everything else—you are not really gathering other intelligence; it is just simply the money trail and the proceeds of crime?

Mr Kitson —No. It recognises, as I said in my opening statement, that organised crime is for the most part about profit. They are not generally about a better quality of firearm or a better quality of drug. Perhaps there is something of that in there but by and large it is about the balance sheet for them. Our focus then is not necessarily about the predicate activities or even some of the individuals involved in it, but recognising that, wherever the criminal activity takes place and whatever crimes are involved in it, if we can take away the profit benefit then we are having more impact than we would through any number of—and I hesitate to use this term—minor charges. If we drive at what is the profit motive here, I think we will be more successful in unpicking and deterring—and perhaps even in the crime prevention area.

Mr Outram —The approach we are taking is, as Mr Kitson has said, to look at the money flows to identify what you might call higher risk money movements. It is almost a top down approach, but we are not ignoring the ground up approach, which is very much about the intelligence that the states give us. If the states say, ‘That is all very interesting, but these are our main organised crime priorities and problems’—for example, we might think it is OMCGs and they might have a different view—then we will listen to that. So we have a process for collecting that sort of information as well. That feeds in, if you like, to the analytical processes. Yes, there are a lot of strategic and aggregate datasets but there is also that ground up intelligence about particular individuals and groups that are causing problems. The trick is how to superimpose those different views.

Senator PARRY —Can you give us a dollar value for what would be traded with outlaw motorcycle gangs? Is there any quantum you can use at all?

Mr Kitson —I do not think we would wish to give that in open session. We might go to another session, if that is acceptable to the committee.

CHAIR —If that is the only question that you want to answer in camera, I think we would be happy to receive that in writing as confidential or next week.

Senator PARRY —We are seeing you next Monday.

Mr Kitson —Next Monday would be the most appropriate time I think.

Senator PARRY —You can get the calculator out between now and then. Thank you very much.

Mr HAYES —I see part of the role of this committee is looking at, in conjunction with the ACC, the contemporary tools that are necessary to fight serious and organised crime. I have to say there is a bit of frustration. We get a series of commissioners who appear before us and it is very hard to get any two people to agree, yet they are effectively at the front line and fighting for the community against serious and organised crime. Since we have the ACC here, which is often referred to as the country’s premier law enforcement agency, I would be interested in knowing—and I know in your submission you have dealt with SOCA and overseas experiences—in relation to where we sit in relation to serious and organised crime, what would be, without being sensitive to the politics or anything behind it, the most effective scheme of law enforcement legislation that would be of benefit to this country?

Mr Kitson —That is a very broad question, indeed.

Mr HAYES —I have not been able to get anyone to answer it so far.

Mr Kitson —I am grateful for the opportunity to answer it then. It is, indeed, a very broad question. Our perception would be that it is perhaps not necessarily about a single piece of legislation and it is not necessarily about the greater use of existing powers, but perhaps the concerted effort towards national priorities by all of the states and territories in combination with the Commonwealth.

The ACC’s mandate includes the responsibility for developing a set of national criminal intelligence priorities, which we recommend to the board each year and which the board makes its own commentary and adjustments on. That has some impact over the menu of work for the ACC but, arguably, it does not have particularly significant influence over the work of the jurisdictions and the level of resources that are focused nationally towards those nationally identified criminal intelligence priorities.

We would recognise that in each state and territory there are peculiar challenges to law enforcement, there are different political pressures and there are different natures of criminality. But I think we would be more effective dealing with some of the national challenges that are before us if there was a flow-down effect, a cascading effect, from those national criminal intelligence priorities across the resourcing commitments of the state and territory jurisdictions, particularly in terms of gathering information and intelligence to fill those gaps in our knowledge.

Mr HAYES —We have heard a fair bit so far about unexplained wealth legislation, particularly as introduced in Western Australia and further modified and adopted in the Northern Territory. Other jurisdictions have other aspects about proceeds from crime and how that is implemented. You talked earlier in your evidence today about being able to follow the money trail. Would uniform legislation on unexplained wealth have a material effect in addressing the issues of money associated with crime?

Mr Outram —I believe it would. I think following the money is obviously very important from the point of view of identifying the areas of risk and the individuals who represent the greatest risk, but then it is a question of how you actually do anything about that, given the size of the criminal economy and the amount of money that is restrained and forfeited. There is a big disparity, so the performance would appear to warrant some improvement, I guess, in terms of the way we recover money.

At the moment there is a range of legislation that could be used. A model that we looked was the Criminal Assets Bureau in Dublin, Ireland. They are regarded as the most successful asset recovery agency in Europe, as I understand it. What they do is apply the Irish tax legislation, proceeds of crime legislation and any criminal legislation they can. So they have a multi-agency approach: they bring in tax commissioners, senior DPP type lawyers to do the proceeds, and Garda Siochana police officers. They told me, though, that in probably 60 or 70 per cent of cases they opt for the tax act because it is the most effective tool to remove the profits from crime. That probably gives you an idea that, yes, removing the illicit profits is the trick, and they were very pragmatic in their approach. So if the undisclosed income legislation was the kind of tool that could be applied fairly simply then it would be very effective.

The difficulty is that because of the complexity and sophistication of some of these business structures and the intermingling of legitimate and illegitimate sources of income, it is very, very difficult for an investigator to disentangle all that to the satisfaction of a court, where you can prove reasonably that that particular amount of money over there is from an illegal source and that money over there is legitimate. That is the difficulty we face. And, of course, acquiring the people with the skills to understand money, money flows, business structures and the way that businesses and markets work will be a big trick for law enforcement down the track.

Mr HAYES —Again following on from earlier evidence from the ACC, if we are talking about a bunch of corrupt entrepreneurs out there, effectively anything we can do to assist in following the money trail would not only have a material effect in terms of prosecutions in those areas but would also significantly assist in preventing serious and organised crime. It would take away the incentive, wouldn’t it?

Mr Kitson —I would agree. We have started to phrase a lot of our internal dialogue around that issue of serious crime prevention and to focus very much on that issue, that if there is an evident downturn in criminal profits then it acts as a discourager, a potential preventer, of organised crime activity. It may perhaps deter those who want to get into it and it may make it more difficult for those already engaged in it, forcing them to take greater risks than they currently do and therefore exposing themselves to greater risk of detection and prosecution.

Mr HAYES —The other aspect is that—and Michael has raised it in terms of considering what has occurred, say, in using the tax act in Ireland—effectively, this committee is also seeking advice. What areas of existing legislation, not necessarily in this country but elsewhere, that have had a material effect in acting against serious and organised crime should we be looking to? It does seem to me that, whilst we have the parliamentary joint oversight body of the ACC and we can sit around and have dialogues between one another every now and again, we still should be taking soundings. You guys are the premier law enforcement agency out there. We should be kept up to speed about what are contemporary tools for policing and for combating serious and organised crime in particular.

Mr Kitson —That is why we focused in our submission on the UK legislation. We had a look at legislation in the United States and Canada, and that which we thought had the greatest likely applicability to the Australian context was the UK’s approach. I think you would be aware that the UK’s laws are have not been enacted long enough to give us a decent body of information on which to judge its success or otherwise. Indeed, in our dialogue with them, they also observed that it is too early to make a judgement. But the reason that we identified particularly financial reporting orders as something that was of interest to us is because it deals with the capacity of some of the most enduring and resilient organised crime figures to maintain their wealth regardless of the individual or concerted efforts of law enforcement across the country. If we shift the burden of proof so that people have to explain unexplained wealth then there may be some benefit to us in trying to understand how they are operating, who they are operating with and what they are doing with those assets. Part of our approach is to look at the efficacy or otherwise of that legislation, but I suspect that that we are a year or so away from having an understanding of how that operates in their context and, when we try to apply that across the Australian context with some of the difficulties we might have with a non-unitary law system and the different state and territory policing agencies we have here, I think there will be a fair bit of study and work to be done in that area.

Mr HAYES —But the level of serious and organised criminality presumably everywhere other than in Tasmania would have a lot in common. As you would with any business, you would exploit the lines of least resistance in whatever business you are in and what is going to deliver you greater profits. Presumably, if we simply go on a state-by-state basis in our response to serious and organised crime, we are going to have gaps everywhere.

Mr Kitson —That is why we argued strongly for improved coordination and improved commitment across the nation to deal with some of the targets. We have recently, with the board’s approval, established a number of national task forces and national targeting projects that look to enhance that cross-jurisdictional coordination of effort against some of the most significant targets we have available. But there are always going to be more targets than resources at any given time. We sense that the key to the future is looking beyond the state and territory policing agencies to make sure that we properly take the information that is available from AUSTRAC, that we consider the role of the ATO, ASIC and APRA and various other regulatory bodies as well as, obviously, Customs to essentially surround our targets with the greatest powers that are available. It is not simply a law enforcement solution here.

Mr HAYES —Are we fast moving towards a period where it is proper and appropriate for the Commonwealth to show greater legislative leadership either by direct legislation or by sponsoring models and complementary state and territory laws in this regard? I have in the back of my mind the success in establishing the national DNA database and the national fingerprinting library—those things that are Commonwealth facilitated but are nevertheless underpinned by complementary state and territory legislation. For something as significant to society as serious and organised crime, and given the dimensions of it, should we be doing more at a Commonwealth level by sponsoring consistent and uniform legislation in that respect?

Mr Kitson —I think one of the major challenges—and this may sound as though we are chucking up our hands and saying that this is all too difficult—is that there is very little consistency not only in Australia but internationally about how we define what serious and organised crime is. It is tremendously hard to define. We can characterise it as having a number of features: that it is involved in illicit profit; that it has a level of sophistication; and that there are elements of intimidation involved. But the drafting of any legislation to deal with something that is so ill-defined, and is likely to remain a problem that is challenging to define, will continue to frustrate us for some time.

Mr HAYES —Narrowing it a little bit, would bringing it back to unexplained wealth be a start—where there is some consistency amongst the states, territories and the Commonwealth in our application of unexplained wealth provisions?

Mr Kitson —Yes.

CHAIR —On that point, we have heard throughout the hearing—and you explained it then, Mr Kitson—about the difficulty of trying to define serious and organised crime. We have heard that sometimes there is not ‘Murder Inc’ or ‘Crime Inc’ sitting in some office in Pitt St or Collins St. They will be involved and then for two or three years they will not be involved and somehow or other the money gets legitimised. In fact, you used a term that we were not familiar with: ‘professional legitimaters’. Is that what crime is—there is no sort of crime figure who sits there in Pitt St or Collins St and organises things? Is it a bit like that bust a few months ago with the Sergei family with the Griffith connection. They see the exposure of it in the 70s and now 30 years later they are involved in that? Is that how one should look at organised crime—that it is not as continuous as one might think?

Mr Kitson —I certainly would not characterise it as having any kind of coherent or cohesive framework that guides it. There are undoubtedly some significant crime figures or identities, as the media would have it sometimes, who remain and have remained for a number of years significant in their respective domains and who have both national and international connections. I think it is a reasonable picture to paint that there are those who will be active for an intense period and then may be largely inactive or apparently inactive for a longer period. Organised crime at its top end is a patient game. We have seen any number of instances of major importations that will go for months into years where the commodity that the organised crime group initially seeks is not necessarily the commodity that they end up receiving. It is a fluid and dynamic environment—it is why we deliberately use those terms. It is perhaps because it is very hard to pin down what they are doing at any given time.

We have adopted an approach, which we have mentioned to this committee in the past, under the name of Sentinel, which is designed to give us that capacity to understand where those significant nominals exist and how we can best bring to bear the powers of all of the agencies and regulatory bodies that we mentioned a short time ago for a better understanding of what they are doing, how they are doing and to look at where the greatest vulnerability is. As they look for the path of least resistance, we need to equally look for their weak points as well, and that may well be in their tax regimes, or in their company structures or in their facilitators.

Notwithstanding the experience of the Sergi and Barbaro families and other significant names that are probably familiar to the committee, we probably need to step away from the concept of a grand puppet-master somehow coordinating this activity nationally. There are undoubtedly people who, at the flick of a phone switch, can command resources and attention and support across the country and internationally, but I think we would characterise it as being much more entrepreneurial, much more available to anyone who really has the commitment to seek out organised crime profits rather than necessarily being the domain of a select few.

CHAIR —Can you expand on the term ‘professional legitimisers’ and what we would need to know to understand that? The other thing I would like to ask is: in serious and organised crime, are there quite legitimate businessmen and women now involved in that? In the past 20-odd years people have been alleged to be the—you said there is no grandmaster, but there are some legitimate business entrepreneurs that are on the fringe—if not on the fringe then heavily involved in it—and, in a way, laundering the money that way?

Mr Outram —Yes, we see a lot of intelligence that supports that sort of picture. A lot of what you might call the more sophisticated criminals—they are the ones who tend not to get arrested or prosecuted—tend to be at arms-length from the actual transactions in terms of the commodities that are imported or distributed or what have you, and therefore they are harder to the attack. They do tend to hide behind what appear to be legitimate businesses. In some areas they have preferences for particular business sectors and the ACC, as you would be aware, has been doing a bit of work around one or two of those particular business sectors. So they have the ability to distance themselves from the criminal activities and the traditional investigative methodologies to collect evidence of, say, the importation of drugs. It is likely to get some of the gophers and runners and those sorts of people with their hands on the commodities, and they will be the ones who end up facing the criminal briefs, but generally speaking the organisers tend not to be caught up in a criminal brief.

The ‘legitimisers’ that these people use that we see, and we see it through the way that we try and apply our coercive powers, for example, are in the way that they run their businesses. Of course, you would have to say accountants are a really important tool for the conduct of criminal enterprises that generate a lot of money. At the end of the day, we are interested in those that generate the most wealth. How you deal with that wealth—how are you hide who the ultimate beneficiary of that wealth is; the structures you have to put in place both nationally and internationally to do that successfully to avoid detection, so you do not set off the alarm bells, so that if law enforcement agencies do become aware they are going to find it really hard to follow the trail and identify who owns all of that wealth and where it all went—requires some very clever people with in-depth understanding of the legislative regimes of various countries, of the international money system, of financial tools that might be available every day. The financial services sector is legitimately putting new products on the market to help people manage their wealth, but of course those tools can also be used by organised crime. Some of them are extremely complex and it is hard for experts, even in the law enforcement field and probably in the financial services field sometimes, to understand the complexity of some of those products that are out there, so they rely very heavily on accountants.

Of course, like anybody in business, you would rely heavily on lawyers as well for expert advice. I am not suggesting for a minute that that is inappropriate, but it is simply a fact of life. They can afford, because of the money they have, access to the best QCs and others and so of course that gives them an additional layer of protection. So they are some of the difficulties that we obviously face.

CHAIR —What, that they are quite professional?

Mr Outram —Absolutely.

CHAIR —We are not matching them with that professionalism?

Mr Outram —If someone is running a legitimate businesses, for example, that is worth a lot of money, and a lot of that money is moving around the world, then you need to follow the money trails and get the information you need to understand how all of those processes are being affected, the interaction of all the relevant laws around the place. You have to get access to all of the accounts, the profit and loss statements and anything else, and work back to the point-of-sale of whatever it is they are selling legitimately, before you can then to start to say, ‘This is clearly what the net value of this business is and so, therefore, this has got to be undisclosed income.’ I would suggest it is an incredibly complex problem even for a professional accountant to do that, let alone law enforcement officers who do not have access to all of the information they need because it may be hidden across different companies, it may be structured through different corporate arrangements, different directors et cetera. It is the complexity that poses the challenge.

Their ability to navigate through those sorts of so-called criminal enterprise structures and to build them with professional assistance probably gives them something of an edge on law enforcement’s ability to disentangle that, simply because of the amount of resources and time we would need to do that in every case. So it is a question of picking the right targets—that is what we are focusing on—picking the threats that represent the highest risk to the community and the country. That is the approach. We cannot take them all on.

CHAIR —So I assume that, when you get to a case, it is the Commonwealth DPP who is the prosecutor?

Mr Kitson —Yes.

Senator FIELDING —Is serious and organised crime in Australia on the increase?

Mr Kitson —I think it would be very hard to make any meaningful judgement about that. That might sound disappointing coming from an agency charged with the responsibility of estimating our criminal environment, but I referred earlier on to a maturing process of understanding and working with our partner agencies. What we have seen, particularly over the last three to four years, is a much greater understanding of what it is that we are looking at. We might understand something more about the way in which we seek to identify organised crime groups—the networks as they form and unform. I think it would be very easy to look at some of the data we have got, and to say, ‘Yes, it has expanded quite significantly over the last five, 10 years, 15 years.’ But I think what has actually happened is that we have got better at understanding where it is. Would we be in a position in another five years to say, ‘Let’s benchmark against 2008 and see where we stand?’ I do not know because I suspect that, in the next five years, we will also increase our sophistication of understanding how organised crime is operating. We will get more data from our jurisdictional partners; we will get more data from the private sector that will help us to understand parts of it that are probably currently unrecognised as being organised crime activity. Private sector necessarily protects knowledge about its losses and might write off something as a bad debt, which we might understand to be the result of fraudulent activity. I struggle to answer the question in pure terms, but I think that we as a community are now getting better generally at understanding the nature of the problem and in dealing with some of its more serious manifestations.

Mr Outram —Regarding the future, we are engaging with some academics around the criminal economy, as has been reported. That may offer a prospect. If you can get a handle on the size of the criminal economy, that of course may give you benchmarks over time to then estimate whether or not it is increasing or decreasing. That in itself is a challenging proposition but, as I say, we are engaging with some leading academics, talking to them about whether or not we can introduce economic modelling in and around AUSTRAC data, data from the banking sector and so forth. But there is the cash economy, and that is the challenge. We do not see how big the cash economy is. An example that was made public was in our Gordian task force where airline pilots were taking bags full of cash out of the country. They were the ones we saw, but of course we do not know how many of those kinds of transactions are taking place that we cannot see. So it is very difficult to actually pin it down.

Senator FIELDING —What are some of the outworkings of organised crimes that you are looking for? For example, we have just seen again some of the shootings. What is your gut feeling: is it increasing or decreasing? I know it is very hard to say at any one stage, but over a period—you have been going for five years—

Mr Kitson —Six years.

Senator FIELDING —You must have a gut feeling as to whether it is increasing.

Mr Kitson —I suspect the level of sophistication is increasing across some of our more enduring targets—those that perhaps we have had in our sights and in the sights of our predecessor agencies and in the states’ and territories’ agencies for some years. Perhaps the thing that would point to a broad-based increase—and this sounds terribly glib—is globalisation. The rapid spread of technology and communication means that it is really very much easier for a wider range of people to in a sense transact nationally and internationally than perhaps it was five, 10 or 15 years ago. So there would be, I think, an exponential increase in the numbers of people who are probably involved in this. Whether that necessarily increases the level of damage to the Australian economy, whether it diffuses the level of profit available to each of those involved in it, is something that we simply do not understand at this point.

Senator FIELDING —Part of the reason for asking that question is because most Australians would like to know that as well to a certain extent. Then it comes down to what the urgency is to have better tools, better legislation, part of the questions that were asked before. Otherwise the urgency for that dwindles to a low-level issue if it is not increasing. I still think it is important because, frankly, organised crime and serious crime unsettles everybody and makes people feel less sure about how well as a nation we are doing things. So it is a genuine question for me.

Mr Kitson —Perhaps we would see it in these terms: regardless of whether it is expanding or not, we estimated publicly earlier this year that the cost to the Australian economy was at least $10 billion. Our current thinking is that that figure is conservative and that it may be significantly higher than that. In anyone’s language, the loss to the legitimate economy of that money, and that does not necessarily take into account the social costs and the opportunity cost of that, is a significant issue that requires national attention.

Senator FIELDING —Yesterday we have seen the budget surplus decrease by that much. You can see now the interest I think Australia would have been trying to equip and make sure that the right tools are in place. The beauty about having Australia is different states and that is great because a state could actually have a law that could work quite well that we should roll out nationally in a nationally coordinated way to make sure we are doing all we possibly can. So I appreciate your submission.

At some stage I would like the commission to put together a table of each state and the tools they have got to fight organised crime. Obviously one of the things that work against this is civil liberties or privacy, but at the scale underneath on each one of those, and then logically we can look at it and say, ‘Why in the heck aren’t we doing this across the country when we are already doing it in one state?’ Given the amount of dollars and given that we are seeing the budget surplus go, I think that some urgency on this issue. The ACC is the right body to put that together. I can well imagine that it is very difficult being the ACC and having to rely on the states, and telling a particular state maybe what they are not doing as well as they should does not actually help, so it may need this committee to actually recommend some of those things that allow us to get to the bottom of this. I would appreciate it if you could come back and outline that in a table and go through it and maybe weigh up the percentage of effect would have of reducing organised crime within Australia.

Mr Kitson —I think a good deal of work has been done in relation to that and perhaps our colleagues in the Attorney-General’s Department might address some of those issues when they speak to you later this morning. There is within the Commonwealth environment a particular committee that is looking at how we may seek to restructure a national approach to targeting organised crime and that we have perhaps a more rigorous policy framework. But I would prefer perhaps to defer to our colleagues in A-G’s.

Mr Outram —I should say also that there is a coordination occurring across the states under the Australia and New Zealand Police Advisory Agency that was recently established by the state police. We have a seat on one of the subcommittees, the crime committee. The police commissioners have asked for that committee to create a national triaging system, if you like, to determine which groups and individuals represent the highest threat nationally so that we can agree between the states and the Commonwealth on the targets we should take on, based on an agreed risk-threat assessment methodology, so that everyone is actually on the same page.

Senator FIELDING —In addition to that—and I am happy for you to say you are not going to do it, but I think that you have raised some legitimate issues like the financial reporting order type system—perhaps there could be figures in the table about how valuable that would be in fighting organised crime. I know there is a privacy issue there as well if you slap too many of these things on, but I think we need a handle from the experts, who really live and breathe this sort of stuff, to help guide the committee so in the end we can make a decision. I think that would be quite useful. I have one other area to go to, if I could. I don’t know whether you wanted to respond to that first one on the international part, very quickly?

Mr Kitson —In terms of the table?

Senator FIELDING —Yes, the table, adding what is best practice around the world—or not best practice, sorry, but other tools and their percentage of effectiveness.

Mr Kitson —I think we can have a good go at bringing something to bear.

Senator FIELDING —What is the link between serious and organised crime and corruption? Is there any link? It is small, medium or large? I am very interested in this serious and organised crime and its link with corruption, at whatever level you can talk about. I just want to know generally. Is there a link between serious and organised crime and corruption?

Mr Kitson —Corruption is one of the defining characteristics in the way in which the we identify and describe organised crime in the act. We see that corruption is a key facilitator to the most successful enterprises. The way in which we see or describe it is many and varied. It can be through coercion, through turning a blind eye or through the deliberate insertion of people who are sympathetic to a crime group’s aims into an organisation, and it may be those who work in an organisation who wish to work with organised crime. Whether that corruption exists in law enforcement agencies and regulatory agencies or in the private sector is perhaps irrelevant to organised crime. They depend on insider knowledge.

Senator FIELDING —To help a bit, I am a strong believer that any great nation needs to make sure that it has freedom in the political system, the media and the law enforcement area, and any one of those three has any level of corruption—and I am not suggesting there is—causes real problems. I think it is a very tough job. Being in law enforcement is an extreme tough job and very difficult, so I certainly do not want to be sitting here accusing, but I am interested to know about that link. How do we know as a country that we have that in order? How would we ever know?

Mr Outram —I will talk from personal experience. I have been in law enforcement for well over 25 years. Corruption is an ever-present threat when you are investigating organised crime because your operatives, whatever they do at the interface between law enforcement and organised crime—sometimes they are handling informants—are actually developing a relationship with a criminal, or you may have an undercover operative developing a relationship with a criminal. That is the highest risk end of the spectrum. As Mr Kitson said, there is always the risk of infiltration as well. Our greatest asset is our information, and of course that is the biggest prize for organised criminal groups. If they can get that information, they will understand what we are currently doing, who we are doing it on and what our methodologies are. So it is an ever-present risk.

In terms of what we do to mitigate the risk, I think every agency would have their own range of anticorruption measures. We in the ACC have our own. We have an anticorruption framework that we use. We do anticorruption resistance reviews—we borrowed the idea from the ICAC. We talk regularly with ACLEI and the ACLEI commissioner and we have our own internal audit and risk management processes et cetera. I guess that every police force you look at around the country will have their own integrity regime. It sometimes includes an integrity commission type body within the state or what have you. That tends to be the arrangement in Australia and I think that is pretty strong compared to some other countries. There is a lot of oversight. But we should never delude ourselves that it is not an ever-present risk and a threat. You can never be corruption proof in this environment.

Senator FIELDING —Back to the original question, with serious and organised crime is there always an inside person with that? Out of curiosity, is it 50 per cent of the time, 20 per cent of the time, 90 per cent of the time? At any level is it—

Mr Kitson —I think that you would have to describe it as a key feature of how they facilitate their business. I think that it perhaps would be misleading to offer a percentage to you on that.

Mr WOOD —You mentioned the figure of $10 billion before, and I know that has been in the public domain for some time. Is that specifically for serious and organised crime or does that include all crime such as shoplifting?

Mr Kitson —No, serious and organised crime.

Mr WOOD —Have you got any breakdown for that? I assume that most of it would be drugs or drug related.

Mr Kitson —Yes. Drugs are the major illicit profit driver. Very few things can give you the same kind of profit margin that illicit drugs can and the ratio between, if you like, the wholesale or manufacturing cost and the retail cost is so large that it is likely to remain for the foreseeable future as the major generator of criminal profit.

Mr WOOD —What is the budget of the ACC at the moment?

Mr Kitson —Roughly about $87 million.

Mr WOOD —Have there been cutbacks recently with that budget?

Mr Kitson —We have had to take the efficiency dividends that have been applied across the Commonwealth and we have had some tied funding that has lapsed that has taken our funding from somewhere above $100 million down to around $87 million in the next financial year. The appropriation for 2008-09 is actually $96.663 million.

Mr WOOD —And that is for what period of time?

Mr Kitson —For the 2008-09 financial year.

Mr WOOD —And previously it was—

Mr Kitson —That is $2.7 million less than the previous year and that is definitely related to the two per cent efficiency dividend.

Mr WOOD —Where are those cutbacks being made?

Mr Kitson —We have made most of our cuts across all of our program areas. We have had to release some contractual staff particularly in the ICT area. We have found efficiencies in a range of areas including our communications budget, our travel budgets, our fleet budgets and we have looked at some accommodation efficiencies. But we have taken a little bit of a hit in some staffing numbers.

Mr WOOD —What are the staffing numbers? What were they previously and what are they now?

Mr Kitson —We currently have 662 staff. I think, as this committee is aware, our staffing is a reasonably fluid issue in that it goes up and down. We have task force members coming on board and leaving us at any given time. We released something in the order of 50 staff between about June and September this year. The majority of those were non-ongoing, non-contractual staff mostly related to various short-term projects.

Mr WOOD —You say 50 staff were released. Were they the state police officers going back to their own jurisdictions?

Mr Kitson —Some were. A relatively small proportion of those were state jurisdiction staff. Some were invited to return slightly earlier than their projected secondment period to us. Some went at the end of the natural period. But the majority of them were, as I said, contracted ICT staff.

Mr WOOD —But a number too were working on ongoing investigations. Would that be correct?

Mr Kitson —There were some, yes.

Mr WOOD —What happens to those investigations? You have obviously now got less manpower or the investigation goes on hold—

Mr Outram —Before we released anybody we did a thorough evaluation of each investigation—what stage it was at, what the critical tasks were that remained to be done, who was going to do those tasks. A couple of the investigations have had to be re-phased so we have had to allow more time to undertake some of the tasks. So they are going to take longer. In some cases we have had to actually put some of the activities back by quite some time. But also we have been to the board and we have downsized our menu of work so we are not taking on as much work as we were previously. When we finish an investigation we are not automatically renewing with a new investigation.

Mr WOOD —I am hearing concerns privately about the concerns of the ACC when you have investigations ongoing with teams established and the next minute members are required to leave that team for budget cuts. How devastating for morale is that for the team environment?

Mr Kitson —It is inevitable that when people see their colleagues go, and particularly if they have to pick up some of their work that their departed colleagues might otherwise have done, it increases the pressure on the remaining staff members, and I do not doubt that that would have an adverse impact on morale, but the ACC has a tremendously committed workforce, and it is not a workforce that we would seek to abuse by simply saying, ‘Well, you just have to pick up the slack.’ As Mr Outram just noted, we have realigned our work, we have cut back where we can and we have reduced the work take-on issues. I think it is fair to say that the vast majority of ACC staff have remained incredibly committed through what has been a difficult period for the agency for reasons that, as this committee is aware, are not entirely associated with the budget.

Mr WOOD —I suppose that the point I am making is that we are hearing that we have $10 billion which serious and organised crime is reaping from the Australian community each year and that your budget in 2008-09 is $96 million, an actual cut of $2.7 million. Obviously this cannot be good when it comes to fighting serious and organised crime. I personally find it devastating to know that, when we should actually be putting more funding into fighting serious and organised crime simply because of the figures you are talking about, there are members being sent back to the state jurisdictions and investigations not necessarily being put on hold but, I think you said, some going on the backburner and others not being picked up. What are your comments on that?

Mr Kitson —We have to adjust the menu of work according to the budget that is available, and we have done that. We are continuing to focus on the most serious forms of organised crime. We have a range of other tasks before us, and we will continue to deliver those according to the budget that is available. Like all agencies, we would do more with more budget, but our job is to work within the budget that is given to us.

Mr WOOD —Moving on to what is happening around the world and looking at the US, Canada and the UK—which I see discussed in your submission—what type of legislative arrangements do they have in fighting serious and organised crime? I heard you talk about Ireland before. Are there others, like the RICO laws, which you would be recommending to this committee? At the end of the day the committee has to put recommendations in its report, so are there things we should be looking at overseas?

Mr Kitson —Yes, I think that it would be useful for the committee to benchmark against overseas practice. Our experience from having gone through a similar exercise is that there are not ready or easy parallels with the Australian environment, partly because the nature of the criminal economy in each of the other international domains is different. They have different sorts of land border arrangements that affect the way in which crime operates there, particularly in the European experience, and they have different sorts of people movements—again, in the European experience. We would continue to point to the UK’s legislation as having the greatest potential applicability here, not necessarily because we see that the crime environment is particularly similar—there are, I think, a number of similarities, but I do not think that means that it is necessarily an identical environment—but because of the way in which they have approached the same challenge that we are now facing about targeting the highest end of organised crime, the high-risk money flows. Their solutions to that seem to us to have some applicability here.

Mr WOOD —What about the RICO laws? Have you looked at those?

Mr Kitson —We have.

Mr WOOD —Can you explain how they work and, in your opinion, the advantages or disadvantages? Does that put you on the spot?

Mr Manning —I am not sure that I could give you a full and complete explanation of that off the top of my head.

Mr Brady —While Mr Manning is gathering his thoughts, one of the difficulties with that type of legislation is that it revolves around the definition of an organisation. Given that we predominantly see an entrepreneurial environment for serious and organised crime, a lot of your attention is focused on defining something which may not exist. It also gives an opportunity for or reinforces that entrepreneurial coming and going.

It is fair to say that the deployment against, say, the Griffith type groups in the past was more of a set piece deployment against a defined organisation, and maybe some of that has given rise to the sort of entrepreneurial activities that we now have. That is one of the major drawbacks of the RICO legislation. I know that a number of jurisdictions in Australia have looked at it over time and I think New Zealand has looked at it as well.

Mr WOOD —In your submission, when talking about OMCGs, you say:

They present a significant threat to law and order at a jurisdictional level and have national and international links that will ensure that they feature in any list of high risk crime groups for the foreseeable future.

From reading that it is obvious that you are greatly concerned about OMCGs and their involvement in serious and organised crime.

Mr Kitson —Yes. OMCGs continue to feature in the Australian criminal landscape; of that there is no question. We would make a distinction between the operation of those groups as networked entities and the criminal enterprises of a number of the significant individuals within those groups. There is no doubt that in some instances those individuals operate entirely as individuals. There are instances where some of them operate as individuals carrying perhaps the threat of menace that goes with the OMCGs and there are instances where certain chapters, and perhaps the whole club, have a network of criminal activity which ranges from intimidation, extortion and violence through to involvement in the manufacture and distribution of some illicit drugs. I think it is difficult to characterise them as belonging to any particular sector. It is true to say that in any analysis of some of the nationally significant crime figures you will find people who have associations with outlaw motorcycle gangs, but I do not know that that would necessarily mean that you would characterise the outlaw motorcycle gangs themselves as being the primary criminal threat in this country.

Mr WOOD —We had evidence from Superintendent Hollowood in Victoria and, when asked about OMCGs, he said they do not appear to be high on the radar compared to other serious crime groups. Why are we hearing evidence from you that is different to what we heard in Victoria? Is Victoria not a problem, because that is what they are saying down there?

Mr Outram —I think all groups are different; that is what we are seeing. There are some outlaw motorcycle groups who probably do not present anywhere near as high a threat as others. There may be a regional dimension to that. Some groups behave in a more traditional OMCG way. Their behaviours are more traditional. Among others we are seeing more recently, some groups are demonstrating quite sophisticated corporate type criminal behaviours, and there are individuals within some groups who represent individually a significant threat. They are generating significant wealth, primarily through drug manufacture and distribution, as Kevin said. They have networks with other criminal groups outside the OMCG sphere, so I can understand it is really very difficult to look at OMCGs as some sort of homogenous threat. Each group will have individuals who represent different levels of criminality and threat, and they have to be looked at separately, in my view, to establish what the actual threat is within the group. It may come down to one individual.

Of course, what the OMCGs do is give those individuals a ring of protection, if you like, and a presence that probably suits their criminal enterprise in terms of intimidation, fear and those sorts of things, and maybe access to violence and arms. Some jurisdictions, I think, would see the OMCG threat as being important because it is important to the community—it is a very visible criminal group—whereas, as Mr Kitson said earlier, some groups are not so visible, and that is maybe why some jurisdictions are focused more on them than on others. Within each jurisdiction, though, I would respect the jurisdiction’s view of which groups represent the highest level of threat in terms of organised crime.

Mr WOOD —Thank you.

Senator POLLEY —Apart from the fact that we are always chasing our tails as far as criminals are concerned, I will take up the deputy chair’s position about putting more money into an agency such as yours and say the question of whether we are going to reap any more rewards financially is still a question that no one can answer.

Just in relation to following up on the outlaw motorcycle gangs, it has been confusing to go to various states and hear evidence about, say, 18 gangs that they know of but only three of them have links to organised crime. In relation to what has happened in South Australia in the legislation they have brought in, can you give us an overview of the ACC’s position on that legislation? Once again, no-one wants to be critical and no-one wants to prejudge the outcomes of that legislation, so can you give us an overview from your perspective?

Mr Kitson —I fear I may disappoint you here because I am going to join the chorus of voices who do not want to offer critical comment or to call too early the success or otherwise of the legislation. As you are aware, it is a very recently applied piece of legislation. It seems to us that the South Australian legislation is very much a matter for the local jurisdiction. It is perhaps easy to see the rationale for their development of that piece of legislation and their intent to apply it. Our perspective nationally is that it would be tremendously hard to replicate that across the national environment and that to have Commonwealth legislation of similar impact would be unwieldy and perhaps difficult to maintain. As we said earlier, the majority of our targets do not readily self-identify as being organisations and I think one of the risks that we see in any move to proscription of any sort is that you simply change the nature of the target and perhaps arguably make it more difficult for you to identify the targets that you are most interested in.

We are interested to see how the South Australian experience develops. We are particularly interested to see what impact it might have in neighbouring jurisdictions. I think others have given evidence before this committee about concerns about a displacement effect across state borders into, say, Victoria, Western Australia and perhaps into the Northern Territory.

Senator PARRY —And Tasmania.

Mr Kitson —And Tasmania. But if we see any of our crime group targets, OMCGs or otherwise, as being confined to a particular jurisdiction then I think we are missing the point. These people are highly mobile and not in this case simply because they have access to motorbikes but simply because they recognise no borders. I think anything that confines their activities in one particular sphere, whether that is geographical sphere or a regulatory sphere, will cause them to shift the focus of their activities. The dollar profit is such an attractive lure for them that they will simply reinvent and find a different pathway to achieving the dollar at the end of the day. We know that New South Wales has some legislation which has, I suppose, elements of the South Australian legislation. I think New South Wales probably argues it has one of the stronger anti-gang or anti-group type structures. I think there is some effectiveness in their approach as well as in the South Australian approach.

Senator POLLEY —I think you covered a couple of questions I was going to ask there. From the public’s point of view, for them to have confidence that organised crime is actually being attacked and that they can have confidence in where their taxes are going, don’t there need to be more uniform laws across the Commonwealth?

Mr Kitson —I pointed earlier on to the potential benefits of harmonised legislation. It would undoubtedly bring some benefits, but I suppose that is a matter for the parliament to contemplate.

Senator PARRY —Parliaments in general.

Mr Kitson —Parliaments, indeed. If you were to take a highly theoretical view, yes, standard legislation across the country would make our lives a good deal easier rather than having to interpret state legislation to look at the complementary legislation the ACC has in the states and territories. It would make a number of investigations and potentially some of the prosecution processes a good deal more straightforward.

Senator POLLEY —On internet fraud and also pornography and those sorts of things, what sort of resources does ACC put into that part of organised crime?

Mr Kitson —We do not specifically target internet fraud or pornography, except where it is an element of focus on other activities. Fraud forms part of our financial crimes special investigation and we can attack or investigate or inquire upon any of those areas where we might see internet fraud being committed. But, broadly speaking, the high tech crime area—if I can characterise it thus—is the responsibility of the Australian Federal Police, and we will work with them as appropriate. But if we were to observe or identify a particular instance of internet fraud taking place the likelihood is that we would refer it to either the jurisdiction in which it was taking place or to the Australian Federal Police. In pornography our major interest there has been in the context of the National Indigenous Violence and Child Abuse Intelligence Task Force.

Senator POLLEY —Moving on to the Australian Criminal Intelligence Database, can you give us an overview of how that works and what access states and territories have to the database.

Mr Kitson —ACID sits as the sole national criminal intelligence repository. It is important to make the distinction between criminal intelligence and criminal records. The criminal records information is held elsewhere—with CrimTrac and others. It is perhaps best described as a place where law enforcement agencies and a relatively select number of other agencies can go to search nationally held information about a particular crime type. Some jurisdictions use ACID as their sole intelligence database, so it will include all of their intelligence from street-level crimes to relatively—if I can take the risk of describing it thus—insignificant crimes compared with, say, nationally significant crimes. But it also contains information about things like clandestine laboratories, and we will include information about some of the major crime figures.

We encourage access to ACID by all law enforcement police officers and non-police officers where they are involved in, say, intelligence activities. A good deal of the law enforcement intelligence work around the country is conducted by non-sworn officers, so we do not restrict access to sworn officers. There are vetting procedures that apply to access to ACID and we have a range of audit systems that allow us to make sure that information is being accessed and used appropriately.

We have invested heavily in the last few years and particularly used a good deal of government funding to enhance ACID to make it ‘the’ national repository for law enforcement intelligence information. The tracking of figures over the last two years in particular shows a significant success in making it precisely that.

Senator POLLEY —When we were in Tasmania, the state that has less organised crime than any other, we found that they also use the resources of the Victorian Police Force. At a time when money is in short supply—you have had to take the same dividend cut as every other Commonwealth department—is there scope for the Australian law enforcement agencies across the board to better utilise the resources they have and to perhaps have more specialised units, rather than all police forces in all jurisdictions try to cover everything and use the same amount of resources?

Mr Kitson —If we take the specific area of ICT, yes, I think there are some compelling arguments for greater collaboration, particularly when we are all investing in major new systems as well, which we all inevitably need to do to keep pace with technology and with the demands of acquiring, holding, using and appropriately managing increased volumes of datasets. The ACC has worked with some of its Commonwealth partners to examine systems that might apply across Commonwealth law enforcement agencies. We have talked to Customs and to the AFP about investing jointly in new systems.

In terms of national approaches, we have used a lot of the funding that we had arising out of the review of aviation security and policing, otherwise known as the Wheeler review, to help jurisdictions to contribute to ACID to improve connectivity so that we would overcome some of the obstacles of incompatibility of technology and language used in the databases so that there is a seamless transition between the databases. As long as we have our current system of government, one of the most efficient ways of doing things is to make the existing systems talk to each other more effectively. The scale of enterprise that would be required to dispense with the existing systems and replace them with a whole national framework would be beyond measure, I think.

Senator POLLEY —In regard to uniform laws, you have looked at the US, which has quite a history of experience in organised crime. They must still face the same sort of challenges with their states’ legislation, because it appears to differ in every state I have looked at recently. So surely there have got to be some lessons we can learn from the US and even from countries throughout Europe.

Mr Kitson —I would like to argue that we are perhaps considerably better placed than our American colleagues in that we do not have the vastly fractured law enforcement system that they have. They face a very much greater number of complementary and competing law enforcement agencies. Some of the questions that we touched on earlier about RICO legislation and the difficulty in identifying, characterising and describing an organisation are evident in the American experience. It is, I think, partly what has caused law enforcement here to step away from what is a tempting idea in principle to concluding that in practice it would be immensely difficult to apply.

In the context of the way we operate, we do constantly look at how others are doing the business. This morning we have characterised organised crime as being complex, sophisticated and ever changing and we have described our own responses as evolving and maturing, but part of that process is recognising that we really do not have all of the answers here. We looked quite extensively at the American systems. A couple of our senior officers spent a good deal of time in the States, in Canada and in Europe last year looking at Europol systems and at different intelligence agencies, including those that trespass into the national security space, and we have taken some of the lessons out of that and are currently applying them across our own systems and our own approaches.

In terms of the legislation, it is part of what informs us in our view that we do not seek major change here but perhaps a refreshed and more robust commitment to the existing powers that we have available to use. We sit before the committee as an agency that holds considerable coercive powers and we believe that when they are appropriately used they can deal with many of the issues that might otherwise require separate legislation.

Ms LEY —I have just one question as we are close to the end of our session. You mentioned your broad support for the UK legislation. Following on from Mr Wood’s questions, how would you see a Serious Crime Prevention Order operating with organised crime in the Australian community? Can you paint a picture of what effect it would have on the group? Also, how would it be seen by the public?

Mr Outram —I will answer it at an operational level while Michael gets to the more legal area. We talked earlier on about the complexity of the business structures and we are yet to see the success or otherwise of the UK legislation. But as I understand it, it works through the civil court process. It seeks to identify elements of the business structures of the organised criminal group and to put a specific intervention in place. The examples that were given to me included a rogue firearms dealer who was diverting firearms off the side back into the community. They can prevent that person from doing business with specific people or from attending at specific places to do business and so forth. If you were to apply that in the context of, for example—and this is hypothetical I might add—a rogue accountant, in theory you could try to put an intervention in between the criminal enterprise and that rogue accountant to force the criminal enterprise to shop elsewhere.

What we were attracted to was the philosophy that it is based on the level of risk to the community, that it is about preventing crime rather than anything else and that it is based on the civil standard, but that obviously requires a lot of thought about the kind of information you put before the court. So there are practical issues that would have to be thought through. But ultimately it is about prevention and it is about getting into those business structures and that is why philosophically we were attracted to it. I might ask Michael to comment more on the legal aspects.

Mr Manning —I would add there that, as is evident from the examples that Mr Outram has given, it is essentially a system directed at isolating individuals from the criminal environment so that it does not attack the group, as a group, but it attacks notable points in criminal activity. I think that is consistent with the sort of philosophy we have been talking about here this morning in terms of identifying key targets—that it identifies the key figures, key facilitators and so forth and seeks to fashion directions in a fairly free way to identify the things we need the individual not to do in order to make them cease to be an effective part of the criminal environment—and directing an order to those particular activities.

Ms LEY —So its premise would be the restriction not of movement of the individual but of certain transactions or liaisons that they might make and its burden of proof would be civil rather than criminal. It sounds enormously difficult to get across the line of public approval. Can you give any other examples of how it might work here?

Mr Outram —I think the firearms market was a good example because obviously the link to community harm is far more visible there. That is why, as Mr Kitson said earlier, whilst we are interested in this legislation philosophically, I think it is too early to see how successful it is going to be, even in the UK context, and we will be watching over the next one or two years as cases progress through the courts. In terms of the community perception of it, I think it all depends on the trigger point—what the information is. If it is a post-conviction process—somebody is convicted for a specific offence and then it triggers this sort of mechanism—that might be more palatable; I do not know. We recognise that there are some inherent difficulties and it does not automatically transfer into our context but, as I said, philosophically, because it attacks the business structures, we think that the idea has some utility and warrants some possible further investigation.

Ms LEY —When do you think we will have enough information from the UK to give us some idea of its effectiveness?

Mr Kitson —I imagine we would want to see a good couple of years worth of operation. It may well be that we would still be largely relying on a small number of case studies, even at that point. I suspect, in reality, this is a much longer process for them to be able to come to a judgement for themselves about its value in their context.

Ms LEY —Would it have to be state based or federal based legislation? Could it be federal here?

Mr Kitson —My sense is that it would be enormously difficult to administer at a federal level.

Ms LEY —So it would most likely be stated based?

Mr Kitson —I would think so.

CHAIR —There being no further questions, I would like to thank you, Mr Kitson, and your officers for coming along today. We will see you on Monday.

Mr Kitson —Indeed. Thank you.

[9.59 am]