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Tuesday, 25 October 1977
Page: 2333

Mr MALCOLM FRASER (Wannon) (Prime Minister) -by leave-On 21 August 1974 the previous Government established a Royal Commission on Intelligence and Security and appointed the Honourable Mr Justice Hope as the royal commissioner to inquire into and make recommendations on the intelligence and security services the nation should have available to it. The Government has now completed its consideration of the eight reports presented to it by the royal commissioner.

The Royal Commission's Eight Reports

The first report outlines the procedures followed by the Royal Commission and requires no further comment. The second report makes findings and recommendations on security checking and a security appeals tribunal. The third report dealing with the machinery for ministerial and official control, direction and coordination of Australia's intelligence and security services was the subject of the statement I made in the House on 5 May this year. At that time, I announced the appointment of a Ministerial Committee, supported by a Permanent Heads Committee, to provide a better system for co-ordinating the intelligence and security services.

I also announced our decision to establish the Office of National Assessments and legislation to establish that Office has subsequently been passed by Parliament. The fourth report specifically relates to the Australian Security Intelligence Organisation. The fifth and sixth reports relate to particular specialist intelligence collection agencies. The seventh report, written by a constant to the Commission, is an historical study of Australian intelligence and security services. The eighth concerns administrative arrangements for the storage and custody of the Royal Commission's records. I will not be commenting further on these last two reports in this statement.

In accordance with undertakings previously given to the House, I am tabling those parts of the Royal Commission's reports which the royal commissioner considered can be made public without prejudice to national security and announcing the Government's decisions on them. The third report was in an abridged form prepared by the royal commissioner and was tabled on 5 May. I now table the first report, the second report other than Appendices 2-A, 2-C and 2-F, and volumes 1 and 2 of the fourth report. For the first time the Parliament and the people of Australia are being authoritively informed of fundamental considerations relating to Australia's national security. For the first time Parliament and people can read the careful assessments of an independent judicial authority who has had full access to all the information and the time and resources to thoroughly analyse them.

The Royal Commission's Basic Judgments

Mr Speaker,the Government has accepted the basic judgments of the Royal Commission on Intelligence and Security and has implemented a sweeping range of reforms to achieve them. In essence Mr Justice Hope's basic findings are these:

(I)   AUSTRALIA'S NEEDS FOR INTELLIGENCE AND SECURITY SERVICES

Australia needs a highly professional system of intelligence and secunty services, and this need is more apparent than ever before. Australia needs intelligence of quality, timeliness and relevance.

(II)   THREATS TO INTERNAL SECURITY

Such a professional system should include a security intelligence service to investigate and provide intelligence about threats to the internal security of the nation. Australia faces, and has faced or may face, threats to its internal security from various types of action to which I shall later refer.

(III)   CIVIL LIBERTY AND NATIONAL SECURITY

A balance must be struck between the need to respond decisively to this threat and the imperative of preserving Australia's open processes of debate, discussion and commerce. Mr Justice Hope has recognised 'that a balance between the rights of individual persons and the preservation of the security of Australia as a nation is no simple or easy thing to achieve'. (Fourth report, paragraph 10). He concludes, quoting from the 1975 Rockefeller Report on the Central Intelligence Agency: '. . . in the final analysis, public safety and individual liberty sustain each other'. (Fourth report, paragraph 10).

(IV)   PROTECTION OF CONFIDENTIAL INFORMATION AND SECURITY CHECKING

Australia has classified information which the Australian Government has a duty to protect in the interests of the nation. These secrets are not limited to matters of national defence or foreign policy; they extend to matters relating to national resources and the national economy; their disclosure would prejudice Australia's national security. Thus the security checking of public servants should continue to be undertaken subject to a series of basic reforms.

(V)   THE NECESSITY FOR SECRECY

The actual activities, programs and priorities of the intelligence and security services should not be revealed, as to do so would be to jeopardise national security.

(VI)   COMPLIANCE WITH THE LAW

The intelligence and security services should always comply with Commonwealth and State laws.

(VII)   PARLIAMENTARY RESPONSIBILITY

The intelligence and security agencies should continue individually to be subject to ministerial responsibility, and in addition should be collectively subject to central oversight and coordination by senior committees of Ministers and permanent heads. Considerations of the nation's interest should prevail over the full range of the agencies activities, and to this end the Government and the Opposition should develop a bipartisan approach to intelligence and security matters.

Australian Security and Intelligence Organisation

In- his fourth report concerning ASIO Mr Justice Hope's basic finding is that Australia needs and should have a security intelligence service to investigate and provide intelligence about threats to the internal security of the nation.' (Fourth report paragraph 657). He stated: . . On the basis of what has been submitted or provided to me, I find that Australia faces, and has faced or may face, threats to its internal security . . . and that ASIO should investigate . . .

Espionage, which is the covert collection of (generally secret) intelligence.

Active measures' a general expression to cover a variety of activities by which a power can weaken another power or strengthen itself vis-a-vis that other power, including the establishment of agents of influence ' the dissemination of disinformation' other forms of clandestine or deceptive action subversion, which is activity whose purpose is directly or ultimately, to overthrow constitutional government, and in the meantime to weaken or to undermine it.

Sabotage, which is the destruction, damaging or impairment of defence installations, etc, which would be useful to an enemy or a foreign power.

Mr JusticeHope continued:

I will now briefly summarise the royal commissioner's comments on two of the major areas of threat- espionage and subversion.

Espionage

Mr JusticeHope rejected the views that some people had expressed to him that espionage was not a significant problem in Australia. The royal commissioner especially warned that 'Australia must not be so naive as to think that it has some exemption from clandestine operations or that it need not take steps to protect itself against them'. (Fourth report paragraph 41). The royal commissioner stated that this conclusion was substantiated 'by a large amount of intelligence held by ASIO which cannot be made public'. (Fourth report, paragraph 41). However, in the royal commissioner's words, there are 'some matters which can be stated publicly and which I'- that is the royal commissioner- 'regard as supporting the conclusions I have come to.' (Fourth Report, paragraph 40).

The royal commissioner notes the considerable evidence of espionage against Australia during the Second World War and the Petrov Commission's findings that from 1943 until Petrov 's defection, Union of Soviet Socialist Republics intelligence agents had been operating in Australia. He further says that independently of the Petrov Commission's findings he was- these are his words- 'completely satisfied that the USSR intelligence services were operating in Australia up to the time of Petrov 's defection and that a number of Australians, some consciously and some unconsciously did reveal information about classified material to USSR intelligence officers or their agents'. (Fourth report, paragraph 40). He refers to the case of Mr I. F. Skripov. Mr Skripov re-opened the Soviet Embassy in 1959 and was expelled in February 1963 because of his clandestine intelligence activities.

The royal commissioner states that the numbers of intelligence officers now operating clandestinely in Australia 'are much larger than in the 1940's and 1950's and are growing'. Again these are his words: 'For example, the proportion of USSR intelligence officers represented in that country 's diplomatic mission in Australia is consistent with overseas estimates of USSR representation in the USA and NATO countries'. (Fourth report, paragraph 40). In this connection, the Royal Commission quotes an estimate of Professor Leonard Shapiro, Chairman of the Institute for the Study of Conflict that . . around half of those (Soviets) accredited as diplomats to NATO countries are usually engaged in intelligence operations of one kind or another . . . (Fourth report, paragraph 40, footnote 4-18).

Subversion

The royal commissioner states:

ASIO -Functions and Performance

In considering threats such as these Mr Justice Hope also examined various ways of establishing a security intelligence service. He concludes that The essential conception of ASIO as an intelligence, and not an executive agency, is right for our national circumstances.' (Fourth report,

Paragraph 660). He notes that ASIO 'maintainsiaison both here and abroad with the internal security services of several friendly nations' and he concludes: 'These relationships contribute significantly to ASIO's overall efficiency'. (Fourth report, paragraph 707). Again those are the royal commissioner's words.

The royal commissioner was criticial of some aspects of the past performance of ASIO. The Government is determined that ASIO's performance should be beyond reproach. We have therefore accepted all of Mr Justice Hope's major recommendations and we propose to amend the Australian Security Intelligence Organisation Act accordingly. The major effect of those amendments will be to ensure that ASIO's activities will be expanded to enable it to investigate and to report on activities which threaten Australia's internal security. ASIO will have a statutory responsibility to advise the Government about the following:

Espionage

Sabotage

Subversion

Terrorism

Domestic activity related to violence abroad and what the Royal Commissioner refers to as active measures'.

Mr JusticeHope has updated ASIO's functions to enable it to respond to the reality of the 1970s. The relationship between the Director-General of Security and the Government will be defined in accordance with the royal commissioner's recommendation based on his finding that, under the existing ASIO Act, there are legal doubts as to the extent to which the Minister can five lawful directions to the Director-General of ecurity. The Director-General of Security will be accountable to the Attorney-General and the Prime Minister.

The royal commissioner considers that the legal powers exercisable by ASIO regarding its collection of intelligence should be clarified and the responsibility for their supervision and control identified. Subject to the conditions specified by the Royal Commission ASIO may obtain warrants from the Attorney-General for purposes relevant to security to facilitate the acquisition of information about intelligence activities threatening Australia's security. This is consistent with the pattern established in other countries with a Westminster system of government. Mr Justice Hope said:

For example, in regard to ASIO's use of telephone taps the judge comments:

In the performance of its statutory responsibilities ASIO will carefully observe the principles delineated by the Royal Commission:

(A)   That it operates within the terms of its statute and is concerned only with matters relevant to security.

(   B) That it always complies with the law.

(C)   And that it observes standards of propriety by not intruding on the rights and freedom of persons except to the extent that the requirements of the nation's security justify, and the law allows. (Fourth report, paragraph 786).

Honourable members will notice that the Royal Commission has made a number of recommendations regarding the policies and practices to be followed by the Government and ASIO. The Government has accepted these. Significant features of them include: The Leader of the Opposition shall be kept informed about security matters and shall have access to the DirectorGeneral and his annual classified report. The Government will continue the practice of 'no comment' on allegations about ASIO's activities. ASIO shall not provide security intelligence in any form, either directly or indirectly on an attributable basis or not, to the Press or other media. As the Commonwealth agency responsible for the defence and maintenance of Australia's internal security ASIO is entitled to the confidence and respect of the nation.

I also refer to five recommendations taken from Volume III of the fourth report relating to ASIO's future effectiveness. The DirectorGeneral of Security has advised that these five paragraphs can be made public without prejudice to national security. They are:

I have been advised by the Director-General of Security, Mr Justice Woodward, that he has taken action to give effect to those recommendations of the Royal Commission that concern improvements in ASIO's internal administration and management and generally to all other recommendations which do not call for policy decisions by the Government.

Mr Speaker,I have outlined in broad terms the nature of our reforms. Further details of the action being undertaken by the Governmentwhich are in any event set out as recommendations in the fourth report which I have tabledwill be given by the Attorney-General (Senator Durack), when he introduces amendments to the Australian Security Intelligence Organisation Act.

Security Checking and Security Appeals

The Australian Security Intelligence Organisation carries out security checks for Commonwealth departments primarily in relation to Commonwealth employees but also in a limited way for a range of special cases which the Royal Commission refers to as 'immigration cases'. In the second report, the royal commissioner examines the need for and basis of this security checking process. Mr Justice Hope finds that Australia needs a system of security checks for two main reasons: The serious nature of the security threat to Australia- Honourable members may wish to refer to the second report, paragraphs 12-13 and the fourth report, paragraphs 34-36- and the fact that, as the royal commissioner said:

The royal commissioner reported that the security checking system has not been formally reviewed since the early 1950s, and found that it contains a number of faults, including: The existing security checking categories are too wide. That is, they strain ASIO's resources unnecessarily and are objectionable from a civil liberties viewpoint. There is some confusion about the nature of the security assessment ASIO provides. There has been some blurring of the demarcation between the responsibilities of ASIO and those of departments and instrumentalities. There have been deficiencies in the preparation and content of ASIO's security assessments and the use of them by departments. In this regard, Mr Justice Hope observes that security checking is a complex and difficult task. He said:

The Government has decided to implement a number of reforms designed to overcome the deficiencies in existing arrangements. Principal amongst these reforms are the following: A Security Appeals Tribunal will be established. Steps will be taken to reduce to the minimum possible number the people to be security checked. ASIO's security checking procedures will be revised and improved. From now on, persons who are the subject of adverse or qualified assessments, will be notified of that fact and of the general nature of the supporting information except to the extent that in the interests of national security they cannot be notified in certain special circumstances contemplated by the

Royal Commission. In such special cases the Attorney-General as Minister responsible for the Australian Security Intelligence Organisation Act- not the Prime Minister as Mr Justice Hope proposes- will have to issue a certificate vetoing notification. Persons having been notified of an adverse or qualified assessment will be able to have the assessment impartially examined by the Security Appeals Tribunal.

Mr Speaker,these reforms are designed to make security checking for Commonwealth employees more efficient and most importantly, to reduce as far as possible the intrusion into the private lives of Commonwealth employees. I shall now outline further details of some of these reforms, and also indicate those instances in which the Government has, after careful consideration, modified the royal commissioner's recommendations.

The Security Appeals Tribunal

The royal commissioner has found:

He concluded:

The Government agrees with this view. The Security Appeals Tribunal recommended by the Royal Commission will be established to review adverse or qualified security assessments and any supporting information provided by ASIO relating to such assessments.

The Royal Commission recommended that the Tribunal's review function should be made retrospective to the inception of ASIO in 1949. The Government has given careful consideration to this proposal but has decided that the matters subject to the Tribunal's jurisdiction should be those occurring on or after the date on which the Tribunal is established. We have been advised that there would be legal and substantial administrative problems associated with the royal commissioner's recommendation. There is no Commonwealth statutory precedent for a retrospective grant of a right of appeal against an administrative decision. The comparable appeals system established under the Administrative Appeals Tribunal Act 1975, is expressly stated to apply to decisions given on or after the commencement of that Act. However, the Government has devised certain procedures to give effect to the spirit of the royal commissioner's recommendation.

First, ASIO has been instructed to undertake a review in the manner recommended by the

Royal Commission, of any existing adverse or qualified assessment of persons currently in the employ of the Commonwealth. If in the light of that review, the adverse or qualified assessment is maintained, the person concerned will be notified, and will be entitled to appeal to the Tribunal against the new assessment. Second, the legislation establishing the Tribunal will allow the Government to refer to the Tribunal particular cases of people no longer in the employ of the Commonwealth. The Government intends to exercise this discretion in any case in which it appears a wrong assessment may have been made in the past. The Security Appeals Tribunal will be mainly concerned with Commonwealth employees, except for the 'immigration cases' about which I shall comment shortly. Thus all Commonwealth employees, as that term is broadly defined in paragraph 20 of the second report, will have appeal rights against adverse or qualified assessments.

Legislation will be introduced to establish the Tribunal and, although the Tribunal's findings will generally be advisory, they will be binding in those cases the royal commissioner recommends. The Government has concluded that the Tribunal should have the composition and powers detailed in Part H of the second report except for the modifications I have outlined. The procedures of the Tribunal envisaged by the Royal Commission will be given further consideration. In addition, the panel from which the Tribunal will be constituted will be enlarged to include more than one former public servant and more than one former member of the defence force.

Security Checking

The security checking process will be substantially altered to make it more finely tuned to national security requirements. In contrast with existing practice not all public servants or applicants to the Public Service will be security checked. From now on, security checking of public servants will take place only when it can be reasonably expected that they will require access to classified security matters or areas. In accordance with Mr Justice Hope's recommendations, ASIO's security assessments will vary in accordance with the level of access required. Far more extensive investigation will take place, for example, for persons requiring access to the highest classification than for those requiring access to the lowest. All aspects of ASIO's security assessments will be prepared in accordance with the royal commissioner's recommendations. The royal commission recommended that positions in the Public Service for which security checking will be required should be publicly designated as such. However, the reports do not recommend how this could be implemented. The Government has the matter under consideration.

Immigration Cases

ASIO has provided security checks for the Commonwealth Government in certain immigration cases. The term 'immigration cases' refers to government activity relating to such matters as visas, entry permits, deportation, citizenship and passports. Mr Justice Hope has recommended that the reforms regarding security checking and security appeals for Commonwealth employees be applied to these immigration cases with some minor modifications of detail as necessary. ASIO's investigative work in this area will be directed to protecting the security of the nation and its assessments will be closely linked to judgments about any potential security threat involved. As in all other matters, ASIO's role will be advisory. Australian citizens and persons whose continued presence in Australia is not subject to any limitation imposed by law will have full appeal rights to the Security Appeals Tribunal in respect of these immigration cases. The Government has accepted Mr Justice Hope's recommendations regarding immigration cases and the Minister for Immigration and Ethnic Affairs (Mr MacKellar) will provide further details regarding their implementation at a later stage.

Compensation

The royal commissioner makes a number of observations about the possible payment of compensation in relation to wrong security assessment.

He notes that a wrong security assessment may sometimes cause detriment to the subject of the assessment, although the detriment flows from the consquent action of the employer authority.

The royal commissioner recommends that the Security Appeals Tribunal should have power to report about compensation matters.

However, the Government, having adopted the recommendation of the royal commissioner that the Tribunal will be solely concerned with ASIO's assessments, not executive decisions of government, has decided that compensation matters will be for the Government to determine, not the Tribunal.

Australian Secret Intelligence Service

The fifth report is about the Australian Secret Intelligence Service, ASIS, an agency of the Australian Government the existence of which has not hitherto officially been acknowledged. The Government agrees with Mr Justice Hope's recommendation that ASIS should be publicly acknowledged and on his recommendation the fifth report will not be published as to do so would jeopardise national security. The report has been made available to the Leader of the Opposition as the royal commissioner recommended. The royal commissioner recommended 'that the Government accept the continuing need for an Australian Secret Intelligence Service and that ASIS be retained to fulfil that role '. He reported that ASIS is a ' singularly and well run and well managed agency . . . right in concept for Australian circumstances'. The main function of ASIS is to obtain, by such means and subject to such conditions as are prescribed by the Government, foreign intelligence for the purpose of the protection or promotion of Australia or its interests.

The Government has accepted his recommendation that the Service continue and be responsible to and under the control of the Minister for Foreign Affairs. The funding of ASIS has in the past been secret but, will in future be the subject of a one-Une appropriation like ASIO. ASIS 's capacity to serve Australia 's national interest will continue to depend on its activities being fully protected by secrecy. The Government will therefore adhere strictly to the practice of refusing to provide details of ASIS's activities nor will it be prepared to enter into any discussion on the Service.

The Defence Signals Division

The sixth report is about the Defence Signals Division. On the recommendation of the royal commission this report will not be made pub.lic The Defence Signals Division is an organisation concerned with radio, radar and other electronic emissions from the standpoint both of the information and the intelligence that they can provide and of the security of our own Government communications and electronic emissions. It is an agency which serves wide national requirements in response to national priorities. The royal commissioner found that there were overriding advantages to Australia in co-operation with certain other countries in these matters.

In close conjunction with the defence force DSD provides a capability which is just as much an integral and essential part of a modern defence posture as a capability in air or ground defence or maritime surveillance. That capability is a sophisticated one for which long periods of training and development are required. The royal commission said that 'the preservation of secrecy as to the agency's operations is vital'. This finding is accepted by the present Government. The Royal Commission recommended the retention of DSD, paid tribute to its work and pointed to ways in which the agency could be further developed and improved. It stated:

The Government will pay close attention to the recommendations of the Royal Commission. In recognition of the enhanced status that the Royal Commission recommends should be accorded to the agency it will be restyled as the Defence Signals Directorate. In discussions of intelligence matters, this Government will not provide further information about DSD, nor confirm or deny speculation or assertion about it.

Conclusion

There are a number of matters, particularly those covered by the fifth and sixth reports and parts of the fourth report, which cannot be made public. As I mentioned earlier the royal commissioner has made particular recommendations on publication. All of Mr Justice Hope's reports have been made available to the Leader of the Opposition. In respect of ASIO, ASIS and DSD the Government will maintain its long-standing practice, endorsed by the Royal Commission of not providing information by way of comment, confirmation or denial, on matters affecting security or intelligence

Mr Speaker,these reforms, together with the establishment of the Office of National Assessments and the system of co-ordination and oversight of intelligence and security POliCY announced in my 5 May statement, are of fundamental significance to Australia. They are also of significance in a wider sphere. As Mr Justice Hope states in his third report:

Mr JusticeHope's reports underline the significance of Australia's intelligence and security relationship with non-communist countries, and the importance to these countries of high quality Australian intelligence and security services. These reforms ensure that Australia 's contribution in this wider sphere will be even more effective.

I believe that honourable members will be assured by Mr Justice Hope's reports about the essential and fundamental need for further action by the Australian Government. He has brought to his task a perceptive realism with which he balances the requirements of national security on the one hand with the requirements of personal liberty on the other. He has maintained a standard of excellence in the performance of his royal commission and in the quality of the advice he has tendered the Government. His reports show a clarity of expression and probity of thought which I am sure all honourable members will applaud. I commend my predecessor for the action he has taken in launching the Royal Commission and my Government extends its appreciation to the New South Wales Government for releasing Mr Justice Hope for this major, arduous and important task.

I present the following papers:

Volume I

Volume II.

Ministerial statement, 25 October 1 977.

Motion (by Mr Sinclair) proposed:

Debate (on motion by Mr E. G. Whitlam) adjourned.

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