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Intelligence and Security - Royal Commission - Reports - 3rd Abridged findings and recommendations of, April 1977


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Parliamentary Paper No. 92/1977

The Parliament of the Commonwealth of Australia

INTELLIGENCE AND SECURITY

Royal Commission

Third Report

Abridged Findings and Recommendations

April 1977

Presented by command 5 May 1977

Ordered to be printed 2 June 1977

The Commonwealth Government Printer Canberra 1978

A. INTRODUCTION

My terms of reference are set out in the letters patent. They require me, inter alia: In the light of past experience . . . to make recommendations on the intelligence and security services which the nation should have available to it and on the way in which the

relevant organisations can most efficiently and effectively secure the interests of the Australian people and Government with particular reference to: (d) arrangements for co-ordinating and evaluating the available intelligence; (e) the distribution and use of intelligence material available; (f) the relationship between the intelligence organisations, between those organisations

. . . and departments and authorities of the Australian Government. And: To review the machinery for Ministerial and official control, direction and co-ordination of the activities of the intelligence and security services and make recommendations on

any changes desirable, in particular to ensure that there are clear lines of responsibility and proper arrangements for accountability for funds. 2. Australia has been engaged in intelligence collection and evaluation activities for some years. Thus the questions posed in my terms of reference do not arise in a vacuum. Together, my reports will cover all of the present component parts of the Australian intelligence community both foreign and domestic. I refer to the intelligence collection services including the Australian Security Intelligence Organisation (ASIO) as the ‘intelligence collection agencies’. In addition the intelligence community includes the Joint Intelligence Organisation (JIO) which has intelligence assessment, evaluation and dissemination functions and the National Intelligence Committee (NIC) which has limited responsibilities for overall guidance of the intelligence community and allocation of resources. I refer to each of these bodies as ‘intelligence agencies’.

B. THE INTELLIGENCE FUNCTION

(a) What is intelligence?

3. The Shorter Oxford English Dictionary defines intelligence (in the relevant sense) as: Information, news, tidings . . . A piece of information or news . . . The obtaining of information; the agency for obtaining secret information; the secret service.1

4. The word is one of variable meaning, even to people working for organisations whose function it is to collect, or to assess and evaluate, ‘intelligence’. 5. In his important book on strategic intelligence, Sherman Kent wrote: ‘Intelligence means knowledge. If it cannot be stretched to mean all knowledge, at

least it means an amazing bulk and assortment of knowledge’. Kent says that the kind of knowledge he is talking about is: the kind of knowledge our state must possess regarding other states in order to assure itself that its cause will not suffer nor its undertakings fail because its statesmen and

soldiers plan and act in ignorance.2 6. That part of knowledge is known to the intelligence trade as ‘high-level foreign positive intelligence’. 7. Is there a difference between intelligence and ‘information’? Intelligence is, to

some degree, processed information. It is processed information in the sense that a

1 Third edn, 1974. 2 Sherman Kent, Strategic Intelligence fo r American World Policy (Princeton, NJ, 1966), p. 3.

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lot of different items of knowledge have been put together, tested against each other for credibility and a judgment made on balance as to the truth, or at least the greatest degree of probability of the truth, about some particular situation. It is also assessed as relevant to the consumer; otherwise it would not be provided in ‘finished form. 8. In the trade, people talk of the ‘intelligence cycle’. The steps by which information is assembled, converted into intelligence and made available to users are:

A. Direction Determination of intelligence requirements, preparation of a collection plan, issuance of orders and requests to information collection agencies, and a continuous check on the productivity of collection agencies. B. Collection

The systematic procurement and selection of information pertinent to a given intelligence problem. C. Processing The step whereby information becomes intelligence through evaluation,

analysis, integration and interpretation. D. Dissemination The conveyance of intelligence in suitable form (oral, graphic or written) to agencies needing it. 9. This description illuminates the nature of the process by which intelligence is produced. It also brings out the distinction between so-called ‘raw’ and ‘finished’ intelligence. Even professional intelligence officers sometimes describe as ‘intelligence’ piecemeal items and unprocessed information. For convenience I shall also do so. distinguishing where appropriate between ‘raw’ intelligence, on the one hand, and ‘finished’, ‘evaluated’ or ‘processed’ intelligence, on the other. I include both overtly and covertly obtained information in the expression ‘intelligence’.

(b) The uses of intelligence 10. In explaining the purpose, or use, of intelligence, Sherman Kent starts from the premise that: our state, in order to survive in a world of competing states, must have two sorts of

state policy. The one is its own self-initiated, positive, outgoing policy, undertaken in the interests of a better world order and a higher degree of national prosperity. The other is its defensive-protective policy necessarily undertaken to counter those policies of other states which are inimical to our national aspirations. This second kind of policy might better be called our policy for national security.3 11. For the first kind of policy, which he calls ‘positive policy’, the ‘implementers must be able to select the proper instrumentality of suasion . . .’ It follows that:

our policy leaders find themselves in need of a great deal of knowledge about foreign countries. They need knowledge which is complete, which is accurate, which is delivered on time, and which is capable of serving as a basis for action.4 12. The Rockefeller Commission also reports that policy makers and decision takers need intelligence to make their plans and decisions soundly:

Intelligence is information gathered for policy makers in government which illuminates the range of choices available to them and enables them to exercise judgment. Good intelligence will not necessarily lead to wise policy choices. But without sound intelligence, national policy decisions and actions cannot effectively respond to actual

3 ibid., pp. 4-5. 4 ibid., p. 5.

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conditions and reflect the best national interest or adequately protect our national security.5 13. For the second, or ‘national security’, policy, knowledge is needed about ‘the nature and weight of the instrumentalities which . . . other countries can summon

[on] behalf of their own policies, and we must know the direction those policies are likely to take’ ,6 Put another way, information is needed of the other side’s capabilities and intentions in situations approaching war or possibly leading to it.

(c) The attributes of intelligence 14. In intelligence, the key issues are its ‘quality, timeliness and relevance’. 7 These are attributes which are needed whether the intelligence is about internal domestic situations and events or about foreign matters. The same attributes are needed whether the intelligence is being obtained for policy makers considering new national

initiatives or considering actions or plans for national security. Each attribute makes intelligence more useful to policy makers, and that is the purpose of intelligence. (i) Quality 15. To ensure its ‘quality’,intelligence on a subject must be complete and accurate. 16. Unless all the relevant information is marshalled in assessing intelligence on a subject, the quality of the finished product may suffer. Covertly obtained intelligence should not be assessed in isolation from overtly obtained intelligence. As

Professor Trevor-Roper observed: Secret intelligence is the continuation of open intelligence by other means. So long as governments conceal a part of their activities, other governments, if they wish to base their policy on full and correct information, must seek to penetrate the veil. This

inevitably entails varying methods. But however the means may vary, the end must still be the same. It is to complement the results of what, for convenience, we may call ‘public’ intelligence: that is, the intelligence derived from rational study of public or at least avowable sources. Intelligence, in fact, is indivisible. The greater part of it must

always be acquired by open or official methods. Only a relatively small area requires secret penetration, or espionage. Nevertheless that small area may be vital . . . it must always be continuous with ‘open’ intelligence.8 17. The need to assemble all the relevant data in one place leads to the conclusion that there must be a central assessment capability. The lack of one is believed to have cost the US dearly at Pearl Harbour, because, although it had intelligence in advance

that should have enabled it to draw an accurate picture of Japanese intentions and capabilities, it was not assembled in one place for assessment and dissemination. According to the Church Report: The Pearl Harbor intelligence failure was the primary motivation for establishing a

director of Central Intelligence.9 18. To ensure intelligence is accurately assessed and marshalled, the assessment process should be objective: ‘Anyone concerned with national policy must have a profound interest in making sure that intelligence guides, and does not follow,

national policy’, Dr Kissinger told the US Senate in 1973.10

5 Commission on CIA activities within the United States, Report to the President (Washington, 1975, the ‘Rockefeller Report’), p. 6.

6 Kent, op. cit., p. 6. 7 US Senate, Final Report o f the Select Committee to study Governmental Operation with respect to Intelligence Activities (Report No. 94-755, Washington, 1976, the ‘Church Report’), Book 1, Foreign and Military Intelli­ gence, p. 266. 8 Hugh Trevor-Roper, The Philby Affair — Espionage, Treason, and Secret Services (London, 1968), pp. 66-7. 9 Book 1, op. cit., p. 73. Emphasis added.

10 US Senate Committee on Foreign Relations, Hearings, Nomination o f Henry A. Kissinger, 93rd Congress, 1st Session (Washington, 1973), pt 1, p. 81.

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19. Speaking recently on foreign affairs, the Prime Minister told the Parliament that the first requirement for an effective Australian role in international affairs was a realistic assessment of the state of the world in which Australia must act. He added: That assessment must, as far as possible be free of self-deception, self-delusion. We

must be prepared to face the world as it is, and not as we would like it to be.11 20. Or, as a former Foreign Minister recently put it, we need ‘to be sure that we are seeing the world whole, and seeing it unblinkered by glasses of rosy or another tint’.12 21. The obstacles to achieving objectivity in the Australian system are referred to in other parts of this report. But it may be worth remarking here, with Walter Lippman:

The only institutional safeguard (for impartial and objective analysis) is to separate as absolutely as it is possible to do so the staff which executes from the staff which investigates. The two should be parallel but quite distinct bodies of men . . . responsible to different heads, instrinsically uninterested in each other’s personal success.13 22. Policy makers must have confidence in the finished intelligence on which they are to base their decisions. Put another way, the process of assessment and dissemination of intelligence must be, and be seen by the consumers to be, objective.

23. It has been drawn to the Commission’s attention that objectivity is by no means everything. Assessment calls for a quality of refined judgment on a mass of material about international matters very little of which is clear fact. But the quality of intelligence assessments made by people of sound perception and interpretative ability is likely to suffer if the task is not performed objectively.

(ii) Timeliness 24. Intelligence must be timely, in the sense that it must reach decision makers in good time for them to act in the knowledge of what is conveyed. Intelligence, as fork now ledge, has always had particular relevance in military and domestic security matters. It can give the military commander or domestic security policy makers the great advantage of not being taken unawares. That was recognised by the Ancient Chinese writer on war and intelligence:

the reason the enlightened prince had the wise general conquer the enemy whenever they move and their achievements surpass those of ordinary men is foreknowledge.14 25. Speaking of ULTRA, the signals interception operation that greatly helped to decide the Second World War, Field Marshall Alexander said:

The knowledge not only of the enemy’s precise strength and disposition but also how, when and where he intends to carry out his operations has brought a new dimension into the prosecution of the war.15 26. In facing up to the terrorist threat in Malaya in the late 1940s the British commanders recognised:

The need for the highest grade intelligence system so that we all know beforehand what is likely to happen and can take steps to meet events without being ‘surprised’.16 27. But timely intelligence is not only needed in matters of war or rumours of war. In trade and finance and decisions about defence equipment procurement the value of good intelligence may even be capable of measurement in dollars.

11 CPD, House of Representatives, 1 June 1976, p. 2735. 12 Senator the Hon D. Willesee, speech at the opening of the Fourth National Conference of the Australian Insti­ tute of International Affairs, Adelaide, 15 June 1974. 13 Public Opinion (New York, 1947), p. 384.

14 Sun Tzu, The Art o f War (translated by Samuel B. Griffith, Oxford. 1963), p. 144. 15 Quoted in F. W. Winterbotham, The Ultra Secret (London, 1974), p. 197. 16 Lieutenant General Galloway, GOC Malaya, quoted in Anthony Short, The Communist Insurrection in Malaya 1948-1960 (London, 1975), p. 78.

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28. There are plenty of examples where the Australian Government has had knowledge in advance of the position of another country with which it is negotiating, and has benefited from it. Many policy decisions are made in the light of an assessment of likely reactions by others to them. Concrete knowledge would aid the

decision maker. But people don’t generally spell out publicly their intentions and contingency plans. They value the element of surprise, and the flexibility of action which secrecy gives them. Often secret intelligence will be the only source of foreknowledge of their intentions.

(iii) Relevance 29. Quality and timeliness will not suffice if the intelligence provided to government is on some subject of little or no interest to the policy makers. Similarly, if the information is presented in a form not capable of ready assimilation, and as a

guidance for policy, the point of it will be lost: The essential questions about the intelligence product concern its usefulness to the policy makers for whom it is intended. Does intelligence address the right questions? Does it deliver the kinds of information and insights policy makers need . . . Is it timely?

Is it presented and disseminated in the manner and format most useful to the consumers? Will they read it in other than crisis situations? The answers to these questions are by no means simple.17 30. Intelligence is produced for the consumers. Otherwise it is a waste of time and money. It would be well for all intelligence agencies to remember this and to impress on their staffs its importance.

31. This consideration in turn brings up the question of guidance — the process by which the consumers tell the collectors and producers what it is they want to know. 32. Summing up their views on ‘The Intelligence Function’, Professors M.S. McDougal, H.D. Lasswell and W.M. Reisman said:

Basic to any body politic is the realism of the judgments that enter into the stream of public decision. Fundamental to judgment is intelligence which is the gathering, processing and dissemination of problem-identifying and problem-solving information. The five intellectual tasks are the clarification of goals, the description of trends, the

analysis of conditions, the projection of developments and the formulation of policy alternatives. The intelligence process is responsible for locating all sources of knowledge that may be useful to decision makers, and for the mobilisation of the information relevant to questions of immediate importance.18

C. FINDINGS

33. I make the following findings.

(a) The need for intelligence 34. Australia needs a good system of intelligence and security services. This need has become more apparent now than perhaps it was in the past. 35. It may be urged that intelligence is all very well for the super powers. What, it may be said, can a small to medium power like Australia do in this field that can be effectively useful? Even granted the uses and importance of intelligence, can Australia afford to devote enough of its limited resources to intelligence to get a reasonable return from the investment?

17 Church Report, Book 1, op. cit., p. 267. 18 Temple Law Quarterly (Philadelphia, Pa., 1973), vol. 46, p. 447.

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36. Australia cannot hope to know everything that is going on in every part of the world. But we can try to keep informed about what people are doing and planning in areas of special significance to us. That requires us to be discriminating in choosing subjects for intelligence, collection and assessment.

37. The topics about which Australia will want intelligence vary from country to country, and over time, depending on our national interest. But it needs to be remembered that the intelligence assessment function is relevant to the formulation of national policies in a number of areas outside the traditional politico-defence area. 38. Australia needs intelligence of quality, timeliness and relevance. In the past, intelligence has been believed to be of most relevance in the field of defence and related policy areas. It is, however, not only a matter of defence. More and more, intelligence is relevant to the formation of national policies in a number of other areas; this is a trend that will continue. At the same time, the importance of having good defence intelligence has not diminished. 39. Australia is, on balance, fortunate to have been able to develop close intelligence links with some of the major intelligence agencies in the western world. It is quite clear that our participation in intelligence collection and assessment activities gives us a window on the participations of others with whom we have a community of interest. Also, Australia can get access to some information because of its participation in collection activities similar to those of other nations.

40. None of this means, however, that Australia can dispense with its own collection and assessment activities. We need to be sure that the information coming to us is objective. For Australia to maintain a degree of self-reliance in its international posture, we must have our own information, our own intelligence. Moreover, it would be naive to imagine that overseas governments will always tell us everything they know about a particular matter. The position they take is quite natural and we should face up to it realistically. Talk about whether the ‘flow’ of intelligence from overseas has been ‘turned off is unhelpful and not in our national interest. Finally, Australia may need intelligence about certain matters which none of our larger partners consider of sufficient priority to collect.

41. Since we must expect others to display an interest in our national situation, capabilities and intentions, a counter intelligence capability must be an important and necessary part of our overall intelligence effort.

(b) The Australian intelligence community 42. The Australian intelligence community is fragmented, poorly co-ordinated and organised. The agencies lack proper guidance direction and control. They do not have good or close relations with the system of government they should serve. In some cases, they have lacked funds and other resources (for example, adequate staff) to do the jobs expected of them. In other cases they have used lack of funds as an alibi for

not doing jobs they should have done. 43. The salaries and status of the heads of the intelligence agencies are, with the temporary exception of ASIO, too low. 44. The agencies' isolation from government has not been helped by the collection agencies continuing to have their headquarters in Melbourne, when all the major departments with whom they should relate are located in Canberra. 45. Australia’s intelligence interests do not, and cannot, coincide with those of any other country. Therefore, although we can and should benefit from exchange of information and views with friends and allies, we need our own intelligence collection and assessment capabilities. We also need constantly to reassess the benefits to Australia from intelligence relationships with other countries against the costs.

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46. Although operational secrecy is essential for the effective discharge of their duties by the agencies, they have suffered from unnecessary secretiveness in some of their activities which need not be secret. On the other hand, the climate of ‘leaks’ and ‘disclosures’ we have experienced lately is not to be taken lightly.

(c) Intelligence assessment

(i) The Assessment process 47. As intelligence is produced for the consumers there must be close

communication between them and the intelligence producers in establishing targets and priorities. But, while the right information will be provided only if the producers know what the consumers need, the process of assessment must be objective and be seen and believed by all consumers to be objective, if the consumers are to rely on it.

To achieve these things, intelligence producers and the intelligence assessment process must be independent and be seen to be independent. 48. At present, the intelligence assessment process suffers from too great control by the Defence Department and Defence Committee on the one hand and the

Department of Foreign Affairs on the other. To other departments it is seen in this light. That is bound to affect, and is believed to affect, objectivity in the assessment process, and has tended to result in assessments which run the risk of compromise. 49. The subordination of JIO and NIC to the Defence Department and the Defence

Committee, and of that part of JIO dealing with current intelligence (the Office of Current Intelligence) to the Department of Foreign Affairs, has not assured, and cannot assure, independence and hence objectivity for the intelligence assessment process.

50. The Office of Current Intelligence occupies a place in JIO which is undesirably separated from the rest of the intelligence assessment process. The Office of Current Intelligence has tended to move beyond current intelligence into short-term

assessments, in competition with the functional Directorates of JIO. 51. The roles of the respective organs of JIO are not sufficiently defined. Nor are the organs sufficiently co-ordinated. There is some duplication and overlapping of work between them. This overlapping is in some part due to the differing organisational

bases of the parts that make up JIO. 52. Departments other than Defence and Foreign Affairs with an interest in intelligence do not take any real part in setting intelligence targets and priorities for either collectors or assessors. They contribute less information to the JIO than

Defence and DFA. They cannot be expected to have the confidence in, and place the reliance on, intelligence assessments from JIO that could be expected if they had played a part in setting targets and priorities and if they saw the intelligence assessment machinery as more independent and the process as more objective.

53. A judgment on whether the present situation is appropriate depends partly on what one conceives as the true, or main, functions of the national intelligence assessments staff. If national intelligence assessment is seen essentially as a defence function, present arrangements might be thought suitable. I believe that governments

are expecting more than that from the national intelligence assessments staff. More attention needs to be given, and will increasingly need to be given, to the value of intelligence in national affairs beyond the purely ‘defence’ or even ‘national security’ spheres to which it has traditionally been confined. To say that is in no way to downgrade or denigrate the need for defence intelligence. The timely responsiveness to the needs for defence intelligence must continue. Indeed there is room for

improvement. But there is a need for the Australian Government to have more intelligence information available on a wider range of issues than ever before.

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54. The present system builds in institutional interests, from the effects of which it is most difficult for any officer to free himself, when he is not separated from them by a suitable distance. In the Australian context, that distance, to be suitable, has to be defined and expressed in institutional arrangements, sometimes even by legislation.

Neither the JIO nor the NIC enjoy that distance. 55. Another effect of the present sharing of control by the Departments of Defence and Foreign Affairs is that other departments and agencies who, in other circumstances, might better see the need to use intelligence do not do so. The lack of use made of the economic intelligence available in Australia, for example, is cause for some concern. Australia does not make full enough use of the materials available, perhaps because of lack of knowledge, or from prejudice; perhaps through some departments’ unwillingness to share information they have with JIO as at present constituted. 56. Those who administer the assessments staff and who co-ordinate the intelligence machinery will need to devote more time and attention to liaison with the rest ot the government than appears to have been the case. It will be their job to identify who in the government can supply useful intelligence, and convince them of their duty to do so. At the same time, efforts should be made to make the departments and authorities aware of the benefits they can derive from the intelligence machinery, and to draw them into the processes that will enable them to obtain those benefits.

(ii) The qualify of the product 57. Against the tests of quality, timeliness and relevance, Australia’s intelligence production is not as good as it should be, in the eyes of consumers who receive the product. Some of the latter have expressed a disappointment that the reforms expected by the establishment of JIO have not been realised. 58. Moreover, the intelligence product has not always been seen by consumers other than Defence or Foreign Affairs specialists as of relevance to national issues going beyond those fields.

(iii) The need for a centralised independent assessment capability 59. There is a need for a centrally located assessments function which is not under the control of either the Defence or Foreign Affairs Departments. The function should be placed in a location in the centre of government.

(d) Co-ordination of the intelligence community 60. There is a need for better co-ordination of the overall Australian intelligence effort, involving a fundamentally better relationship between the consumers, the collectors and the assessors of intelligence in order to define targets and priorities clearly. Without such co-ordination, the community will remain fragmented and will

not be effective to provide the kind of intelligence policy it needs. 61. The areas in which co-ordination of the intelligence community is needed include: (a) Determining targets and priorities.

(b) Assignment of intelligence collection responsibility and determination of intelligence collection policy. (c) Budgetary allocations to the intelligence community as a whole, including forward estimates. (d) Questions of jurisdiction between agencies and measures to ensure their

accountability. (e) Overall security policy.

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62. There has been a tendency over the years for ministers to take the intelligence/ security business for granted or to leave it to go its own way. This attitude may no longer suffice. Ministers are, in the final analysis, the ones for whom intelligence advice is produced. Therefore they have the right and the duty to give the producers (both collectors and assessors) clear guidance about priorities and targets.

D. RECOMMENDATIONS

63. In the light of the findings stated above and of the evidence before me, I make reommendations relating to • Arrangements for the management of central intelligence assessment. • Arrangements for co-ordination and control of the Australian intelligence

community as a whole. 64. These recommendations are designed to improve relations between government and the intelligence agencies and to establish machinery at the centre of government that will involve appropriate ministers and departmental heads with the agencies’ heads in the direction and guidance of the intelligence community in a co-ordinated way. 65. When I use the terms ‘guidance’ or ‘control’, I do not mean that the agencies should be directed, either politically or departmentally, as to what findings they must

make. Rather I mean they are entitled to know, from government, what matters are of interest from the intelligence viewpoint and with what priority. My recommendations will involve making the agencies less the creatures of their parent departments and more the servants of government as a whole. 66. I make the following recommendations.

(a) National intelligence assessments (i) Transfer to Office of Australian Intelligence Assessments 67. That the greater part of JIO be transferred to the administration of the Department of the Prime Minister and Cabinet (hereinafter called the Office of

Australian Intelligence Assessments’) and that the National Intelligence Commitu be abolished. 68. That: (a) those parts of JIO which are clearly national be transferred to the Office of

Australian Intelligence Assessments; (b) an interdepartmental working party be appointed to examine the remaining parts of JIO and report whether they perform non-strategic or non-national intelligence tasks and to recommend whether any of them should not be

transferred.

(ii) Charter of independence 69. That the Office of Australian Intelligence Assessments be given a charter establishing its independence: (a) of control or direction by any policy department; and

(b) of directions by ministers as to what assessments it must make on issues about which it is required to report. 70. That the charter of the Office of Australian Intelligence Assessments be established either by legislation, by directive of the PM or of Cabinet, or by Executive Council minute. That future consideration be given to establishment of the Office of Australian Intelligence Assessments by legislation if, notwithstanding the provisions

of the charter of the Office of Australian Intelligence Assessments, it were ever to

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show a tendency to return to a position of subordination similar to that in which JIO is now placed.

(iii) Functions of the Office of Australian Intelligence Assessments 71. That the charter of the Office of Australian Intelligence Assessments include the following: 1. The functions of the Office of Australian Intelligence Assessments are:

(a) To assemble, evaluate and correlate such intelligence as will enable the Office to present to Commonwealth ministers, departments and agencies intelligence reports, assessments and appreciations or other information that are required to assist those authorities in the formation of national policy and plans.

(b) To provide for the appropriate dissemination of such intelligence within the Australian Government. (c) To co-operate with departments or agencies or with appropriate authorities overseas who are capable of assisting the new agency in

performing its functions. (d) To provide advice and assistance to the Intelligence and Security Committee for the determination of intelligence targets and priorities. (e) To perform any other tasks (not including the clandestine collection of

intelligence) as the Intelligence and Security Committee may assign to the Office of Australian Intelligence Assessments. 2. It is not a function of the Office of Australian Intelligence Assessments to collect intelligence by clandestine means. 3. The Office of Australian Intelligence Assessments shall take care to ensure,

by consultation and otherwise, that it provides intelligence appropriate to the needs of policy advisers and of ministers, and that it does so in timely fashion. 4. The Office of Australian Intelligence Assessments shall take special care to ensure that it satisfies the needs of the Defence Force, and the Department of

Defence, for intelligence reports and advice in timely fashion 5. In the performance of its functions the Office of Australian Intelligence Assessments:

(a) is not subject to direction by any minister, department or other Commonwealth agency as to the findings it shall make on any matter on which it assembles, evaluates or correlates intelligence pursuant to 1(a) above; (b) may, subject to particular statutory or other legal prohibitions, and/or

requirements or confidentiality, have access to information and records held by departments and agencies of the Commonwealth when that information will, in the opinion of the Director-General, assist the Office of Australian Intelligence Assessments in the performance of its functions. 6. It shall be the duty of all Commonwealth departments and Commonwealth

agencies, subject to particular statutory or other legal prohibitions and/or requirements of confidentiality, to assist the Office of Australian Intelligence Assessments in its tasks of evaluation, correlation and assessment of intelligence as set out above. In particular, departments and agencies should:

(a) reply promptly to requests by the Office of Australian Intelligence Assessments for drafts and information; (b) co-operate with the Director-General by providing staff for secondment to positions in the new agency.

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(iv) The Director- General of the Office of Australian Intelligence Assessments 72. That the head of the Office of Australian Intelligence Assessments (hereinafter called the Director-General) should enjoy high status and be noted for his or her objectivity, perceptiveness, high intelligence and independence of spirit. No department should have a right to appoint its nominee as Director-General. 73. That the Director-General be appointed for a stated term of office, not exceeding seven years.

(v) The National Assessments Staff 74. That an assessments staff be established within the Office of Australian Intelligence Assessments under the Director-General with responsibility for preparing short- or long-term assessments, whether on political, military or economic matters,

of international situations of actual, likely or potential interest to the Australian Government, and, where appropriate, on internal matters or international aspects of internal matters. 75. That the assessments staff largely be seconded (temporary transfer) from

departments, the Defence Force and agencies. No one should have a lien on any job and no one should ‘represent’ his department, service or agency. 76. That there be an undertaking that the Office of Australian Intelligence Assessments may co-opt officers from other departments or agencies with particular expertise as required. 77. That care be taken to select people of high ability for the assessments staff and that their attachment be recognised as an important landmark in their careers.

78. That the present organisational distinction between the methods of producing ‘current intelligence’ and ‘national assessments’ be abandoned. 79. That intelligence assessments should, in case of disagreement, expose the

nature of the disagreement and provide for incorporation of minority dissents. Options of interpretation should be indicated.

(vi) Support 80. That the assessment staff should have intelligence storage and retrieval support, and specialists whose assistance it can draw on, or even co-opt, in preparing its assessments. The organisation of the supporting staff is a management problem for the Director-General. But a system like JIO’s functional directorates would be

suitable. They could also produce intelligence papers and assessments within their specialisations. They should serve the assessment staff, under the Director-General, first. Care should be taken to avoid their subjects overlapping with each other and with the assessment staff, and to see that the Office of Australian Intelligence Assessments is, in all respects properly co-ordinated and efficiently managed.

(vii) Defence intelligence 81. That officers of the Defence Force should continue to be attached to, and perform tasks in, the Office of Australian Intelligence Assessments in much the same way as they have done in JIO.

82. That consideration be given to the possibility of integration of the three single service intelligence directorates into one joint service unit and that more attention be paid to providing Defence Force officers with a credible career path in intelligence work.

83. That a senior position in the Office of Australian Intelligence Assessments, possibly as deputy to the Director-General, be available for occupation by a serving

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officer of the Defence Force of at least two-star rank: that this officer continues to perform in the new agency duties of oversighting DJSI-type activities and of ensuring that the Office of Australian Intelligence Assessments understands the military view on any given matter and is properly responsive to military needs and service interests. 84. That the Office of Australian Intelligence Assessments take care to ensure that expert military advice is available and is adequately represented in the preparation of assessments with a defence content or aspect. 85. That the Office of Australian Intelligence Assessments be collocated with that part of JIO not transferred, perhaps in the present JIO buildings.

(b) Co-ordination of the Australian intelligence community (i) The ministerial committee on Intelligence and security

86. That consideration be given to the establishment of a special ministerial committee, somewhat separate from the regular Cabinet machinery and chaired by the Prime Minister, to deal with the following matters: (a) To give general oversight and policy control to the intelligence community.

(b) To approve, on a regular basis, the general targets and priorities for intelligence by the component agencies of the community. (c) To approve the annual estimates for the intelligence community, including the secret vote, and to endorse forward financial plans in a form to be agreed

on.

(d) To approve general internal security policy. (e) To consider and approve proposals for international treaties, arrangements or agreements concerning or affecting Australia’s international relationships in intelligence and security matters.

(f) To arbitrate jurisdictional differences between agencies in the community. (g) To receive annual reports from each agency. 87. That the ministerial committee might include (but not necessarily be limited to) the Prime Minister, the Treasurer, and those ministers to whom an intelligence agency is responsible. (For this purpose, the Attorney-General should be regarded as the minister to whom ASIO is responsible.) 88. That the Prime Minister and/or the ministerial committee receive advice from the Intelligence and Security Committee recommended below.

(ii) The Intelligence and Security Committee 89. That the Prime Minister and/or the ministerial committees be advised, on a regular basis, by an Intelligence and Security Committee, including the following: Secretary, Department of Prime Minister and Cabinet

Secretary, Department of the Treasury Secretary, Department of Defence Chief, Defence Force Staff Secretary, Department of Foreign Affairs Director-General of the Office of Australian Intelligence Assessments The heads of each intelligence collection agency 90. That the Secretary, Attorney-General’s Department, attend as a member of the Committee when his department’s interests are involved. 91. That the Secretary to Cabinet chair the committee and that the

Director-General of the Office of Australian Intelligence Assessments be its deputy chairman. 92. That the Director-General of the Office of Australian Intelligence Assessments should have direct access to the Prime Minister on intelligence/security policy,

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co-ordination and control, as well as to the intelligence community and ministers concerned with these matters. 93. That the Committee may: (a) co-opt permanent heads or other senior officials for the consideration of

particular questions; (b) establish working parties or committees of less senior officials for the study of particular issues. 94. That the committee meet regularly — perhaps twice a year, apart from ad hoc or

urgent matters.

95. That the Secretary to Cabinet and the Director-General of the Office of Australian Intelligence Assessments, in his capacity as deputy chairman of the Intelligence and Security Committee, have the assistance of a small policy and executive staff established within the Department of Prime Minister and Cabinet, and known as the intelligence community staff. As appropriate, persons from the agencies or departments should be seconded to the staff.

96. That the staff should have these functions: (a) Provide the secretariat to the Intelligence and Security Committee as well as to the committee of ministers. (b) Devise procedures for the establishment of realistic intelligence targets and

priorities, budgetary oversight and overall security policy. (c) Ensure that the interests of departments and authorities not represented on the Intelligence and Security Committee are kept in mind in the consideration of intelligence and security matters. (d) Deal with other matters of common intelligence community concern.

(iv) Independence and accountability of intelligence agencies 97. That the intelligence agencies should remain responsible to the ministers to whom they are now responsible, with the exception of that part of JIO which, as the Office of Australian Intelligence Assessments, should be responsible to the Prime

Minister. 98. That the agencies should have direct access to their ministers, and generally be less subordinated to departments, than at present. 99. That the collection agencies should have their own budgets and be required to

perform the tasks assigned to them within those budgets; that they should be operationally autonomous.

(v) Location of the agencies 100. That the head offices of the intelligence collection agencies be relocated in Canberra as a matter of priority.

(vi) Status of heads of the agencies 101. That the salaries and status of the heads of the intelligence agencies be reviewed to ensure that they reflect the high and increasing responsibilities they have, and will assume if my recommendations in this and other reports are accepted.

(c) Parliamentary relationships 102. (a) That the Prime Minister and Leader of the Opposition arrange as con­ venient between them to discuss from time to time matters of intelligence and security under secure conditions.

(b) That the Prime Minister ensure that the Leader of the Opposition continues to be kept fully briefed on matters of intelligence and security. (c) That consideration be given to the development and use of an ‘Executive Councillor’ convention for the purposes of (a) and (b) above.

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