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Australia's security and intelligence agencies - Reports of the Royal Commission (Justice R.M. Hope), dated December 1984 - Office of National Assessments and Joint Intelligence Organization


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The Parliament of the Commonwealth of Australia

ROYAL COMMISSION ON

AUSTRALIA 'S SECURITY INTELLIGENCE AGENCIES

Report on the Office of National Assessments and the Joint Intelligence Organization

December 1984

Presenled 22 Ma y 1985 Ordered 10 be primed 23 M ay 1985

Parliamentary Paper No. 230 I 1985

" ~ .. " " "

Royal Commission on

1ustralias Security and Intelligence Agencies

REPORT ON THE OFFICE OF

NATIONAL ASSESSMENTS AND THE

OINT INTELLIGENCE ORGANIZATION

December 1984

ROYAL C0~ 1 ISSION ON

AUSTRAL IA'S SECURITY AND INTELLIGENCE AGENCIES

Report on the Office of National Assessments and Joint Intelligence Organization

December 1984

Australian Government Publishing Service Canberra 1985

© Commonwealth of Australia 1985

ISBN 0 644 04043 2

Other Reports:

Report on Term of Reference (c)

Report on the Sheraton Hotel incident

General Report

Report on the Australian Secret Intelligence Service

Report on the Australian Security Intelligence Organization

Report on the Defence Signals Directorate

Mr Justice Hope's views on publication of this Report

are given in paragraphs 1.27-1.29. Publication has involved deletion on security grounds, from Chapters 2 to 5 and the Appendixes, of certain material classified by Mr Justice Hope and from Chapter 4 of a few additional paragraphs, as well as minor consequential editing. A broad indication has been given of the content of Chapters 6 and 7. The pages and paragraphs of the published Report have been re-numbered seriatim.

Printed by C .J. Thompson, Commonwealth Government Printer, Canberra

REPORT ON THE OFFICE OF NATIONAL ASSESSMENTS AND

THE JOINT INTELLIGENCE ORGANIZATION - INTELLIGENCE ASSESSMENT AND CO-ORDINATION

CONTENTS

GENERAL OVERVIEW

Abbreviations

CHAPTER 1: CONDUCT OF THE INQUIRY

Terms of reference Basis of investigation Submissions Oral evidence Other investigations The report

CHAPTER 2: OVERVIEW

Intelligence assessment agencies Genesis of current structure in RCIS Government response to RCIS Economic intelligence Assessment of performance

(iii)

PAGE

viii 1

1

3

4

5

6

6

8

8

10

11

13

13

PARA.

1.1

1.10 1.12 1.13 1.20 1.23

2.1

2.9

2.12 2.16 2.18

PERFORMANCE OF ONA AND JIO

PAGE

CHAPTER 3: ONA'S ASSESSMENT ROLE AND PERFORMANCE 17

THE NATURE OF ONA'S ASSESSMENT ROLE

ONA's product

ONA'S EFFECTIVENESS AND EFFICIENCY Quality of product

RELATIONS BETWEEN ONA AND CONSUl-1ERS Inherent scope for tension Particular agency relationships Foreign Affairs

Defence JIO

Economic departments Immigration and Ethnic Affairs Strategic assessment responsibilities Departmental support and liaison

SOME KEY ISSUES

Reports or assessments Competitive or co-ordinated intelligence Economic intelligence The consultative process Focus of assessment

Regional or global Current or longer term focus

CONCLUSIONS

RECOMMENDATIONS

CHAPTER 4: JIO'S ROLE, PRIORITIES AND PERFORMANCE

INTRODUCTION

SCOPE OF JIO'S ACTIVITIES Functions JIO priorities JIO publications

(iv)

17

20

21

21

26

26

28

28

29

30

31

33

35

38

41

41

45

48

52

57

57

58

59

61

65

65

69

69

70

72

PARA.

3.1

3.13

3.18

3.42 3.49 3.50 3.54 3.58 3.60 3.66 3. 7l 3.84

3.96 3.108 3 .118 3.131

3.150 3.154

3.159 3.168

4.1

4.14 4.18 4.24

RELATIONS WITH CONSUMERS IN DEFENCE Views of JIO's Defence customers Defence Department Australian Defence Force

JIO's operational role Representation on Defence committees Conclusions on JIO/Defence relations

RELATIONS WITH OTHER AGENCIES ONA Foreign Affairs Other agencies

DSD ASIS ASIO Immigration and Ethnic Affairs

Economic departments Others

ISSUES FOR THE FUTURE

Role in the Defence Organisation Role in strategic assessment Economic product Geography and social research

RECOMMENDATIONS AND CONCLUSIONS

CHAPTER 5: ONA'S CO-ORDINATION ROLE

Overview of co-ordination role RCIS Report and response The legislative mandate ONA's co-ordination activities National assessment priorities National intelligence collection

requirements committee Annual Reports Special studies Views of departments and agencies

Future requirements

RECOMMENDATIONS

(v)

PAGE

75

76

77

79

81

85

86

87

87

90

91

91

92

92

92

94

94

95

95

96

98

100

103

107

107

108

110

111

113

114

114

115

115

117

119

PARA.

4.37 4.38 4.42 4.48 4.53 4.68 4 .70

4.73 4.83 4.89 4.92 4 .93

4.94 4.100 4.101

4.104 4.108 4.116 4.121

4.131

5.1

5 .6

5.14 5.20 5.24

5.28 5.30 5.33 5.35 5.43

5.47

ADMINISTRATION

PAGE

CHAPTER 6: ONA: PERSONNEL AND ADMINISTRATIVE ISSUES 121

CHAPTER 7: JIO: PERSONNEL AND ADMINISTRATIVE ISSUES 125

(vi)

PAGE PARA.

GUIDE TO RECOMMENDATIONS 130

APPENDIXES

A Letters Patent 132 ( 1.1)

B ONA Organisation Chart 135 ( 2. 6)

c (Deleted)

D ONA Product (Non-Weekly) 1978-84 136 (3.13)

E (Deleted)

F (Deleted)

(vii)

ACOPS

ADF

AD FCC

AFP

ASIO

ASIS CDF

DDM

DEI

DFA

DIC

DIEA

DIMP

DINT

DSD

EAB

EI

GS

GSSR

HIAM

IE

JIAC JIO

JMOP

JSP

NAB

NAP

NAS

NIC

NICRC

ABBREVIATIONS USED IN THIS REPORT

Assistant Chief of the Defence Force (Operations ) Australian Defence Force Australian Defence Force Command Centre Australian Federal Police Australian Security Intelligence Organization Australian Secret Intelligence Service Chief of the Defence Force Deputy Director Military Directorate of Economic Intelligence Department of Foreign Affairs Defence Intelligence Committee (proposed) Department of Immigration and Ethnic Affairs Defence Industry and Materiel Policy (Division) Director of Intelligence Defence Signals Directorate Economic Assessments Board Economic Intelligence (Branch) Military Geography and Social Research (Branch ) Social Research Section (GS Branch) Heads of Intelligence Agencies Meeting Intelligence Estimates (Branch) Joint Intelligence Advisory Committee Joint Intelligence Organization Joint Military Operations and Plans (Division) Joint Service Publication National Assessments Board National Assessment Priorities National Assessments Staff National Intelligence Committee (proposed) National Intelligence Collection Requirements Committee

(viii)

NISC

ocr

ONA

ONA Act

PSCC

RCIS

SCIS

SIP

SISUM

National and International Security Committee Office of Current Intelligence Office of National Assessments Office of National Assessments Act 1977

Protective Services Co-ordination Centre Royal Commission on Intelligence and Security Secretaries Committee on Intelligence and Security Strategic and International Policy (Division)

Service Intelligence Summary

( ix)

CHAPTER l

CONDUCT OF THE INQUIRY

Terms of reference

l.l The Royal Commission was established by Letters Patent issued by His Excellency the Governor-General on 17 May 1983 to undertake a judicial review of the activities of Australia's security and intelligence agencies. The Letters Patent which provide the terms of reference for the Commission are reproduced at Appendix A.

1.2 The agencies into which I am inquiring are named in the Letters Patent as the Australian Security Intelligence Organization (ASIS), the

Intelligence

(ASIO), the Australian Secret Intelligence Service Defence Signals Directorate (DSD), the Joint Organisation (JIO) and the Office of National Assessments (ONA). These agencies have in common the handling of

'intelligence'. I discussed the concept of intelligence in the Third Report of the Royal Commission on Intelligence and Security (RCIS) and do not repeat that discussion here, save to note that in this report I use the term to cover 'all source'

intelligence not simply 'covert' intelligence.

1.3 Whilst the five agencies together may be referred to as the Australian intelligence community, it needs to be stressed that they cover a range of functions. ASIO is concerned with

collection Australia's and assessment of

internal security. intelligence relevant to ASIS and DSD have

responsibilities in connection with the collection of foreign intelligence. Those agencies are discussed in other reports.

1.4 This report is concerned with ONA and JIO, which may be

referred to as the foreign intelligence assessment agencies. It is convenient to discuss together the role of these agencies in assessing foreign intelligence to facilitate the work of

l.

policy-makers. I also discuss ONA's role in co-ordination of foreign intelligence activities engaged in by Australia.

1. 5 ONA and JIO draw together and assess foreign intelligenc e from all available sources . This intelligence may be supplied by ASIS, DSD or, to a limited extent, ASIO; it may also come from a variety of other sources including Department of Foreign Affairs post reporting, Service Attaches, other departments with overseas representat ion or interests, or as a result of liais on with international intelligence partners. JIO and ONA supplement

this flow of intelligence by their own access to a range of openly available informa tion, including information obtaine d from media reports and other publications or obtained in the course of overseas visits. Neither ONA nor JIO is itsel f

involved in the collection of intelligence by covert means.

1.6 I see questi ons such as compliance with the law and redress for persons who may be unjustifiabl y disadvantaged by the agencies as being more relevant to the three collection agencies and as having little practical relevance to ONA and JIO, in the absence of any indication of their straying outside their intelligence assessment roles. involving collati on, analysis and

Their assessment function, reporting, is unlikel y to

affect individual Australians directly or adversely.

1. 7 My investigations of ONA and JIO have been addressed more to sub-paragraphs (a) ( i) (iii) of the terms of reference, namely:

(a) the activities of the agencies, especially since the comp letion of the inquiry made by the Royal Commission

appointed on 21 August 1974 to inquire into matters relating to the intelligence and security services of the Australian Government (hereinafter called the Royal Commission on Intellige nce and Security), with particular reference to-

( i) the progress made in implementing

decisions on the recommendations of Commission on Intelligence and Security Protective Securit y Review;

2.

Government the Ro yal

and of the

(ii) whether the agencies have efficiently, effectively and properly served the interests of the Australian people and Government, including whether effective arrangements exist for the establishment of policies and priori ties, for the co-ordination of

their activities and for the oversight of their work;

(iii) whether any changes in existing law and practices are required or desirable-(A) to ensure that the agencies are properly

accountable to Ministers and the Parliament;

(B) in relation to keeping Opposition informed on security and intelligence; the Leader of

matters relatinq the

to

(C) to provide for proper safeguarding, includinq safeguarding against unauthorised publication, of intelligence, including information provided by foreign governments in confidence.

1.8 The questions Ministers and the Opposition informed

raised in (a) (iii) as to accountability to Parliament, keeping the Leader and safeguarding intelligence are of the

referred

to in relation to all agencies in my General Feport, and some specific aspects relating to ONA and JIO are covered in this report.

1.9 I note that ONA and JIO are not the only Commonwealth

agencies engaged in the process of assessing intelligence. Policy departments must of necessity undertake such assessment, either explicitly or implicitly, in relation to their policy interests, but departments other than Defence do not have

separate, distinct intelligence assessment units. My terms of reference do not extend to the intelligence assessment roles of those departments.

Basis of investigation 1.10 Consistently sub-section (a) of with the emphasis in the preamble to

the terms of reference, I have taken as a starting point the ONA/JIO arrangements established by the then Government in response to the Third RCIS Report. I do not

3.

reiterate the reasons (RCIS 3-41 to 3-59) why I consider it of great importance that high quality national, defence and economic intelligence assessments be available to the Gover nm ent; nor do I wish to repeat at any length the need (RCIS 3-241 to 3-244) for high-level co-ordination of Australia's limited intelligence resources to ensure their most efficient use. I take these requirements to be now largely self-evident and accepted in a country of Australia's size, strategic situation and economic position.

l.ll In decisio ns this report, on ONA and

I assess how

JIO arising

the

from

ONA and JIO

then RCIS

have

Government's have been

implemented, effectively and whether

and properly' met the requirements 'efficientl y, for high level

intelligence assessment since the establishment of ONA and the consequent change in JIO's responsibilities.

Submissions 1.12 I called for submissions by public advertisements. I also specificall y invited submissions from:

ONA and JIO - in each case I received a detailed submission

on the agency's activities

implementation of RCIS; generally, and on the

'consumer' Departments and agencies - submissions or shorter responses were received from the Departments of Defence, Foreign Affairs, Prime Minister and Cabinet, Treasury, Trade , Resources and Energy, Industry, Technology and Commerce, Primary Industry, Immigration and Ethnic Affairs , Science and Transport, and from the Australian Federal Police, the Protective Services Co-ordination Centre, the Australian Customs Service and the Export Finance Insurance Corporation;

4.

the intelligence collection agencies submissions were received from the Australian Security Intelligence Organization and Australian Secret Intelligence Service;

staff at ONA and JIO submissions were received from a number of present officers and former officers.

Oral evidence

1.13 I heard sworn evidence in formal public or closed hearings from three former officers of JIO or ONA who made submissions in response to the public invitation.

1.14 I also discussed relevant issues with the Prime Minister, the Foreign Minister, and the former Minister for Defence.

1.15 Discussions were held with senior staff and with analysts of the two agencies. These discussions included individual interviews with senior staff and, where requested or in relation to individual submissions, with analysts.

1.16 Discussions were also held with the Secretaries or other senior officers of the major 'consumer' departments and departments which raised significant issues - Defence (including the Services), Foreign Affairs, Prime Minister and Cabinet, Treasury, Trade, Resources and Energy and Immigration and Ethnic Affairs.

1.17 Inquiries were also made of the collection agencies ASIS, DSD and ASIO.

1.18 Some former ONA/JIO officers were interviewed including the former Director-General of ONA, Mr Furlonger, and the former Director of JIO, Mr Furner.

1.19 I also made relevant inquiries overseas.

5.

Other investigations 1.20 Visits were made to various sections of JIO to observe the nature of the work undertaken by desk officers.

1.21 A range of JIO and ONA reports published over recent years was perused, including all publications for 1983-84. I have analysed lists of each agency's publications and examined particular publications in detail.

1. 22 A number of files held by the agencies as well as some relevant RCIS files were examined.

The report 1.23 I have not seen the need to inquire exhaustively into or report on all aspects of ONA and JIO operations. I have sought to address the major issues, together with other questions that have been raised with me or that otherwise warrant attention.

1.24 Most of the main issues identified as possibly requiring reporting on were discussed by me with senior management of ONA and JIO.

1.25 I made a .draft of the report available to senior

management of ONA, JIO and Defence for comment.

1.26 This report is in effect in three parts. Chapters 1 and 2 present a general overview. Chapters 3, 4 and 5 address the performance of ONA and JIO in meeting their respective

responsibilities. Chapters 6 and 7 address some administrative issues in each organisation.

1.27 Generally speaking, the requirements of secrecy are not quite the same in relation to the nature of the activities of assessment agencies such as ONA and JIO as they are in

connection with intelligence collection agencies. There is, of course, a requirement to protect intelligence data which they receive, the sources from which certain data is derived and the

6.

sensitive reports which they issue. Regard also needs to be had to sensitivities on the part of foreign countries, including in relat ion to intelligence co-operation arrangements. On the basis of consultation with ONA and JIO I have indicated a number of passages in this report, and several Appendixes, which contain material which in itself requires protection.

l. 28 There is also, however, a need to consider the report in the context that a compilation of information may require a higher classification than any of the particular passages. The report provides a quite detailed account of the two agencies

including indications of priorities and the machinery for their determination, targets, methods of operation, strengths and weaknesses. Whilst release of the report would provide the public with more information about ONA and JIO and their

effectiveness, it could also have implications for our relationships with other countries. Detail of any weaknesses of the two agencies could make them more vulnerable to hostile attention.

1.29 The judgment as to whether the report should be released, after excision of the relatively few passages which require classification in their own right, or whether more extensive editing or abridgement is necessary, is one for the Government.

I note that the last two chapters, which go to questions of

internal organisation and management, are of rather less general interest than the first five. For my part, I would recommend release in an abridged form of the substance of the first five chapters. Some broad indication of the content of the final two chapters could be given at the same time and it is desirable

that some arrangement should be made to advise staff of the agencies in more detail of matters of direct relevance to them.

7.

CHAPTER 2

OVERVIEW

Intelligence assessment agencies 2.1 ONA and JIO collate and assess intelligence, from all sources, for the assistance of policy-makers and other consumers of intelligence within government. Neither ONA nor JIO is itself

involved in the collection of covert intelligence. Their product is published in the form of reports or assessments on the existing situation or likely developments in particu lar countries or areas or with regard to particular internatio nal

issues.

2.2 The role of JIO and ONA does not extend to policy advice on the matters about which they write. Policy departments for their own part necessarily undertake the assessment of intelligen ce,

implicitly or explicitly, as part of the process of policy development. Unlike ONA and JIO, however, their assessment activity is not normally carried on as a separate function but is subsumed in the work of relevant policy areas.

2. 3 ONA was

Act 1977 (the

established by the Office of National Assessments 'ONA Act'). Its field is international matters of

political, strategic or economic significance to Australia; and its responsibility is to prepare reports on such of those matters as are of current significance, and from time to time as circumstances require, to make assessments of such of those matters as are of national importance. The Act establishes Assessments Boards to consider ONA's assessments. ONA also has a

role to play in co-ordination of Australia's international intelligence activities.

2.4 In this report, I address the nature of ONA's intellig ence responsibilities, ONA's involvement of relevant policy

8.

departments in its work and the implications of its overlapping responsibility with other agencies and departments.

2.5 ONA is responsible to the Prime Minister. While it is grouped for administrative purposes with the Department of the Prime Minister and Cabinet and other agencies within the Prime Minister's portfolio, it functions independently of any parent policy department (apart from some administrative support from

the Department of the Prime Minister and Cabinet). Its

Director-General is the equivalent of a Department Secretary and he issues assessments and reports on his own authority.

2.6 ONA's staff, other than the Director-General, is employed under the Public Service Act 1922. The average staffing level for 1983-84 was 74 officers, including 35 analysts. An organisation chart is included at Appendix B. ONA's 1983-84

budget outlay amounted to $2.53m; its budget estimate for 1984-85 is $2.69m.

2.7 JIO is the principal Defence intelligence assessment agency, being the successor of joint intelligence agencies of one form or another which have served the Australian Defence Force and the Department of Defence since the Second World War. JIO maintains large intelligence data banks and is the primary

source of military intelligence assessment for the Defence organisation the Minister for Defence, the Department of Defence and the Defence Force. In the area of strategic

intelligence at a national level of interest, JIO shares a role with ONA.

2.8 JIO is an 'outrider' of the Department of Defence, with its Director reporting jointly to the Secretary and the Chief of the Defence Force (CDF). Its average staffing level for 1983-84 was 188 civilian and 103 military personnel. JIO's 1983-84 budget outlay amounted to $8.10m; its budget estimate for 1984-85 is $9.60m.

9.

Genesis of current structure in RCIS 2.9 In the Third Report of RCIS, I found:

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 (3-329).

I recommended the establishment of such an independent agency,

based on transfer of 'the greater part of JIO' ( 3-337). I including ocr (Office of Current Intelligence) I NAS (National

Assessments Staff) and DEI (Directorate of Economic

Intelligence) ', with an interdepartmental working party to report whether the remaining parts 'perform non-strategic or non-national intelligence tasks and to recommend whether any of them should not be transferred' ( 3-338). The new agency was to

'take special care to ensure that it satisfies the needs of the Defence Force, and the Department of Defence, for intelligence reports (3-341).

2.10 I also found:

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 (3-330).

I recommended a role for the new agency in providing ' ".. advice

and assistance . ". for the determination of intelligence targets and priori ties' ( 3-341). The new agency was to ' ... take care to ensure, by consultation and otherwise, that it provides intelligence appropriate to the needs of policy-advisers and of Ministers ... ' (3-341).

2.11 I recognised, in the following terms, overcome the difficulties inherent in the need to try to involving in the intelligence process departments other than Defence and Foreign Affairs:

10.

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 of 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 (3-327).

Government response to RCIS 2.12 'I'he then Prime Minister, the Rt. Hon. J .M. Fraser, C.H., M.P., announced the Government's decisions on the Third RCIS Report in the House of Representatives on 5 May 1977 (Hansard pp. 1630-34). He indicated that the decisions 'reflect

acceptance in principle of Mr Justice Hope's recommendations, but incorporate some variations on matters of organisation and administrative arrangements . ". '.

2.13 In announcing the establishment of ONA, the Prime Minister said:

The Office shall be concerned with national assessments 'national' meaning a matter affecting the responsibility of more than one minister, department or authority, or being of a level of importance warranting Cabinet reference, or being of importance to basic Government policy. Or having major

implications for the basic premises of departmental policy or programme.

the Office shall be free from external direction as to the contents and conclusions of its reports and assessments. It will be independent of any Government Department or authority.

It shall be expected to offer objective reports and assessments. intelligence,

The subject matter of national interests will include international economic as well as international political and strategic questions. This reflects the Go vernment's concern to have the best possible intelligence assessments on matters in the economic and resources fields which will be of increasing relevance.

11.

the Joint Intelligence Organisation will continue under its present title and with its existing functions, except those in the area of national assessments and current intelligence which will be transferred to the new Office.

(Hansard 5 May 1977, pp 1630-3)

2.14 The ONA Act, passed in 1977 with the support of the then Opposition, established ONA with functions detailed below ( 3. 2 and 5.14). These functions relate to national intelligence in the political, strategic and economic fields, and a co-ordination role. A National Assessments Board and an Economic Assessments Board were established to facilitate representati on of departmental views in the national intelligence assess men t process. Prime Minister Fraser, in introducing the legislat ion, repeated the definition of 'national' quoted above (2.13). He added that:

Those departments, the Defence organisation and established intelligence agencies which at present collect and collate intelligence will continue to fulfil their present functions. Nor will they be precluded from engaging in research, analysis and assessment essential to the discharge of statutory responsibilities, or of functions derived from ministerial responsibilities.

He also said that:

The Director-General will issue reports and assessments from the Office of his own authority but will, wherever possible, consult the appropriate assessment board before doing so. (Hansard 15 September 1977, pp 1179-80)

2.15 JIO functions actually transferred to ONA were limited to those of the former National Assessments Staff and the Office of Current JIO a

Intelligence. substantial The Defence organisation thus retained in organic capability for intelligence assessment. Although ONA was given a responsibility to make assessments of international matters that are of political, strategic or economic significance to Australia, JIO retained primary responsibility for those intelligence requirements of

12.

the Defence organisation which were specifically related to the

nation's military security and defence activity. The Committee of Department Secretaries which considered the Third RCIS Report concluded, and the then Government agreed, that:

Intelligence must be available to meet Defence priori ties. Its provision requires professionally expert and experienced staff, known to and commanding the confidence of the senior Defence authorities and directly responsible to them.

Econom ic intelligence

2.16 The conclusion I reached in RCIS was that adequate use was not being made of the opportunities for collecting and assessing economic intelligence and that potential advantages were being missed as a result (3-181).

2.17 The then Government gave ONA a responsibility for national

economic intelligence reporting and assessment. JIO retained its Directorate of Economic Intelligence (DEI) and hence a capability for economic intelligence analysis. It was intended, however, that after the establishment of ONA DEI's focus would

narrow from a wide-ranging international economic perspective to more specifically defence-related economic issues.

As sessment of performance

2.18 In Chapters 3 and 4, I consider how efficiently and effectively ONA and JIO have fulfilled their assessment

responsibilities. A review of this kind almost inevitably tends to highlight any weaknesses rather than strengths and achievements. For that reason, I record here that, although seven years is relatively little time for the fundamental changes introduced in 1977 to be smoothly incorporated in the processes of government, and although arrangements are still

evolving, ONA and JIO have settled reasonably comfortably into their new roles. ONA has established a place for itself and has become a valuable source of independent assessment for the

13.

Government. JIO also fulfils an important role in providing the Defence organisation and other areas of government, as appropriate, with a range of data and assessed intellige nce on international military and defence related developments.

2.19 Furthermore, as I discuss in Chapter 5, ONA has gone some way, particularly in recent years, towards overcoming the lack of co-ordination I brought to notice in RCIS. Progress has been made through its National Assessment Priorities, the work o f its

National Intelligence Collection Requirements Committee, the regular Heads of Intelligence Agencies Meetings and its annual reporting.

2.20 The suggestions which I canvass for possible further improvements in the efficiency and effectiveness of the service ONA and JIO provide to Australian policy-makers should be seen

in the context of my overall positive conclusions.

2.21 At the outset, the Government of the day recognised that ONA would need to consult closely with other departments. In

giving ONA overlapping areas of assessment responsibility with the Defence, Foreign Affairs and economic departments, the Government left it largely to those agencies to work out how it should be decided who would produce what assessments.

2.22 The Government may have seen the Assessments Boards as the principal mechanisms for consultation, even though the Act bestowed only limited functions on them. But those Boards have handled only the limited number of publications formally styled

'National Assessments' and, at least in recent years, have met

not all that frequently. ONA does, of course, have regular less formal meetings with departments , particularly JIO, Foreign Affairs and Prime Minister and Cabinet, and there is regular contact with some of the economic departments.

14.

2.23 Although there is clear overlap in assessment functions

between ONA and JIO, both agencies report in their submissions that early difficulties have now largely been overcome and a satisfactory working relationship has developed. That seems broadly true, but I am not sure that Defence is gaining the

max imum advantage from the two potential sources of strategi c

assessment.

2. 24 ONA' s responsibilities also overlap with Foreign Affairs . Potential difficulties seem to have been resolved by that Department largely leaving 'national' political/strategic

intelligence assessment to ONA, subject to its participation

formally through the National Assessment Board, although there remain some signs of sensitivity.

2.25 The economic departments, although appreciating ONA's

economic intelligence reporting and assessments, seem to have continued to rely mainly on their own resources for assessment of issues which they see as central to key policies. Although I

appreciate that these departments see limited value in covert

economic intelligence and have not had a traditional association

with intelligence assessment, there does seem to be scope for fuller use of ONA's economic assessment potential.

2.26 While good progress has been made, I still see the need for ONA to pursue the objective I foreshadowed in 1977 (2.11) to draw departments sufficiently into the intelligence processes to

enable them to appreciate and obtain the potential benefits they

can derive, not least from taking full advantage of ONA 's

undoubted expertise. The then that ONA' s responsibility for

to key policy issues within

Prime Minister indicated in 1977 'national intelligence ' extended departments. In this context, I

belie ve that there remains scope for ONA to play a fuller role, although its size will necessarily require it to continue to be

selective. The recommendations I make in this report are designed to further this end.

15.

2.27 Although I examined JIO's role within the nation al intelligence community, the major focus of my inquiries at JIO was directed to the question of how effectively it meets the

demands of the Australian Defence Force and the Defence

Department. I see scope for improved co-ordination to assist in this respect. I believe there would be benefit in establishi ng machinery to enable JIO to interact more efficiently with its customers in the Defence organisation in order to ensure that

its priorities in ongoing work efforts and in reporting are fully attuned to their needs.

2.28 At present, JIO tends to spread its resources thinly over a wide range of issues. I consider that JIO would benefit from

more precise guidance from the Defence organisation,

particularly in respect of the need in existing strategic circumstances to maintain detailed tactical intelligence on the defence forces of as many countries as are presently covered. I have also identified other areas of JIO' s work which, in my view, need to be more directly related to clearly-stated Defence needs or in respect of which there is scope for greater

selectivity.

16.

CHAPTER 3

ONA'S ASSESSMENT ROLE AND PERFORMANCE

TH E NATURE OF ONA'S ASSESSMENT ROLE

3.1 As ONA's submission states 'ONA was establishe d essentially

to sharpen Australia's national intelligen ce capability. Intelligence production - the output of finishe d intelli gence to

meet the needs of national policy-makers - is its raison d'etre.'

3.2 Sub-section 5(1) of the Office of National Assessme nts Act 1977 expresses the first three functions of ONA as:

The

(a) to assemble and correlate information rel ating to international matters that are of political, strategi c or economic significance to Australia and -

(b)

( i) to prepare reports in relation to such of those matters as are of current significance; and

(ii) from time to time ae circumstances requ ire, to make assessments in relation to such of those matters as are of national importance;

to furnish reports prepared, and accordance with paragraph (a) to and other appropriate persons;

assessments appropriat e ma de, in

Minist ers

(c) to ensure importance basis;

that international developments to Australia are assessed on a of major

continuing

fourth function, relating to the co-ord ination of international intelligence activities, is addresse d in Chapter 5.

3.3 Sections establishment 6 and 7 of the Act provide

of a National Assessments

Economic Assessments Board (EAB) 'to

respectivel y Board (NAB) for the

and an

consider assessments

prepared by the Office', the latter to deal with 'matters

17.

primarily involving economic considerations'. Section 8 requires the Director-General to consult the appropriate Assessments Board in relation to each assessment, if practicable before furnishing the assessment. The Director-General and the Board are to endeavour to reach agreement; if agreement is not reached, the Director-General issues the assessment and he is to advise the recipients of the assessment of the matter on which opinions differ.

3.4 The Act also provides:

that a Minister or a prescribed officer may request a report or assessment (s.S(2));

that the Director-General is not subject to direction as to content or conclusions (s.S(4));

for the Director-General to arrange for contributions by others (s.S(3)); and

for the Director-General to have full access to all relevant information held by Commonwealth agencies (s.9).

3.5 The then Prime Minister, Mr Fraser, in introducing the legislation on 15 September 1977 Hansard, pp 1179-80), noted that: (House of Representatives

The Office will make objective reports and assessments, drawing both on intelligence and on other sources of information and expertise. The Office will avoid comment or advice regarding policy, although its assessments should obviously have relevance to, and assist in, policy formation.

3.6 The Prime Minister also noted that 'The Director-General will issue reports authority but will, and assessments from the Office of his own

wherever

assessment board before doing possible, consult the appropriate so'. He referred to the intention

'that the Director-General should have access to all relevant information and expert advice necessary ... '.

18.

3.7 The Prime Minister stated that ONA would be concerned with 'national' assessments. I have noted already the broad meaning he gave to

appeared to 'national' in that context and the overlap that be accepted between ONA's role and that of the Defence, Foreign Affairs and economic departments in relation to strategic, political and economic intelligence (2.13, 2.21 2. 26).

3.8 A key element of the new system was the independence

accorded to ONA in the making of assessments. At the same time, the legislation contemplated that ONA would work closely with other Commonwealth agencies involved in intelligence assessment. Undue duplication would thus be avoided and Ministers and other

policy-makers would have the benefit of a broad contribution. Notwithstanding the weight placed upon ONA' s independence from policy influence, it was no doubt recognised that policy departments would have a significant contribution to make to the

assessment process in areas for which they had a responsibility. They could also assist ONA in ensuring that its product is relevant to policy issues of interest.

3.9 ONA was, in effect, set up to be an independent centre of a co-ordinated intelligence process. It was not established as a 'think tank' to analyse issues and develop views in isolation from the rest of government. Neither was it simply to preside over an interdepartmental committee process. The independence of

its views from policy interests was protected, but the Assessments Board process provided the opportunity for contribution from at least some of the major policy departments.

3.10 ONA' s 'National Assessments' and 'Economic Assessments' assessments on matters of national importance in the terms of the Act are published following consideration by NAB or EAB. The legislative provision enabling a member of a Board to

record a dissenting view is seldom exercised. ONA's other publications treated as reports on matters of current significance in the terms of the Act are subject to less

19.

formal consultation processes necessari ly being incorporated. with dissenting The Act does not

consultative process for 'reports'.

3.11 ONA 's analytic staff is relatively small

views not

prescribe a

(about 35

analysts). While the range of issues which ONA could address is broad, its limited resources force it to focus its efforts on particu lar areas. This places a premium on the selection of issues for assessment in close consultation with consumers.

3.12 In my view, there are advantages in keeping ONA as a

relative ly small, lean organisation. Its compact size allows the Director-General's control to be real and effective and assists in the maintenance of control over the quality of product. Its compact size is also consistent with the notion of ONA being at the centre of Australia's assessments process but not seeking to duplicate or replace the bulk of the relevant capability of other agencies.

ONA's product

3.13 ONA issues publications in a variety of series. These are listed below with an indication of the numbers published for the reporting year 1982-83 (ONA reporting year has been 1 November -31 October; its annual report for 1983-84 covers the period 1 November -30 June and future reports will be on a financial

year basis). At Appendix D is a chart provided by ONA

indicating, with comments by ONA, the output year by year of publications other than weekly publications or watch reports.

3.14 ONA 'current intelligence' publications are issued in the following series:

Watch Reports (14 produced in 1982-83, but the numbers have ranged from 71 in 1980-81 to nil in some years, reflecting the number and intensity of major international crises) Current Reports (20 in 1982-83) Situation Reports (7 in 1982-1983) Current Situation Analyses (66 in 1982-83).

20.

3.15 There are also three weekly publications which, 1982-83, were issued as follows:

3.16

Weekly Summary - political/strategic (50 issues) Weekly Digest of Economic Intelligence (51 issues) Economic Intelligence Notes (50 issues).

ONA's submission indicates that the channels publishing longer term assessments are:

in

for

National Assessments, considered by the NAB (10 in 1982-83) Economic Assessments, considered by the EAB (none in 1982-83) Research Memoranda (11 political and 4 economic memoranda in 1982-83).

The Research Memoranda are said to have 'become vehicles of substantial assessment issued as ONA assessments not having the weight of Board endorsement.'

3.17 While there is no doubt a rationale for each series, I should think that a more limited range of reports would suffice and might facilitate handling and understanding by consumers of the nature and objectives of each series.

ONA'S EFFECTIVENESS AND EFFICIENCY

Quality of product 3.18 ONA's submission notes that 'the quality of ONA's product, measured by the often conflicting criteria of timeliness, relevance, accuracy, judgment, and clarity of expression, constitutes the main yardstick of ONA's performance'.

3.19 My examination of a range of ONA's product indicates that ON A' s output is substantial. Its reports and assessments are

clearly presented and well considerable assistance to argued and are

policy-makers.

21.

likely to be Its product of

is

generally of the quality that I had in mind when making the recommendations in RCIS. However, I regard it as more important to look to others, the main users of the product, for views as to its quality.

3.20 Consumers, including Ministers, appear to be generally happy with ONA's product and some spoke highly of it.

3.21 Departments have provided me with a range of comments. I shall endeavour to relate these comments to th e crite ria suggested by ONA, at least in broad terms. Other comments on ONA' s relationship with departments, including the interacti on

between assessment and policy interests, appear later in this chapter.

Accuracy, judgment and clarity 3.22 Departments generally seem to rate ONA's product highly in terms of what might be seen as its inherent quality - in ONA's criteria its accuracy, judgment and clarity of expression.

3.23 The Department of the Prime Minister and Cabinet informed me that it looks to ONA 'for information and assessments to

improve the quality of our policy advice' to the Prime Minister. The Department indicated that all its relevant areas 'rate ONA material highly in terms of its accuracy, reliability and readability' and that it 'can be uniquely informative when it deals with subject matter which is not well covered in the media or by international intelligence assessment product available to US I "

3.24 The Department of Foreign Affairs (DFA) offered the general comment that:

In our view ONA, as the principal national assessor of intelligence material on international and foreign developments, has come to provide a worthwhile service to the Government and its various agencies, including ourselves.

22.

3.25 The Department made a number of specific comments

'critical to some degree of how ONA goes about its tasks', but asked that they 'be placed in the context of our support overall for ONA and belief that it serves a worthwhile function'. The

De partment suggested that presentational interests tend

sometimes to lead ONA to make somewhat stark judgments rather

than acknowledge alternative views. On the other hand, the

De partment expressed concern at the length of some assessments.

3 .26 I indicate elsewhere my belief

in ONA' s product where possible any other departments. As far as the judgments is concerned, I see this as

in the value of dissenting views recording held by expression of ONA's own

very largely a matter for

decision by the Director-General. I should hope that he would indicate alternative points of view in appropriate cases. ONA should also keep a careful watch on length. I note that it commonly includes summaries at the beginning of its

publications, the object being to set out the key judgments so as to help the busy reader decide whether to read the piece in full or to move on. Nevertheless, where the text is long, even readers with a particular interest may be discouraged from delving more deeply.

3 .27 The Defence submission notes that its intelligence requirements are met either by JIO itself 'or by JIO serving as a conduit to ONA for assessment on rna tters going beyond JIO' s

charter'. ONA publications are of interest to Defence, particularly its Strategic and International Policy Division. Other comments ( 3. 33 3. 34) suggest that Defence is satisfied with the quality of ONA's product.

3.28 The economic departments have commented on ONA' s product mainly in terms of its relevance to their central concerns (see 3.35-3.41). There is no indication that they are dissatisfied with the inherent quality of the publications which they receive.

23.

Timeliness and relevance 3.29 There appears to be general satisfaction with ONA's political/ strategic product in terms of the related objectives of timeliness and relevance.

3. 30 The Department of the Prime Minister and Cabinet noted, in relation to 'policy relevance and responsiveness', that 'ONA assessment priorities are reasonably well attuned to the policy requirements of the Government, but there is room for

adjustment'. It sees room for some adjustment in balance from emphasis on current intelligence towards more longer term 'th ink pieces'.

3.31 The Department also mentioned that from time to ti me longer term assessments desirability of harmonising have been delayed, despite the

as far as possible the rhythm of

ONA' s work with the rhythm of Government policy-making. These

suggestions seem to point to the need for even closer liaison between the two agencies. Proposals which I make in this chapter should assist in this respect.

3.32 The general comment by Foreign Affairs about the

'worthwhile service' provided by ONA suggests that it does not have general concerns on the score of timeliness and relevance.

3.33 The Department of Defence indicates that the assessment capabilities of ONA are 'of fundamental importance to Australian defence'. The regular assessment of the international security outlook is said to be 'the single most important compilation of

intelligence indispens able provided to Defence'. It is regarded as 'an pre-requisite' for 'consideration of the fundamental strategic issues that are relevant to Australia's defence'.

24.

3.34 Defence also notes that 'JIO and ONA provide the

Department with intelligence for day-to-day policy

decision-making involving defence relations with other countries ... [and] ". " Defence Force activities overseas'.

3.35 The economic Departments tend to see the ONA product as less even in terms of relevance, as comment critical of ONA. but this need not be construed

ONA addresses its reporting

primarily to the Prime Minister whose requirements on a subject may be less detailed than those of a particular department. The

economic departments have a wide range of interests; the more narrowly ONA focusses on a specific issue, the fewer interested recipients there will be.

3.36 Moreover, I am well aware of the various ways in which the term 'relevance' can be used, ranging from direct relevance to the consideration of central policy questions to relevance for 'background purposes' only. I am also aware that material seen as 'useful background' may contribute in an important and often unrecognised way to the consideration of policy issues. Indeed,

such material often provides the basis upon which assessments immediately relevant to a policy issue are made. I am conscious too that in judging the 'relevance' of ONA's product, consumers will be highly subjective and that their comments need to be viewed against the background of their speci fie policy

interests, and against the extent to which they task ONA to contribute to assessment relevant to their policy interests.

3.37 Among comments by economic departments was a statement by Treasury that ONA' s 'think-pieces' are of 'some assistance' in addressing subjects which are 'of working interest to Treasury officers, although not of such direct or immediate relevance as

to require (or warrant) detailed analysis by our own officers'. Treasury also finds ONA' s analyses useful as 'second opinions' on specific matters.

25.

3.38 The Department of Resources and Energy submits that while it finds ONA's economic material to be generally useful, timely and, where it can be checked, accurate, there is 'a tendency to lack detail' and 'some duplication with the other available sources of intelligence'. Mention is made also of the lack of detailed intelligence analyses on countries which may be

important as competitors or as markets for our resources and energy exports, but on which limited intelligence is obtained by Australia .

3.39 The Department of Trade regards ONA's longer-term

assessments as useful background on wide-ranging and slowly developing issues, but considers that its relevance to Trade's formulation of policy advice cannot be ranked any higher than marginal.

3.40 Trade notes that there is a need for more .intelligence assessments on the prospects and policies of Australia's export competitors and for ONA's reporting to be more directly related to economic advantages and opportunities that are developing for Australia. It should be noted, however, that Trade does not make a practice of tasking the intelligence collectors to collect the

kind of intelligence which might facilitate such assessment (3.62-3.65).

3.41 The Department of Industry, Technology and Commerce notes that ONA's analyses range 'from moderately to very helpful'. The Department concludes that ONA material 'has not ranked high in terms of essentiality'. It also refers to improvements that could be made in the timeliness of ONA's material.

RELATIONS BETWEEN ONA AND CONSUMERS

Inherent scope for tension 3.42 There will always be a potential for conflict between an independent assessment body such as ONA and other agencies dealing with policy or assessment. ONA's role of providing

26.

independent issues may departments)

intelligence assessment lead to tension with relevant to national policy departments (or staff in

which, understandably, are sensitive about preserving their own assessment roles and possibly the primacy of their judgments on critical issues within their particular areas of expertise.

3.43 This potential sensitivity sterns from the overlapping responsibility of ONA and policy departments for assessments relevant to central policy issues. The interests of the intelligence analyst and the policy maker are not entirely

exclusive but they are separate.

3.44 The very purpose of having an independent body like ONA in the centre of an assessment process is to facilitate the preparation for the government of informed assessments that are not circumscribed by the policy perceptions of departments.

3.45 There is also potential for conflict over the line between assessment and policy. That line is not always clear and assessment, if it is truly relevant to policy issues, may have clear implications for policy. It is always possible that an assessment will not sit well with established policy attitudes

and policy-makers may not agree with, or welcome, such an assessment.

3.46 The Government gains

independent assessment. The though by having available to ONA assessment may not always

it

be

correct - ONA no more than any other agency of government has a monopoly of wisdom. It deserves no more than to have its

assessments judged on their rneri ts. An independent assessment can be valuable even if it only provides an occasion for testing and re-checking established views.

27.

3.4 7 ONA' s submission recognises that 'Intelligence assessment aims to support policy interests while eschewing policy advice'. It notes also that 'The usefulness of national intelligence is in illuminating the choices available to policy-makers and the limits upon them'. And again it states to be truly useful it needs to provide both independent and objective advice'.

3.48 It is basic to the maintenance of ONA's credibility as an assessment body that it should stay clear of policy advice. It is also fundamental that it should maintain its independence while drawing on the knowledge of, and being prepared to develop its think:ng in consultation with, other agencies.

Particular agency relationships 3.49 In the context of the preceding remarks, I turn to ONA' s relationships with some key agencies.

Foreign Affairs 3. 50 The Department of Foreign Affairs indicates that it is 'generally satisfied with the way our relations have developed with ONA since its establishment in 1977'. It outlines in some detail the extent of its involvement with ONA, including:

provision of many reports from posts;

participating in preparation of current reports and national assessments;

regular liaison at various levels from Secretary to desk officer.

3. 51 Although ONA submits that it 'is well satisfied with the character of its relations with Foreign Affairs', it acknowledges that the relationship 'can take on a competitive character from time to time or otherwise become strained'. ONA

28.

indicates that DFA is sensitive to intelligence judgments that offend policy interests. DFA middle-level staff are also said by ONA to have felt that ONA was taking over or simply duplicating

DFA 's functions .

3.52 DFA recognises in its submission that 'many departmental officers feared that ONA would seriously undercut the role and

responsibilities of Foreign Affairs'. But it adds that 'ONA's activities are now generally accepted within the Department and no longer seen as some sort of threat'.

3.53 DFA indicates, however, that:

While ONA acknowledges that policy advice is outside its area of responsibility, we have noted two recent occasions when ONA assessments have traversed the line that separates assessment from such advice. We accept that it can be difficult to define this line with precision e.g. the policy response can become inevitable or the policy options

limited once a particular assessment of an event or situation is agreed.

My examination of the two assessments concerned does not satisfy

me that ONA has exceeded its proper role. Its judgments may be

somewhat starkly stated in places and thus may provide some grounds in support of the DFA comment quoted in 3.25. But I

could not conclude that the two reports cited go beyond assessment to the espousal of a policy line. I note that both of the assessments were considered by the National Assessments Board of which DFA is a member.

Defence 3.54 ONA' s submission acknowledges that 'Initially there was clearly tension in relations between ONA and the Department of Defence'. This was seen as due in part to the fact that Defence had lost to ONA responsibilities for national intelligence, and

to 'suspicion on the part of Defence as to the calibre and relia bility of ONA's analytical work, especially as it bore on strategic interests'.

29.

3.55 ONA's submission notes that 'Over time, there has been a marked improvement in the relationship Defence's

submission notes that a senior offic er of the Strategi c and International Policy (SIP) Division attends most meetings of the deputy directors of ONA and JIO including the weekly planning meetings of the two agencies.

3.56 Although Defence acknowledges the importance of ONA input (3.33 - 3.34), discussions with senior officers in policy areas of that Department raise doubt as to whether ONA is being used by Defence as well as it might be. Whilst the convenience of

looking to JIO to arrange all assessment requirements is recognised, I believe more direct contact with ONA might be beneficial to Defence policy areas. I believe Defence Central should be represented, with other consumer departments, in the

formal programming and assessment machinery the Assessments Boards as they are now, or the successor consultative mechanism which I recommend.

3.57 A related proposal put to me by the former

Director-General of ONA is that the Director-General should be able to participate in Defence Committee meetings where he considers that the interests or product of the intellige nce community are relevant. While I have not examined this

suggestion in detail, I consider that the Director-General could have an important contribution to make. Care would need to be taken to ensure that the Director-General is not drawn into a policy advisory role. Subject to this, the possibility of his attending Defence Committee meetings, on appropriate occasions, as an observer warrants consideration by the Government.

JIO

3.58 ONA also acknowledges that in the period following establishment 'Relations between ONA and JIO were brittle, its

and

competitive interests found expression in sometimes petty ways'. Again:

30.

There has since been a steady improvement in the quality of relations between the two agencies as better understanding and acceptance of their respective roles has emerged, and habits of co-operation have developed.

However:

Sources of friction between ONA and JIO have not

disappeared, particularly at working levels, and are unlikely to do so, given the overlap of interests and redundancy in analytical capability between them.

Whilst this may be so, some sources of friction might be eased by the enhanced consultative processes I have in mind.

3.59 Economic greatest areas and strategic intelligence assessments were the of difficulty in the initial definition of work

responsibilities between ONA and JIO. Strategic assessment is a particular example of the overlap in responsibility between ONA and departments for assessment relevant to central policy issues and I discuss the matter below (3.71 - 3.83) and also from the JIO standpoint (4.108 4.115). Potential demarcation

difficulties in relation to economic intelligence have been lessened by the di f:i:erent focus of ONA and JIO with JIO being directed more to economic intelligence relevant to military capability.

Economic departments 3.60 As noted above, the economic departments tend to view ONA's contribution to economic intelligence as more

appropriately directed to background knowledge, whilst any issues of particular policy importance would be assessed by themselves. In these circumstances, so long as ONA does not put forward what can be interpreted as policy advice, there is less scope for demarcation disputes. This is not to say the right balance has been struck in their respective roles.

31.

3.61 I believe that ONA' s economic assessment role deserves greater recognition than it has apparently been given. At the time it was established, ONA was given authority to produce assessments which were 'of a level of importance warranti ng Cabinet reference' or 'of importance to basic Government polic y ' or 'having major implications for the basic premises of departmental policy' (2.13). I do not consider that the economic departments have used ONA 's resources as effectively as they might have in support of their development of national economic policies. I discuss the potential role of ONA in economic

intelligence later in this chapter (3.118-3.130).

3.62 ONA indicates in its submission that:

ONA has worked to demonstrate the usefulness of its econom ic reporting and to develop ways in which it can assist

departments. The effort has helped to break down scepticism but there remains considerable scope for: increase d recognition of the role that ONA can play in the promotion of national economic interests; improved ONA access to departmental information on overseas economic issues ; greater departmental participation in the assessment process; and more contact between departments and the Economic Division.

Some departments have been quicker to appreciate the usefulness of the Economic Division than others. This has been demonstrated by a difference in willingness to provide information to ONA and, in turn, approach ONA for

assistance. Trade has tended to be reticent on both scores, though not uniformly so. Treasury, the Department of Resources and Energy, and Primary Industry have been accommodating in the provision of information wh en approached. (Resources and Energy) has been quick to seek information when it recognised the value of informati on available to ONA. Foreign Affairs, a department which has a long acquaintance with intelligence, has welcomed ONA 's economic product and made a good contribution to it.

Some particular problems in relations with economic departments have been apparent in the production of national economic assessments. Instances of protracted and acrimonious debate have occurred over assessments whe re views expressed have conflicted with the policy stance of one or another department. To a degree, this is an

unavoidable fact of life.

32.

3.63 Trade explains its limited contact with ONA on the grounds that there are few gaps in its information which intellig ence sources or assessment could fill. It notes that most of the information it requires comes from open sources and from close

liaison with the export community. Trade sees itself as a

reactive organisation, responding to the pressures and opportunities of the market-place. A further factor is that ONA does not

reporting economic

interpret its on commercial reporting may

commercial considerations.

responsibilities to intelligence, though relate indirectly

include mu ch

direct of its

to longer-term

3 .64 Trade also maintains that there are very few gaps in its

knowledge of the international markets and/or agricultur e and

raw materials which form the basis of Australia 's export trade. It says that Australia's needs for intelligence diffe r from countries with a high technology export base.

3.65 I accept the validity of these arguments up to a point. I am also conscious that Trade has tended over a period to see

something inappropriate in an association between itself and the intelligence community. It seems that Trade considers that its task of developing working relat ions with the business, and in particular the export, community, would be made more difficult by any close association with an intelligence agency, whether it be a collector or an assessor.

Immigration and Ethnic Affairs 3. 66 One Department which has indicated an inter est in more intelligence reporting from ONA (and JIO) is the Department of Immigration and Ethnic Affairs (DIEA). That Department's submission claims 'a growing need for access to better

intelligence and intelligence assessments than are presently available'. It seeks access to the intelligence commun ity to help clarify how it might be assisted .

33.

3.67 DIEA has a potential interest in intelligence for two distinct purposes. First, it currently receives certain advice from J IO to assist its concerning boat refugee movements and it expresses an interest in

be of operational interest in particularly illegal entry. enforcement,

any intelligen ce the field of law JIO assistance in

operations ; which might

respect of DIEA operational interests is discussed further in 4.94 to 4.99.

3.68 The second interest perceived by DIEA is in intelligence, including assessments, which might assist it in developing policy relevant to refugees and immigration policy generally. Som e assistance has been provided over the years to DIEA by ONA

(and JIO) in the form of background briefings, particularly in relation to potential refugee movements. This arrangement appears not to have operated recently.

3.69 DIEA has not been closely involved with the intelligence community. Because of the sensitive nature of the sources, there are limits on the use to which it would be able to put certain intelligence which may be of relevance. Nevertheless, there may be more scope for ONA or JIO to provide it with intelligence material and analyses relevant to its general responsibilities.

3.70 I suggest that the Secretary of DIEA should approach the Director-General of ONA indicating the nature of his

Department's interests. co-ordinate a high level The Director-General examination of how the

might then

intelligence

community might assist having regard to any limitations on access or use. The Secretary of the Department of Defence would need to be represented in such discussions and there may well be merit in the Secretary of the Department of Foreign Affairs being represented also.

34.

Strategic assessment responsibilities 3.71 of

The ONA Act and JIO's charter refer to the responsibility each organisation to produce intelligence assessments relating to 'strategic' issues. There is, therefore, an area of overlap in which both organisations have a right to report .

3.72 The overlap in responsibility for strategic intelligence ONA submitted requires

that it: close consultation between ONA and JIO.

does not seek to stand in the way of JIO's developing

assessments that may have a national intelligence flavour when - because of other priorities - ONA does not intend to tackle the problem addressed in the JIO assessments.

3.73 Guidelines have been developed between the two

organisations. The Director-General of ONA, in commenting to the then Director of JIO on JIO's draft 'Publications Programme' for 1983-84, noted that it is to ONA's advantage for JIO to work in areas of interest to ONA, partly because of JIO's specific expertise and partly because ONA values 'an informed JIO perspective' on matters where ONA has some expertise.

3.74 The Director-General also pointed out that there should be close consultation between JIO and ONA on the occasions when JIO wanted to report on topics 'on which ONA writes (with JIO and DFA help) often' or had special expertise or which 'might with

advantage be turned into National Assessments'. The

Director-General added that where it was decided that a National Assessment was not warranted, ONA would appreciate receiving the JIO analysis in draft for comment.

3.75 The then Director of JIO expressed 'total agreement' with the consultative approach suggested by the Director-General on topics of overlapping interest. These guidelines provide the framework in which JIO and ONA seek to avoid unwanted

duplication in strategic and other assessments.

35.

3. 76 For the most part, the guidelines have been observed in practice; on a few occasions, they have not. A small number of JIO studies have been delayed or deferred because ONA considered that the issues would be more productively dealt with as National Assessments. On some occasions, no such Assessment eventuated . Other JIO reporting has been delayed or deferred because of ONA's slowness in commenting on JIO drafts. On some

of these occasions JIO could perhaps have pressed ONA at a more senior level to resolve the problem.

3.77 I do not consider such problems to be more than isolated cases. Nor do I believe that there are any real difficulties, in principle, with the present arrangements for settling responsibility for assessments where responsibilities overlap. I suggest below (4.111), however, that Defence should look more to ONA for broad strategic assessments.

3.78 I believe that the recommendation I make below for more intensive and regular consul tat ion between ONA, its consumers and the other intelligence agencies (including JIO) will provide

additional safeguards against repetition of the few instances where overlapping assessment responsibilities did result in some problems.

3 . 79 In fulfilling its strategic intelligence responsibility,

ONA obtains military intelligence support from JIO (and I would

expect this to continue). ONA has made efforts to acquire a military specialist with a Service background to contribute to its analytic work and to facilitate its liaison with JIO. The Defence organisation, however, has not been willing to assign a military officer to ONA.

3.80 I can understand the concern that Defence and JIO see in the possibility that the availability of such advice within ONA might encourage ONA to neglect proper consultation with JIO. Nevertheless, ONA's statutory responsibilities include reporting

36.

and assessment on international matters that are of political, strategic or economic significance to Australia. Whilst in all these areas it draws on JIO and departments for information and assistance, it must ultimately exercise its own judgment.

3.81 I believe that ONA's strategic judgment would benefit from a direct and continuing contribution by appropriately qualified

milita ry officers who are closely involved in, and hence well attuned to, the perspectives of ONA's assessment process. ONA needs a measure of military expertise 'in-house' just as it has on its staff officers with Foreign Affairs experience and economists from the Treasury. The military officers would not be

the sole source of strategic assessment but would work with other ONA officers and in consul tat ion with JIO. I am also of the view that ONA's interaction with JIO, particularly in relation to ONA's tasking of JIO, would be facilitated by the presence of 'in-house' military personnel.

3.82 I believe that Defence should assist ONA by making perhaps two or three military personnel available to it as part of their regular rotational postings. These should be officers from any of the Services, with experience in JIO desirable and with proven records in strategic assessment to enable them to make a

real contribution to ONA' s analytical work. The military officers would need to be made responsive to the direction of the Director-General ONA, who would also need a say in

selection. It should not be too difficult for ONA/JIO to settle suitable ground rules to ensure JIO's role in support of ONA is not supplanted by such arrangements.

3.83 I am aware that Defence remains unpersuaded by these

arguments. The Chief of the Defence Force continues to express concern that the result will be less than full consultation with JIO. The Secretary to the Department has a similar concern, and also indicates doubt as to the availability of sufficient

37.

suitably proposal qualified is an

officers. important Nevertheless, one, going

I

not

believe only that the to ONA' s

effectiveness but to the reinforcement of the community of interest between ONA and the Defence organisation. I suggest that my proposal be implemented at least for a trial period of, say, two years.

Departmental support and liaison 3.84 Consumers of ONA's product are generally in a position to influence the quality of that product by the support they provide to ONA in its assessment work. Policy departments need

to keep ONA well informed of their needs, and to task it

specifically as appropriate, if they are to receive current intelligence and assessments which are timely and relevant to policy. They must also facilitate ONA's access to their own data bases if they are to get assessments which are accurate and well

founded.

3.85 The ONA Act not only gives the Director-General ONA a right of access to relevant data bases, but also authorises the Director-General to arrange for others to make contributions to reports and assessments. The original concept of ONA, included in the Department Secretaries' recommendations endorsed by the then Government, envisaged that ONA's small analytical staff would draw on research and analysis undertaken elsewhere in the bureaucracy.

3.86 This objective has not been achieved in practice and an overwhelming proportion of ONA product is drafted by ONA's staff. ONA accepts that competing priorities limit the extent to which it can gain research support and that there is little

incentive for other agencies to provide drafts for ONA to publish.

38.

3.87 ONA has established a number of procedures and informal mechanisms for liaison with departments to keep itself informed

o f their policy interests and of specific tasks which they would

like ONA to undertake. The departments which are involved in the Assessments Boards have the opportunity at Board meetings to

comment on assessments, and some scope to discuss future

assessment needs, although the Boards are not formal mechanisms for programming or tasking. Other liaison takes place less formally but more regularly.

3 .88 ONA submitted that it:

feels well attuned to the interests of Foreign Affairs, Defence (principally through JIO), Resources and Energy, Treasury and International Division of Prime Minister and Cabinet. Among policy departments that could be expected to have intelligence interests, ONA has least connection with Trade.

3. 89 The Department of Prime Minister and Cabinet indicates that its weekly consultations with ONA 'help keep the Office in touch with current pol icy development and with the Government's

priority interests'. It questions whether the potential of these meetings is being fully realised at present with the level of ONA representation having tended to fall away. ONA informs me

that its Deputy Director-General (Political and Strategic) has been engaged on special duties and has been unable to attend, but that it values these meetings highly.

3.90 The access which departments afford ONA to relevant information which they hold is largely satisfactory. ONA noted in its submission that such access has varied considerably. Foreign Affairs 'is generous and to a large degree automatic', although there are some slip-ups. ONA now appears to have

satisfactory access to JIO data banks and improved access to other Defence holdings.

39.

3. 91 As noted in 3.62,

provide informat ion to economic ONA has

departments' varied. ONA willingness to indicates that

'Treasury, the Departments of Resources and Energy, and Primary Industry have been accommodating in the provision of informatio n when approached'. Trade has tended to be reticent. Reports from Trade Commissioners overseas, for example, are not supplie d to ONA as a matter of course. They are only provided when specific

report s are requested by ONA.

3.92 In RCIS, I identified a need for effective interac tion between intelligence assessors and policy departments and I foreshadowed the need for concerted liaison efforts to draw other departments into the assessment process (3-327).

3.93 I am of the view that more willing participation by departments in tasking, provision of information and even drafting could be encouraged by ONA through more systemati c , high-level consultation and by more regular involvement of departments in the programming and development of ONA product; ONA product could also acknowledge the extent of such

participation. Furthermore, this process might assist in fillin g the gap on feedback which ONA referred to in its submission as follows 'One of the frustrat ions of intelligence analysts is the lack of feedback from consumers of their product'.

3.94 ONA has commented that 'Deliberately, because it does not want to have its flexibility limited, ONA does not have a long-term work program'. I appreciate the need for flexibil ity . However, consultation in development of a forward work program, as well as in the ongoing analytical work, would seem a

necessary prerequisite to developing acceptance by poli cy departments of ONA's potential as a supporter of their work rather than a competitor.

40.

3.95 ONA does in fact now discuss its proposed current

intelligence work program with customer departments through various mechanisms and distributes a monthly forward planning program which covers all ONA's planned product. But in my view this desirable process could be carried further with advantage to all concerned. I take up this matter later.

SOME KEY ISSUES

Reports or assessments 3.96 The Act draws a distinction in stating ONA' s functions between the preparation of 'reports' and the making of 'assessments'. Section 5(1) (a) provides that it is a function of ONA to assemble and correlate information relating to

international matters that are of political, strategic or economic significance to Australia. It goes on to refer to:

the preparation of reports in relation to such of those matters as are of current significance, and

the making, from time to time, of assessments in relation to such of those matters as are of national importance.

Section 5(l)(b) provides for the furnishing by ONA of such reports and assessments to Ministers and other appropriate persons. Another function, provided for in s.5(l)(c), is to ensure that international developments of major importance to Australia are assessed on a continuing basis.

3.97 The distinction between 'reports' and 'assessments' assumes a significance in s. 8 which requires the

Director-General to consult the appropriate Assessments Board in relation to each assessment made by him. There is no such requirement in relation to the making of reports, although the Prime Minister's Second Reading Speech in 1977 (2.14) could be read as envisaging consultation on both reports and assessments.

41.

3.98 It could be argued that the

s.S(l)(a)(i) are limited to reports reports referred to in which bring to notice,

without any assessment, a piece or pieces of intelligence which has been assembled or correlated by ONA. It would have to be argued, to support this narrow reading, that the reference to 'conclusions' in s.5(4) related only to the word 'assessment' in that sub-section and not to 'report'. I would regard a reading which confined 'reports' in s .S(l)(a) factual reporting as too narrow. It reports may in fact contain little

to straight or largely may be that particular

more than assembled or

correlated items of intelligence. However, it is clear, I believe, that ONA's reports generally do, and no doubt should, include evaluation or assessment as well, to an extent which may vary from case to case.

3.99 Nor do I think that the distinction between 'reports' and 'assessments' hinges on a distinction between current intelligence on the one hand and longer-term issues on the other. The legislation relates 'reports' to matters of current significance but that does not necessarily preclude an element of longer-term assessment in relation to such matters. And while

'assessments' on matters of comprehend assessments directed assessments could just as well

national importance clearly to longer-term issues, the be directed to matters of

particular moment in the short-term.

3.100 The distinction drawn in the Act hinges rather on whether the subject matter - being an international matter of political, strategic or economic significance to Australia - is 'of current significance' or is 'of national importance'. If it is the former, a 'report' is the appropriate form. If it is the latter, an 'assessment' is appropriate, and the Director-General is required to consult the appropriate Assessments Board.

42.

3.101 ONA submitted that:

Far more than may have been intended, current intelligence has become the predominant vehicle of assessment. National assessments are 1 imi ted to especially weighty and reflective studies that require careful and considered judgment. In

practice, they are relatively few and the Assessment Boards do not meet often.

'The relative infrequency of Board meetings' is said to reflect in part the deterrent formality of the Board mechanism'. ONA explains that the mechanism consumes much time and resources and is therefore seen as sui ted to the production of very important matters only. Reference has also been made to cases where in the

course of drafting a report it became apparent that the subject matter may have warranted a national assessment but a change in the format was decided against because of the formality of the Board process. I note, however, that the Act does not prescribe

the procedures to be followed by the Boards but provides for those procedures to be 'as directed by' the Director-General (s.6(4), s.7(4)).

3.102 Foreign Affairs in its submission indicated concern at a tendency by ONA to take a narrow view of the issues which should be treated as national assessments rather than current reports. It noted that:

Questioning also has been directed towards an apparent tendency to publish an increasing proportion of reports as current intelligence, with a more limited opportunity for comment, rather than as national assessments which are

subject to more intensive outside scrutiny, including by the two national assessment boards.

3.103 DFA also referred to the possible counter-productive effects of this approach in regard to ONA's need to draw

departments, particularly the economic departments, into the assessment process:

We believe the proper functioning of the EAB is a necessary element if the apparent and regret table reluctance of the major economic departments to participate in the preparation of national economic assessments is to be overcome.

43.

3.104 The Director-General of ONA suggests that the former Prime Minister's description of the nature of national assessment s indicated that they would deal with matters of particular importance and great weight. He further suggests that their nature as a rule permits a more measured process of consultati on.

3.105 However one states it, the question whether a subject is properly to be treated as a matter of 'national importance' , as distinct from one merely of 'current significance', calls for an exercise of judgment. It is not a question that lends itself to precise answer. My own impression is that somewhat more of ONA's product in recent years could appropriately have been treated as national assessments than was the case. I refer below (3.157 3.158) to a reduction in recent years in the number of national

output of assessments and a significant increase in the publications in one or other of the 'current series. I am not convinced that the time

intelligence' available for

consideration of an issue should be a determinant of its categorisation. Assessment Board procedures should be flexible enough to deal with an important issue that requires prompt consideration; the ONA Act itself allows for the possibility of consultation of the Board after furnishing an assessment (s.B(l)).

3.106 The judgment whether a matter is one 'of national

importance' , so as to call assessment rather than by for treatment by current report,

way of

falls national on the

Director-General. In practical terms what hangs on the exercise of that judgment is whether or not the statutory procedure for consultation with one of the Assessments Boards will operate. At present, ONA in effect categorises a publication by producing a draft in one format or other. Customers of course do have an opportunity, in commenting on publication proposals or drafts, to suggest that any particular item be treated as a 'national assessment' and considered by an Assessments Board. In practice,

44.

they appear to fall in with ONA's categorisation. ONA informs me that in no case has a department complained to it about

inappropriate categorisation.

3.107 My view is that there would be advantage in a system which involved relevant agencies and departments more formally in the consideration by the Director-General of the question whether ONA

should address a particular matter and, if so, whether by a 'report' or by an 'assessment' in the terms of the legislation. Such a system, which I canvass below, would also provide a more

structured basis for consultation on a wider range of ONA product. The formal classification would then become of less significance.

Competitive or co-ordinated intelligence 3 .108 As noted in 2 .13, the Government's position in 1977 was

that ONA was to be concerned with national assessments, with 'national' encompassing matters cutting across portfolios and, if I can summarise it so, matters of basic importance to government

policy even within one portfolio responsibility. At the same time, the Government protected the right of departments to undertake assessment essential to their statutory

responsibilities. Defence retained under its authority a separate intelligence capacity to be provided by JIO.

3.109 There was thus established a situation of overlapping responsibilities without clear guidance as to how this should be handled. One possibility might have been for ONA to take precedence - which might perhaps be implied but would immediately

raise the further question of who determines whether a matter is truly 'national'. Another possibility is that the Government might have been looking for alternative sources of assessments.

3.110 In the United States, the intelligence activities (Executive Presidential Order governing Order No. 12333 of United

States Intelligence Activities - December 4 1981, 46 F. R. 59941) specifically requires competitive intelligence analysis:

45.

1.1 Goals: The United States intelligence effort shall. provide the President and the National Security Council w i ~ . the necessary information on which to base decisi ons concerning the conduct and development of foreign, defe n c e ~ and economic policy, and the protection of United States 1 national interests from foreign security threats.

(a) Maximum emphasis should be given to fostering analyti cal . competition among appropriate elements of the '

Intelligence Community.'

3.111 While the notion of 'competitive intelligence'is well established in the United States, the scale of operation there is vastly different from Australia's. I question whether Australia can afford, or Ministers and senior officials would welcome, a fully equivalent system.

3.112 What seems more appropriate process that brings together the in our circumstances assessment agencies

is a

and

consumer departments in order to ensure that all available information and relevant views are drawn upon and taken int o account. The independence of the intelligence judgment from policy considerations - the importance of which I pointed out in RCIS - hinges on ONA's key role in the process. The preparation

by ONA of an independent assessment does not, however, preclude ONA from considering the views of departments which have a

detailed knowledge of the subject and of recording, for the convenience of Ministers and other consumers, other views which may exist. I emphasise that a process of this kind does not

require, and should not involve, the subjugation of the judgment of an assessment agency to the views of any other agency or department.

3.113 ONA has always recognised the need to draw upon the views of policy departments. To the extent that it prepares nation al assessments, the opportunity for consul tat ion is provided formally through the Assessments Boards. But 'curr ent intelligence' reports, although they may contain substanti al

46.

analysis or assessment, are not considered by the Assessments Boards. In practice ONA does consult departments on these publications. The consultation is less formal than with national assessments. However, it provides an opportunity for departments

to correct inaccuraci es, to point out omissions, and to contest major judgments. There is no arrangement for, or practice of, recording expressions of dissent.

3.114 The national assessment process no longer involves drafting by the Boards themselves, although a good deal of the draftin g is done by subsidiary working parties. The process need not and should not lead to a system about which ONA expressed apprehension to me namely, one which 'fosters contrived

agreement on the basis of lowest common denominator judgment'. The Director-General of ONA has clear authority under the Act to

ensure that the assessments he publishes are not undermined in such a way, and he has exercised that authority when consulting the Assessments Boards.

3.115 I regard it as very important that other departments should, subject to practical constraints such as time available, continue to be given full opportunity to contribute to ONA's more substantial product. Thi~ opportunity should extend to

having a dissenting view recorded if necessary.

3.116 While a department is not precluded from producing its own assessment on a

sense for departmental the assessment being

subject being addressed by ONA, it makes efforts to be directed to contributing to prepared under ONA's auspices. The Act

quite rightly does not require ONA to gain the responsible department's agreement that a subject is one of national importance on which ONA might publish. It is desirable, however, that ONA seek to obtain acceptance with a view to maximising departmental co-operation. This could best be achieved through

the consultative processes which I propose.

47.

3.117 The way in which a department deals with a relevant ONA assessment in any policy submission to its Minister is of course a matter for the department. I would see it as desirable that

the submission should draw attention to the ONA assessment, with any comment that it considers appropriate. Should a department feel unable to await an ONA assessment currently underway or planned, its policy paper desirably should note that fact so that Ministers are aware of the proposal and have the option, if circumstances allow, to await the outcome of that assessment.

Economic intelligence 3.118 The Act directs ONA to political, strategic and economic intelligence; it gives no particular weight to any. one of the the three broad intelligence areas. Political and strategi c issues have long been accepted subjects of intelligence interest but I found it necessary in RCIS to express concern at the 'lack of use made of the economic intelligence available in Australia'

(3-181). In recommending a new independent agency to take intelligence assessment away from Defence/Foreign Affairs control, I sought to encourage the economic departments to participate more. Whilst some progress has been made, the discussion of economic departments' views of ONA product and their relationships with ONA indicates the need for examination of the scope for further development.

3.119 ONA undertakes a range of reporting on international economic issues which affect Australia's national interests. ONA does not interpret its responsibilities to include direct reporting on commercial intelligence, nor does it task the collection agencies to collect such intelligence. Where ONA analysts, in the course of their normal assessment duties, come across intelligence data which has direct and substantial national commercial implications, ONA undertakes to alert the appropriate department. Moreover, some of ONA's economic

48.

assessments (e.g. the recent report on Soviet agriculture) can assist departments in considering longer-term commercial opportunities.

3.120 Only a limited amount of ONA 1 s economic analysis is based on secret intelligence, although intelligence information frequently stimulates ONA interest in speci fie issues. Economic information tends quickly to become public knowledge, so ONA 1 s

task is often one of putting a piece of intelligence into a broader context. On occasions, secret intelligence can be very important, especially in relation to assessments on closed economies. ONA 1 s economic product relies less on secret

intelligence than does ONA 1 s strategic/political reporting. For its economic analysis, it has to draw heavily on reports and statistics from governments and international organisations (IMF, World Bank, OECD, GATT, etc.), some of which receive only limited circulation in government departments, and on published reports, statistics and comment.

from secret the economic

3.121 ONA1 s limited use of information derived intelligence reflects not only the nature of assessment process, but also the restricted range information available to it.

of such

3.122 Partly no doubt because of the limited amount of secret economic intelligence and partly perhaps because the economic departments have traditionally operated at a remove from the intelligence community, ONA has

role in economic assessment as assessment. Another reason for analysis impinges on only a

not developed the same central it has in political/ strategic this is that ONA1 S economic

few sections which deal with

international economic issues in government economic departments. The main focus of those departments is,

necessarily, on domestic economic matters. Nevertheless, ONA has economic expertise and access to information, particularly on

49.

closed economies, readily digested which is not widely and assimilated by

available or cannot policy departments. be

Its

economic assessments have the potential to provide a valuable service in a number of ways.

3.123 First, ONA addresses itself relevance to one or more economic to issues department

which are

(or which of

cut

across their responsibilities), but which those departments are not themselves likely to address in any depth because of limited resources, more urgent priorities, or other reasons.

3.124 Secondly, even where an economic department undertakes its own analysis of a assessment will usually particular issue

be made in the

or development, that context of providing

policy advice to the relevant Minister and will commonly not be circulated to other Ministers or departments. An ONA report has the benefit of bringing an in-depth assessment of an economic issue or emerging economic opportunity to the attention of a wider audience.

3.125 Thirdly, ONA can

assessments on issues of major institutional or policy bias.

provide national Economic

ONA's assessments useful either in

extensively researched significance free from departments should find confirming their own

judgments, or in viewing a familiar economic issue in an unfamiliar way. Furthermore, ONA can use intelligence sources to provide a broader perspective in relation to those economies on which detailed data or specific characteristics are not openly or easily available.

3.126 Restrictions on distribution of highly classified material can cause difficulties for the effective use of ONA product within the economic departments. These departments, which are less accustomed to dealing with such material than Foreign Affairs and Defence, for example, tend to restrict ONA reporting to a limited number of senior officers.

so.

3.127 ONA is aware of the need to classify its economic

analyses at as distribution to However, some

classification. information more

a level as possible to enable a wide low desk officers in the economic departments. of necessity require high cases, consumers can distribute the material In these

widely if

does

they so wish by issuing internal

summaries at a lower classification. One economic department appears to manage to do this quite effectively.

3.128 The economic departments have tended to use the

restricted amount of secret economic intelligence currently available to Australian agencies for analysis as an excuse for having limited relationships with the intelligence agencies, including minimal tasking by them of ONA. The intelligence community and the economic departments have not adequately worked O:Ut what kind of economic and commercial intelligence is

required in the short or long term to support policy-makers, what is currently available, what could be collected

independently with existing resources, and what collection and assessment capabilities should be developed to fulfil national requirements.

3.129 I consider that there is an urgent need for ONA, the other intelligence agencies, and the economic departments to assess together the policy areas where the economic departments consider that economic intelligence data and analyses currently make a useful contribution and those areas where, with increased

effort and resources, it may be able to make a significant contribution in the future.

3.130 This joint assessment would not only assist the ordering of intelligence collection priorities but it would encourage the economic departments, in particular, to focus on the scope of, and need for, economic intelligence . It would also enable ONA to plan its long-term future with some assurance that new sources

51.

of information will become available to it. It could be a fir st step in the process of substantial review of the role ONA and the intell igence comm unity generally are to play in economic intelli gence.

The consultative process 3.131 The NAB considers assessments that are primarily non-economic in character. The ONA Act (s.6(2)) lays down that the NAB shall include:

(a) an officer of the Department of Foreign Affairs; (b) an officer of the Department of Defence; (c) a me mber of the Defence Force; and (d) an officer of the Australian Public Service, not being

an officer of the Department of Foreign Affairs or the Department of Defence, who has expertise in economics.

3.132 In practice, the NAB is chaired by the Director-Gener al of ONA, with other members being a Deputy Secretary from Foreign Affair s , the Director of JIO (fulf illing the requirement for Defence Depart ment

(Military) from JIO from ONA. Although

representation), the Deputy and the Deputy Director-General not inconsistent with the

Direct or (Economic) Act, this

representati on involves only ONA, JIO and Foreign Affairs.

3.133 The ON A Ac t (s.7(2)) lays down that the EAB shall include:

(a) an officer or officers of the Australian Public Service (not being an officer or officers of the Department of Foreign Affairs) who has or have expertise in econom ics; and (b) an officer of the Department of Foreign Affairs.

3.134 In practice, the EAB is normally chaired by the Deputy Directo r-General (Economic) of ONA. Other members are the Director, Defence Economic Intelligence, JIO; representatives at First Assistant Secretar y level from Foreign Affairs , Treasury and Trade; and at Assistant Secretary level from Industry and Co mmerce. The Department of Resources and Energy attends EAB meetings when its interests are involved and other departments may be invite d to participate should the need arise.

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3.135 The limited use made of the Assessments Boards as a

result of the declining number of publications formally styled 'National Assessments'is indicated in the following annual statistics of meetings:

NAB EAB

1977-78 10 5

1978-79* 39 13

1979-80 16 12

1980-81 8 9

1981-82 13 10

1982-83 8

1983-84 (8 months) 3 2

TOTAL 97 51

(*The 1978-79 figures include numerous meetings during which the original Australian Security Outlook was the subject of detailed development).

3.136 On the economic side, no national assessments have issued through the EAB in the last two years. Yet the EAB was the only formal machinery established which could provide an opportunity to involve economic departments in tasking ONA and contributing, where necessary, to its product. Between September 1982 and April 1984 there were no Board meetings at all. Recently, the

EAB has been re-activated and, to date, the terms of reference

for four national assessments have been approved.

3.137 ONA consults with departments less formally in preparing 'current intelligence' product and research memoranda. I have suggested that at least some of these publications might appropriately have been considered by the Boards. I believe

53.

development of the more substantial assessed product through a formal consultative machinery is, in any event, in the intere sts of ONA and consumers. There are, of course, timing problems but these should not be insurmountable, particularly with the provision enabling consideration of urgent assessments after their distribution.

3.138 The

particular approach. It

Department of concerns about Foreign the basis

Affairs indicates some of ONA's consultat ive

claims some tendency by ONA officers to be unduly defensive of their drafts and suggests unnecessarily tight deadlines for comments have been set in some less urgent cases. ONA rejects these assertions and suggests that Foreign Affairs

has a tendency to wish to rewrite drafts to suit its polic y interests.

3.139 These criticisms by Foreign Affairs and ONA each of the other reveal at the least unfortunate misunderstandings and unnecessary frictions. Whilst it should be seen in the total context of generally co-operative relationships between the two agencies, that state of affairs needs early remedy. What is needed are procedures and practices which enable consultation on ONA publications to function smoothly. My proposals should

provide an appropriate framework within which these can be worked out.

3.140 Foreign ONA holds weekly

Affairs as the programming meetings with JIO and other strategic/political assessment

agencies. ONA analysts are required to discuss their future work programs with customer departments before preparation of their work programs, which are compiled and distributed to customers on a monthly basis. Moreover, ONA participates in meetings with various departments with a view to keeping in touch with the interests of policy-makers. Such meetings with Department of the Prime Minister and Cabinet, Defence and Foreign Affairs take

54.

place at least weekly but with the economic departments the contact is less structured. These bilateral discussions, however, do not provide the opportunity for exchanges between ONA' s customers; they are no substitute for multilateral discussion.

3.141 In several places in this chapter and in Chapter 2, I have canvassed the importance of involving the policy

departments more extensively in ONA's work. My strong view is that the best hope of achieving this objective wouln be to have those departments participate to a greater extent in development and monitoring of ONA's work program and its product. This should be done under the auspices of a formal interdepartmental committee process.

3.142 I accept that it would be impracticable the product of ONA, including the most urgent, to require all to be considered formally by all interested departments before issue. It is probably unrealistic and unnecessary, for example, to expect to have departments formally consider the weekly bulletins before

issue. But this is not to say that interested departments should not monitor the weekly and other urgent productions and provide ONA with feed-back at regular meetings.

3.143 The committee should formally consider all of the more substantial assessed product before its issue, except where timing constraints make this impracticable. These publications should then show the extent of consultation that has taken place as well as any dissenting views. They should also acknowledge the input from any department that has made a particular

contribution to the drafting of the assessment.

3.144 Where an urgent assessment is issued without committee consideration, provision should be made for ONA to circulate to recipients of a publication any dissenting view which may be notified, after distribution, by an interested department.

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3.145 In the committee process, ONA should make reasonabl e efforts to resolve areas of disagreement; it should not , however, press to submerge alternative views, and departments should not be reticent in having their dissenting views recorded on significant issues.

3.146 I would not see it as a necessary prerequisite for the issuing of an assessment committee to indicate a for all departments represented on the

firm position in support of the ONA

view, nor, alternatively, to dissent formally. Nevertheless, each assessment should indicate the extent of consultation and it is reasonable for consumers to assume that departments no t dissenting have no substantial difficulty with it.

3.147 It is important for departments and Ministers to recognise that acceptance of an ONA assessment, or a decision not to dissent from it, is not binding for policy development purposes. There may well be factors, properly not addressed in an assessment, which suggest to policy advisers and

policy-makers a course of action different to that which might appear to flow from the ONA assessment.

3.148 I see a need for a new body - I suggest it be called the

National Intelligence Committee (NIC) - which would be chaired by ONA and which would include senior representatives of policy departments and JIO, with representatives of the intelligence collection agencies present as observers at least. The NIC would probably need to meet fortnightly to consider ONA assessments and advise the Director-General on his work program. It could also play a role in advising on

collection priorities (see Chapter 5). intelligence needs and

3.149 which The NIC would replace the existing Assessments Boards, I do not believe are adequate to monitor a

multi-disciplinary national assessment process. Much of the NIC

56.

wo rk would be developed through sub-groups, as informal drafting

groups currently operate. Formal NIC clearance of product should

not involve

contention. detailed It may be

debate except appropriate to on major issues of

set a minimum quorum,

additi onal to ONA, of a representative each of DFA and Defence for consideration of political/strategic assessments and perhaps Treasury and one other economic department for economic assessments. The National Intelligence Collection Requirements Commi ttee should also operate as a sub-committee of NIC. NIC's

main attention would tend to be focussed on programming and identifying at that stage arrangements for development of particular publications, and on broad oversight such as review of NAP and of NICRC .

Focus of Assessment Regional or global

3.150 As I discuss below (5.24 - 5.25), ONA saw an early need

for some direction from government on the focus of its

assessment work. The National Assessment Priorities (NAP) were

developed by ONA and submitted to government for endorsement.

3.151 ONA's focus is not exclusively regional. Geographic

does not always determine Australia's primary proximity interests, especially in areas such as economic interests,

disarmament, the strategic implications of the balance of power between the superpowers and those local balances of power where change could affect Australia's interests or security.

3.152 ONA has expressed the view that:

Australia's engagement in the wider world, and its national interests, require a capability - however small, cheap and modest - to assess international developments for ourselves.

agree with that view.

57.

3.153 There has been no particular indication that consumers of ONA product are less than happy with the focus of ONA Is

reporting. Nevertheless this is another area that needs to be kept under review in consultation with consumers and this process would be facilitated by regular consultative machinery.

Current or longer term focus 3.154 The balance between short-term and longer-term focus in ONA's reporting is a separate question from the categorisation of

publications, referred to above, as either 'reports' on matters of current significance or 'assessments' of matters of national importance.

3.155 ONA's submission states that

the requirement for timely intelligence to meet the needs of policy-makers has encouraged an increasing emphasis in ONA 1 s work on current intelligence. This has sometimes been regarded as a diversion from ONA's main task, the provision of longer-term 'think pieces' It is not current

intelligence is an integral and central activity of ONA, not just something to be fitted into the interstices of longer-term assessment work.

3.156 I have no quarrel with this point of view. The Act gives no particular emphasis to longer term assessments as opposed to current intelligence support. I see the two functions as complementary in their support of policy-makers. I note ONA' s view that the use of a common pool of analysts for both tasks, as I recommended in RCIS, 'has demonstrated convincingly its practical worth'.

3.157 I agree with ONA that the division of effort between current intelligence and longer term assessment 'is a question of balance, which no formula can prescribe'. Publications statistics (Appendix D) imply an apparent significant swing towards current

intelligence. There has been a significant decline in 'national assessments', from 33 in 1978-79 to ten in 1982-83 and only two

58.

in 1983-84 (8 months). (In each of the last three years there has been considerable effort put into major strategic assessments so the publication figures understate the national assessment effort.) Over the same period current reporting has increased, particularly the 1 Current Situation Analysis' (CSA) introduced in

1980-81. Totals for the three main non-weekly series increased from 37 in 1978-79 to 93 in 1982-83 (including 66 CSAs).

3.158 swing I have not attempted to represents a change of

assess how much of this apparent focus and how much might be a

question of categorisation. The Department of the Prime Minister and Cabinet has indicated an interest in more longer term assessment and some ONA analysts themselves questioned the balance in their discussions with me. But I do not wish to pass

judgment. Again, it is a matter of keeping in close touch with consumers to ensure that their needs, which will vary over time, are known and met as far as possible.

CONCLUSIONS

3.159 ONA 1 s achievement in establishing for itself the role that it has in the machinery of government is a considerable one. In RCIS, I concluded that the then existing arrangements had not assured, and could not assure, independence and objectivity for

the intelligence assessment process (3-323). To a very real extent, ONA has already succeeded in overcoming that deficiency.

3.160 Consumers of ONA 1 S product generally seem to be happy with its quality in terms of accuracy, judgment and clarity of expression. A number of recipients of its publications have expressed high regard for ONA 1 s work. The economic departments raise some question about relevance.

3.161 In my view, ONA will not achieve its full potential while economic departments tend to see it as a producer of useful

59.

background material, but not as properly involved in areas of real policy interest to them, which they feel they must assess themselves.

3.162 It is no easy matter to persuade policy departments that they should look to ONA to provide national assessments in their areas of prime interest. Nevertheless, the intention was that ONA should contribute assessments on matters of national importance and not only to co-ordinate assessments cutting across portfolio

interests. To avoid undue duplication, there is a clear need for ONA to consult closely with the policy departments which might be

doing assessment work in the same field.

3.163 There

Departments to is scope

recognise for

and

ONA

use

more actively its analytical to encourage skills and to

co-operate with it in its work. This would seem best to be attempted by involving policy departments in a systematic way in developing its work programs and in developing its publications. There is

without scope for

breaching more interaction with policy the need for assessments to

departments be clearly

independent. The more urgent, and some of the more routine, reporting (including the weekly publications) might need to be given special treatment but even then there should be scope for monitoring and expression of any real dissent after publication, along the lines of the procedures under s.8 of the Act.

3.164 Fortnightly meetings of a National Intelligence Committee (NIC) of senior officers of ONA, JIO and all relevant policy departments should monitor the ONA work program, review ONA' s product generally and, where time permits, consider the more substantial assessments before publication. NIC might also play a wider role in support of ONA's co-ordination responsibilities

(Chapter 5) " ASIS and DSD should also be represented at NIC meetings, at least as observers. Much of the work of NIC should be done through subsidiary groups so as to minimise the demands on the time of senior officers. Its role would be basically advisory; it would not have executive responsibility.

60.

3.165 I emphasise that I see it as important for the

Director-General ONA to retain ultimate responsibility to publish intelligence reports and assessments. However, policy departments should have a better opportunity to participate and Ministers and senior policy-makers should be made aware, at least in relation to all substantial assessments, where alternative views exist.

3.166 Pending the required amendment of the ONA Act, I believe that the objectives I have in mind could be achieved by using the two Assessments Boards sitting together as the full National Intelligence Committee. I believe, however, that there is a need to legislate as soon as possible to establish a truly national intelligence commit tee. This legislation will also help to give weight to ONA's role as co-ordinator of external intelligence.

3.167 Special efforts will be needed to develop more fully ONA's potential role in economic intelligence. It will be necessary first for departments and agencies to examine the realistic limits of that role, and clarification of the potential for

collection appropriate of more

starting economic point. The intelligence

difficulties would found in

seem the

handling

classified economic product also need to be considered.

RECOMMENDATIONS

3.168 I recommend that the existing arrangements for

consultation between ONA, JIO and policy departments be reviewed and more formally structured to draw senior officers of those bodies more closely into ONA's reporting and assessment processes, in relation to both programming and product. At the

same time, the process should bring ASIS and DSD into closer contact with both assessment agencies and departments and ensure that they are fully attuned to the needs of those agencies and departments.

3.169 I recommend that:

(a) a National Intelligence Committee (NIC) be established;

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(b) NIC should be chaired by Director-General ONA, representation preferably at First Assistant Secretary with level or above from policy departments, including Foreign Affairs, Defence Central, Prime Minister and Cabinet, Treasury , Trade, Resources and Energy; Director JIO should also be a me mber ; representatives of ASIS, as observers; and other

DSD and perhaps ASIO, should attend

departments should be invite d to

attend from time to time, as appropriate;

(c) NIC should:

( i)

( i i)

(iii)

provide guidance to publication program; Director-General ONA on ONA's 1

consider ONA's assessments and generally monitor itsl publications;

discuss intelligence needs and collection prioriti es;

(d) assessments, including any reports with substantial J considerati on analytical content, should be subject to formal by NIC or in accordance with arrangements agreed by NIC (e.g. by a sub-group of interested members perhaps with a minimum quorum) before their publication unless urgency preclu des this;

(i) ONA should indicate in these publications the extent of consultation, give recognition to any significant departmental contribution and include any dissenting I views, or circulate such views if they are received after publication of an assessment (as may occur when assessments are issued as a matter of urgency);

( i i) more routine or regular current reports (including weekly publications) should continue to be subject to informal consultation but should be generally monitored through the NIC;

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(iii)

( i v)

departments should provide regular feed back on ONA reporting to ensure that it is relevant to policy interests;

ONA should seek the views of NIC on the structure of

its publication series and format of publications;

(e) NIC should meet fortnightly but sub-groups (e.g. drafting groups) should meet or consult more frequently to assist in development of assessments, in programming and in identifying intelligence needs and collection priorities;

(f) the Director-General ONA, while having the benefit of views expressed in NIC, should continue to be ultimately

responsible for the ONA work program and product.

3.170 I suggest that, pending passage of required amendments to the ONA Act, the NIC arrangements could be introduced

administratively, using joint sittings of NAB and EAB with the same range of departments and agencies as proposed for NIC.

3.171 I also recommend that, as an early priority, NIC examine the role which ONA has to play in meeting medium to long-term intelligence support requirements of economic policy-making. The aim should be to clarify what can be achieved within the existing resources of the intelligence community and what intelligence collection and assessment capabilities are needed to service the optimal requirements of the economic departments.

3.172 This determination of the medium to long-term intelligence requirements of the economic departments should be undertaken in much the same way as strategic and political intelligence

requirements have been Collection Requirements refined in the National Intelligence Committee (NICRC). Relevant economic departments should be involved.

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3.173 I suggest that consumers of ONA's economic product should make increased efforts to circulate such product to an effect ive

working level within their own ranks. ONA will need to pay continued attention to the classification of its material at as low a level as is appropriate. It might also advise and perhaps assist consumers in providing desk officers with a more lowly-classified summary.

3.174 I recommend that a small number of appropriately qualif ied military officers should be posted to ONA to serve as integrat ed members of the Political/Strategic Division and that, in the event of continuing Defence reservations about this proposal, it should be introduced first on a trial basis for a two year period.

3.175 I suggest that the Government consider whether the Director-General ONA should be given an opportunity to attend Defence Committee meetings, to advise on matters of intelligence, and should be provided with agenda and papers to enable him to raise with the Chairman occasions when his attendance would be appropriate.

3.176 The Director-General of ONA should arrange with the Secretary of the Department of Immigration and Ethnic Affairs for examination of the intelligence requirements of that Department and how they might be met. The Secretary of the Defence

Department and, perhaps, the Secretary of the Department of Foreign Affairs, should be involved.

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CHAPTER 4

JIO'S ROLE, PRIORITIES AND PERFORMANCE

INTRODUCTION

4 .l JIO was established in 1970 followi ng the Report of the

Special Committee on Intelligence Matters chaired by the then Cha irman of the Chiefs of Staff Committee, Lieutenant-General Sir John Wilton. JIO replaced the Joint Intell igence Bureau, which had been established in 1946, and assumed responsibility

for those aspects of the work of the single Service intelligence

directorates concerned with order of battle intelligen ce and ancillary research, joint assessments and technical intelligence.

4.2 Following although, as the Third RCIS Report, JIO continued to operate outlined below, its responsibiliti es changed considerably. In responding to that report, the then Government established the Office of National Assessments but made it clear

that departments would continue to fulfil functions in relation to the collection and their existing collation of intelligence. Nor were departments precluded from engaging in research, analysis and assessment essential to the discharge of their statutory responsibilities or of functions derived from the responsibilities of their Minister.

4.3 The intelligence needs of the Defence organisation received special attention. Department Secretaries Committee, established to consider the RCIS Reports, agreed on what they regarded as the 'Intelligence Requirements of the Defence Organisation'. These 'Requirements' , later endorsed by the Government of the day, stated in part that:

The Defence Organisatio n (Minister, Defence Force and Department) requires in war and peace intelligence

collection, collation, research, analysis and assessment specifically related to its responsibility for the nation's military security and defence activity (whether planning and preparation or actual military operations in war).

65 .

The Government also agreed with the Department Secretaries' view

that:

The Defence Organisation will require to retain under its authority an intelligence capacity substantially as now provided by the Joint Intelligence Organisati on.

4.4 JIO's role and functions have been refined since the ti me of RCIS. Its primary responsibility, in peace and war, is to serve the particular intelligence requirements of the Defence organisation. JIO briefings, including

meets these requirements through oral the Director's regular weekly briefing of the Minister for Defence, and other regular or ad hoc briefings, or through the provision of publications and written briefings. In addition, JIO supports ONA in the areas o f expertise it (JIO) has developed as a result of its Defence responsibilities.

4.5 The 'Intelligenc e Requirements of the Defence Organisati on' provide the framework in which JIO develops its statement of 'Intelligence Priorities', and thus its longer-term research program and the allocation of its resources. The 'Requirements ' are wide-ranging in their scope and demanding in their detail. They identif y the need for analyses relevant to Australia's

strategic environment and military security, assessments of likely threats, the compilation of detailed data relating to the war potential and tactics of possible adversaries, evaluation of international developments in defence technology and intelligence support for major Defence policy decision-making.

4 .6 Following RCIS, the Government clearly accepted that there

would be overlap in responsibility between JIO and ONA in strategic assessment. It decided that ONA should look to other agencies, not least JIO, for assistance in carrying out its national assessment role. The Directive issued to the Director of JIO in November 1978 by the Secretary of the Defence

Department and the then Chief of Defence Force Staff (now Chief of the Defence Force) instructed the Director to be 'sensitive to the development of new and constructive working relationships

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with ONA I. I have already examined aspects of these

relationships in Chapter 3 and I address such issues again in this chapter in terms of their effect on JIO's functions.

4.7 There is a clear need for the Defence organisation to continue to have access to timely and reliable advice on international military developments, and on other matters relevant to defence. I concluded in RCIS that there should be no diminution or decline in the defence intelligence activities

then being undertaken and that, in fact, more rather than less needed to be done (3-240). I also fully agreed in RCIS with the opinion of the then Secretary of the Defence Department that:

comprehensive, perceptive and timely intelligence of a politico/strategic and military nature is of crucial importance in ensuring Australian security from military threat or pressure (3-217).

I again fully endorse that view, but that is not to say that JIO

needs to be the exclusive source of all such intelligence.

4.8 In my inquiries into JIO, Organisation's activities, the I have examined the range of the relevance of its product to

consumers, its relations with other agencies and its role within the Defence organisation.

4. 9 In general, I have concluded that JIO is a competent and professional agency, addressing a wide range of issues and undertaking a variety of tasks, many of which demand careful attention to detail over a long period of time. A good deal of JIO's product is valued by consumers and it contributes to

strategic analyses and the consideration of policy issues within Defence.

4.10 In my view, however, there is scope for the Defence

organisation to give clearer and more precise guidance to JIO on

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its intelligence requirements. I believe that JIO' s work could, with advantage, be focussed more directly on specific areas and issues. I address this matter further in this chapter and make recommendations for improved consultative arrangements that should lead to some rationalisation of the tasks which JIO now seeks to undertake.

4.11 JIO needs to guard against becoming set in a fixed mould, both in terms of the organisation of its analytic resources and the nature of its analytic product. JIO's product and its internal structure need to be orientated primarily to the needs of consumers within the Defence organisation. I believe that there is scope for those needs to be more clearly articulated and for their fulfilment by JIO to be more carefully monitored.

4.12 JIO has an important intelligence role to play both within the Defence

community. It developments

organisation and the has developed a detailed and related information

national intelligence knowledge of military in areas of strategic

interest to Australia. Its maintenance and analysis of relevant data bases demand consistent and painstaking attention to detail. This expertise gives JIO a clear, within the Defence organisation, in the community and in the processes of government. me that some JIO officers appear to be less

identifiable role wider Yet

than

intelligence it has struck fully certain

about the role and purpose of JIO and its place in the scheme of things.

4.13 There appears to be some lack of clear understanding within JIO about day-to-day work priorities and, more fundamentally, about whom the Organization serves and who are its primary customers. Some analysts are uncertain of the balance which JIO, as a Defence agency serving both CDF and the Secretary of Defence, should the Services and to those aim for in directing its product to areas of Defence concerned with

68.

broader strategic issues. This doubt leads to the situation where JIO' s product is sometimes not what its customers expect it to be. I address these issues further in this chapter.

SCOPE OF JIO'S ACTIVITIES

Functions 4.14 JIO allocates its resources to the fulfilment of four major tasks:

undertaking routine collation (including data base maintenance), research, analysis and reporting

implementing its Publications Program

preparing for conferences, visitors, etc.

responding to special tasking (usually from the Australian Defence Force (ADF) and the IJefence Department), providing briefs on specific issues, giving lectures, etc.

4.15 JIO performs both an encyclopaedic and an analytic role. It needs to draw together, collate and record a vast amount of detailed military and other defence related information. It also needs to analyse, assess and interpret this information in order to service intelligence requirements of the Defence organisation and to respond to ad hoc tasking from others.

4.16 JIO' s data base maintenance involves the processing of a vast amount of detailed information from all available sources, as well as the collation and storage of it to enable quick retrieval. This routine processing work forms the base for all other JIO activity and is the source from which JIO services the detailed intelligence requirements of its customers.

69.

4.17 JIO's assessment work contributes to detailed polic y decisions on the national defence effort. Its assessment and military capabilities of other countri es reporting on the (particularly those in the area of primary strategic interest to Australia) provide an important contribution to decisions about the character and size of the ADF, including the selecti on of equipment and weapon systems. JIO also provides important support to the ADF in the planning and execution of operati ons and for ADF units that may be deployed outside Australi a, whether purposes.

for

JIO priorities

operational, peace-keeping or disaster relief

4.18 The priorities for the allocation of for JIO's longer-term research program and its limited resources are set out in the statement of 'Intelligence Priorities' endorsed by the Department Secretary and CDF. The statement is developed within the framework of Defence's 'Intelligence Requirements' ( 4. 3) and is consistent with the strategic outlook previously endorsed by the Government in the Defence assessment of the 'Strategic Basis of Australian Defence Policy' and also with the National Assessment Priorities. JIO's Intelligence Priorities are

finalised after consultation with JIO's major customers within Defence.

4.19 There are three aspects of the current procedures for determining JIO' s Priorities to which I draw attention. First, JIO's Intelligence Priorities statement differentiates between high, medium and low priority tasks, but within these

classifications it lacks guidance on the relative significance of particular issues. Both the Priorities document and the statement of the 'Intelligence Requirements of the Defence Organisation', for example, make appropriate references to the

70.

importance of both general 'strategic' analyses and detailed 'tactical' intelligence, but neither indicates the priorities to be allocated between them nor the level of resources to be assigned to each.

4.20 This practice provides the Services and consumers of JIO product in the Defence Department with little indication of the priority which JIO intends allocating to their concerns and interests.

particular

4.21 Secondly, JIO (and perhaps the ADF) would benefit from clearer Defence guidance on priority tasks. One of ADF's intelligence requirements are so the reasons why the

(and, to some within JIO, is inadequate guidance therefore on the

unrealistic) need which

wide-ranging is that there the Defence

organisation sees for the collection of detailed intelligence on particular countries of the kind that would be required for possible ADF operations. As a result, the ADF's requirements tend to lack specific focus.

4.22 JIO (and probably the ADF as well) would be greatly

assisted if Defence could give authoritative, regular and specific guidance on the extent to which it is necessary in relation to particular countries to maintain detailed data on military capabilities, including doctrines and tactics, and on other aspects potentially relevant to military operations (e.g. economy, industrial base, infrastructure, geography and social

structure). Priorities need to be established between the countries in respect of which such data is required. While there may be a need to maintain broad data about the structure of

defence forces in other politico/strategic reporting, countries, for more detailed

the purposes of

studies (of tactics

and doctrine, economic base, etc.) may not be required in the short to medium term. The Defence Intelligence Committee, which I recommend later in this chapter, will have an important role

to play in this process.

71.

4.23 Thirdly, while there is adequate opportunity for JIO to discuss its priorities with its major ADF and Defence Department customers, there are inadequate arrangements for multilat eral exchanges of view among those customers. The Intellig ence Priorities document is re-issued approximately every three years and, although reviewed annually, these reviews do not

necessarily involve round-table discussions with customers . There is currently no forum in which consumers of JIO product can on a regular basis review jointly the practical effect of the Priorities document on the balance of JIO's activities, such as that between 'strategic' and 'combat' intelligence.

JIO publications 4.24 JIO's formal publications assume a number of forms. Maj or studies are issued as strategic Estimates'. More particular analyses

'Defence Intelligence (the majority of JIO's

publications) are published as 'JIO Reports', while military studies on specific countries are issued as 'JIO Studies'. In addition, there are 'Technical Intelligence Briefs', 'Working Papers' and miscellaneous items, such as briefs prepared for major ADF exercises.

4.25 'The JIO also issues a variety of Defence Intelligence Bulletin'

current intelligence is published on a items. weekly

basis and supplements are issued as appropriate. The 'Service Intelligence Summary' ( SISUM) is distributed telegraphically as required (up to three times a fortnight). There are also periodic publications. There is a monthly 'Surveillance of Foreign Non-Combatant Vessels in the Australian Maritime Surveillance Area', quarterly reviews of 'Maritime Naval Activity in the Indian Ocean' and 'Maritime Activity in the Pacific Ocean', a half-yearly review of 'The Security of Air Base Butterworth' and a 'T echnical Intelligence Digest' three times a year.

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4. 26 In

Estimates, 1982-83, 37 JIO

JIO published Reports ( 21 two

of

Defence Intelligence which were periodic

publications), one Technical Intelligence Brief, two JIO Studies, one Working Paper and the current intelligence i terns noted above.

4.27 In 1983-84, JIO published one Defence Intelligence Estimate, 61 JIO Reports (44 of which were periodic

publications), six JIO Military Studies, three JIO Working

Papers and the normal current intelligence items.

4.28 JIO issues a 'Publications Programme' at the beginning of each financial year to provide a range of suitable projects for JIO's planned research and reporting effort. It is prepared within JIO after separate consul tat ion with JIO' s major customers - the Secretary of the Defence Department, CDF and the Director-General of ONA. An internal JIO group, the Programme and Research Committee, reviews the 'Publications Programme'

throughout the year in order to refine the direction of JIO' s activities.

4.29 The JIO Publications Programme aims at taking account of intelligence priorities agreed by the policy areas of Defence and the ADF, expected∑ international developments, special Defence interests, specific tasking by other JIO customers, particularly ONA, and the currency (or otherwise) of earlier JIO reporting. The program lists the reports planned for production by each of the research Branches of JIO for the current

financial year.

4 .30

comes

In practice, JIO's formal published product generally within its Publications Programme. In 1982/83 and 1983/84 almost all of JIO's publications were derived from the relevant program.

73.

4.31 A significant proportion of the JIO Publications Programm e is not completed within the year in question. The 1983-84 output, for example, fell significantly short of the 1983-84 program (prepared in June 1983), with well under half of the programmed items being published.

4 .32 The Intelligence Estimates (IE) Branch's own output o f

publication for 1983-84 was only two publications against a program of that this h igh level

partly due

some 23 items.

was due partly

of special ad

The Acting Director of JIO informs to staffing problems, hoc tasking laid on to some delays and difficulties

partly to IE Branch

with ONA

determining its publication program.

me

the

and

in

4.33 I am aware that JIO' s Publications Programme is not a comprehensive statement of its work program. Other elements include regular and ad hoc briefings to Ministers and Defence and other personnel, responses to ad hoc tasks, mainly from the Defence Department, contributions to ONA assessments and current

intelligence, conference papers, imagery analysis product, and data base maintenance. IE Branch is very much involved in these other activities, is subject to much special tasking and often makes a significant contribution to other Branch publications . Furthermore, the Acting Director of JIO has submit ted that the proportion of the Publications Programme that will be completed as published product during a given year will depend on a number of factors including the amount of special tasking from customers, changing priorities and availability of adequate

information sources or analyst expertise on particular subjects.

4.34 I still have doubts, however, about the desirability of JIO issuing the annual Publications Programme in a form which far exceeds likely achievement. If (as happens) a significant proportion

there is

of it is not completed within the specified year, the danger that consumer expectations will be

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disappointed and also, perhaps, that the motivation of JIO analysts will be diminished. (The Acting Director JIO indicates that there is no evidence of such reactions occurring). In my view, JIO's annual schedule for publications should set more

realistic targets having regard to available resources and JIO's other tasks. If JIO considers that it requires some additional framework for directing its activities over the longer term, it could compile a separate work program for this purpose. JIO advises that consideration is being given to presenting the

Publications Programme more as a rolling program for resource planning and publication aims.

4.35 JIO's assessments informative and of value publications, however, I

of specific to consumers. have noted

military issues are In examining JIO's that the style and

presentation of JIO' s reporting does not always lead to easy reading. The reporting tends to be descriptive and detailed and to contain a good deal of background information (e.g. on historical and social issues). My impression is that the

reporting could at times be more forthright in its comments and conclusions.

4.36 I recognise that these attributes may well derive from the expectations and needs of the organisations and readers for which JIO caters. Questions of format and style for JIO's reports are properly left to be settled by JIO in consultation with its major consumers within Defence, but I suggest that

these matters should be reviewed more regularly. I believe that the consultative arrangements which I recommend later in this chapter will provide an appropriate forum for exchange of views on these questions.

RELATIONS WITH CONSUMERS IN DEFENCE 4.37 The statement of 'Intelligence Requirements of the Defence Organisation', which was endorsed by the Government in 1977

75.

following its consideration of the RCIS Report, identifies the major areas in which JIO is expected to provide expert advice. In the sections that follow, I assess the adequacy with which JIO is meeting these expectations, given its existing resources.

I focus, in particular, on:

the views of the major consumers of its product

the allocation of its resources among apparently conflicti ng priorities

the co-ordination of its work priorities with its Defence and non-Defence customers.

Views of JIO's Defence customers 4.38 The intelligence requirements of the Defence organisation include input relevant to:

the development of defence policy

the planning of

infrastructure and other equipment

the strategic basis of Australia's

military force the procurement of structures, defence weapons systems and

the formulation and development of ADF planning to ensure that it is appropriate to the military doctrine and tactics of possible adversaries

the deployment and operational activity of ADF units in peace and war.

The Defence Department also requires three main kinds of intelligence assessments global assessments, time-urgent intelligence provided on a day-to-day basis, and assessment and analysis of trends in specific areas or on specific issues.

76.

4.39 The Defence Department has submitted that the intelligence needs of both the Department and the ADF are currently met

adequately by JIO, although there are some limitations at present regarding information on tactical and

logistic methods, and electronic warfare information. operational

4.40 From my inquiries,

and ADF customers it appears often have that JIO's Defence

Department differing expectations

of JIO. Whereas Defence Department customers require broad-based

intelligence data that will assist long-term planning needs and

strategic analyses, the ADF's interests are more orientated

towards detailed tactical intelligence on how foreign defence forces will wage war. Each group tends to seek more of the

intelligence product relevant to its own concerns and to express some scepticism about the level of JIO resources allocated to producing intelligence which is not directly relevant to its own immediate interests.

4.41 It would not be appropriate (or possible) for me to determine a proper balance in the allocation of JIO resources to meet the differing intelligence requirements of the Defence

organisation. In the sections that follow, however, I examine JIO's current allocation of its resources and the adequacy of the guidance which it receives from Defence in determining it.

Defence Department 4.42 The major consumer of JIO's mi 1 i tary and strategic

reporting within the Defence Department is the Strategic and International Policy Division (SIP). SIP's demand for such JIO material has increased over recent years as a result of Australia's widening defence and strategic interests and the

increasing need for detailed analyses of military developments and capabilities in areas of strate gic interest to Australia.

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4.43 Relations between SIP and JIO have been further

strengthened by recent initiativ es which will involve the two in joint analytic work. SIP has involved J IO in the production of a

series of Foundation Studies to assist in the evolution o f thinking on issues relevant to the 'Str ategic Basis' document. JIO and SIP are also closel y involved in developing planning to meet contingency situations that could directl y effect Australia's security . Bo th these developm ents rep resent constructive attempts to make JIO's assessments and reports more directl y relevant to polic y issues.

4.44 SIP has a significant need and a high regard for J IO' s product. In three areas, however, it has some reservations about its usefulness and relevance. First, as the Defence submission notes 'some of its (JIO's) in-depth reporting inevitably cannot be as timely as might be desired '.

4.45 Secondly, there is a concern within SIP that JIO should be giving more attention to addressing strategic issues and less to maintaining detailed data on the order of battle of foreig n defence forces and to compiling intricate military studies on countries of only marginal relevance to Australia's physical security. This view leads to a third consideration within SIP -that JIO's activities and allocation of resources could be more directly related to the requirements derived from the Strate gic Basis document. SIP believes that if the focus of JIO's wo rk could be shifted in this way, JIO would be better able to me et

effectively and in a timely way the tasks which SIP would like to lay upon it.

4 .46 JIO's assessment work includes defence-related economic analyses designed to assess the economic capacity of a country

to wag e war. These analyses focus on assessments of foreign milita ry budgets, the resource vulnerability of particular countries and the volume, type and direction of their trade (and

78.

aid received) in military equipment and other defence-related items. JIO distributes its economic product to a variety of consumers within the Defence Department, including the Force Development and Analysis, Defence Industry and Materiel Policy and SIP Divisions.

4.47 Defence consumers consider (EI) in

the reporting Branch to be

published useful

3.36 in relation to

by

for JIO's Economic Intelligence background purposes (I noted product that material seen by the consumer as relevant ONA's

for

background purposes may be of more value than the term

suggests), but rarely directly related to their consideration of specific policy issues. Over recent years, they have rarely tasked EI Branch on particular issues, with the result that most of the Branch's own publications have been self-initiated. EI Branch contributes to, or comments on, publications issued by other Branches. The number of its own publications is limited.

In 1982-83, it issued three JIO Reports; in 1983-84, it produced the same number of reports and one working paper. I address the issue of Defence consumers' needs and JIO's economic output further below (see 4.116-4.120).

Australian Defence Force 4.48 JIO's involvement with the ADF, both organisationally and functionally, is very close. The Director of JIO is directly responsible to the Secretary of Defence and CDF for the work and management of JIO. The Services contribute over one-third of JIO' s total manpower. JIO supports ADF units on deployment and participates in major training exercises.

4.49 JIO has a range of direct dealings with the Services. The Deputy Director Military (DDM) the senior intelligence adviser to the CDF briefs the CDF on a weekly basis. JIO personnel

regularly brief service officers at senior and intermediate level. The Director of Intelligence (DINT) in Joint Military

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Operations and Plans (JMOP) Division and the three Service Directors of Intelligence, none of whom are subordinate to J IO , are members of the Joint Intelligence Advisory Committee (JIAC), which assists in fulfilling its

responsibilities JIO

to the ADF. The Directors of

intellige nce Intellig ence

liaise continuousl y with JIO through the Service Estimates Staff in SI Branch.

4.50 In his submission, CDF noted that ADF has a

requirement for 'combat intelligence' the

and 'strate gic

intelligenc e'. He defined the former in terms of:

that knowledge of the enemy, weather and geographic al features required by a commander in the planning and conduct of tactical operations.

He noted that 'strategic intelligence', on the other hand, is:

intelligence which is required for the formulation of polic y and military plans at national and international levels.

'Strategic' and 'combat' intelligence are not mutually exclusive concepts. There will be important areas where they overlap; but in terms of the detail required and the uses to which they are put, there are significant distinctions between them.

4.51 JIO has a responsibility (though not an exclusive one) to provide the ADF with both combat and strategic intelligence. The ADF's requirements in these areas will vary in scope and detail according to strategic circumstances. In his submission, the then Chief of Joint Operations and Plans (since renamed Assistant Chief of the Defence Force (Operations)-{ACOPS)), noted that the ADF's intelligence requirements in peacetime were those necessary to carry out planning and preparation for the ADF's wartime role and to support it in its operational tasks.

4.52 ACOPS identified these peacetime requirements as including:

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factors influencing other nations' attitudes and intentions, war capacity, development plans, mobilisation capacity and likely support from other countries a continuous flow of data on the operati onal and logistic concepts and doctrine, tactical methods, organisation, weapons, equipment, command control and communications

systems of armed forces in Australia's Area of Primary Strategic Concern.

JIO's operational role 4 .53 In present circumstances, the Defence organisation does

not see a need to plan in any detail the organisational

responses which might be demanded of it if the ADF were to be involved operationally. This approach stems partly from the current 'no threat ' assessment, but largely from the fact that such organisational responses and detailed planning will depend on the nature of the crisis, the extent of ADF involvement, the attitude of personalities occupying key positions in the Defence organisation and other factors.

4.54 The Defence Department does develop models relating to low level contingencies, contingencies of greater military involvement and high-level contingencies (such as an attempted full-scale invasion of Australia). It concentrates on the first two, given the present unlikelihood of the third. It examines

military implications and requirements that are likely to emerge, including intelligence requirements, but does not look in detail at the organisational implications. One reason for this is that, in the contingency models which are developed,

elements within Defence such as JIO could be expanded and the focus of their war~ may become more concentrat ed on a particular target without fundamental changes in the existi ng structure of the Defence organisation.

4.55 The extent of the Defence organisation's planning in relation to JIO's precise role in a contingency situation or war is limited. One view is that it is important for the Defence

81.

organisation to retain flexibility and adaptability in responding to crises as they emerge. Nonetheless, it would seem desirable for some preliminary consideration to be given to JIO's responsibilities in such situations, no t least in terms of possible implications for JIO's present role and activities.

4.56 Planning JIO' s role in an operational situation involves two principa l concerns JIO's involvement in the wider Defence intelligence effort and internal changes in the way JIO would operate. Wi th regard to the first issue, JIO would play a crucial role in the early stages of a crisis since it would possess data banks of relevant intelligence as well as traine d

intelligence would be one

analysts. The increased of the first results of

JIO's reporting would be expected

demand for intelligence a developing crisis and

to provide detaile d

information on the adversary as well as on the developing military situation.

4.57 Once hostilities had begun, JIO would need to analyse and interpret all available intelligence (including that provided from ADF units) and would need to liaise closely with the Directorate of Intelligence in JMOP. JIO would also need to relate its work closely to that of other co-ordinating groups such as the National Watch Office, the ADF Command Centre

(ADFCC), within which there is a Joint Intelligence Cell, and the Joint Planning Committee.

4.58 The channels through which CDF would receive intelligence advice in wartime and the roles of JIO and other relevant groups in this process are not clearly defined. I accept that the specific circumstances of a national crisis or war will determine the precise demands which are made of JIO.

Nevertheless, I am surprised that there does not appear to be an

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agreed position at present on such fundamental issues as the respective wartime roles of JIO, JMOP and the ADF generally in assessing operational intelligence and in providing advice to CDF on such issues.

4.59 JIO's There are some within JIO and Defence generally who regard role in analysing and advising CDF on operational

intelligence in wartime as limited and secondary to its responsibilities for assessing the broader strategic environment in which the operations take place. This view is based in part on the apparently wide-ranging role in co-ordinating operational

intelligence which is laid down in Joint Service Publication (JSP) (AS) 19 for the Directorate of Intelligence within JMOP, its Director (DINT) and the Intelligence Co-ordinator.

4.60 There are others 'seamless garment' and who regard

who consider

defence intelligence as a that JIO, because of its

expertise and resources, necessarily has a central role in all aspects of intelligence assessment, both strategic and operational. This view receives apparent support in paragraph 504 of JSP (AS) 19 which states that 'in contributing to the ADF

requirement promulgation operations'.

for

of

intelligence, operational JIO's tasks intelligence in

include support the

of

4.61 I accept that many issues of this kind will be settled once the nature and extent of a particular contingency is more clearly foreseen. I also acknowledge that, ultimately, JIO's role in such a contingency would be decided by what the

Minister, the Secretary and CDF demanded of it at the time. Nonetheless, I do consider that planning activities within JIO and the Defence organisation generally would be assisted by a clearer understanding of the role which would be likely to be

required of JIO in wartime or other emergency (particularly in relation to advising the CDF on operational intelligence

83.

matters). It needs to be borne in mind that, while the

intelligen ce requirements of the military would expand rapidly in an emergency, there would certainly be no diminution in the demands of Ministers and departments.

4.62 I believe that particular attention needs to be given to clarifying the roles of JIO and DINT within JMOP during an emergency. The Acting Director JIO informed me that the

relationship is 1 evolving 1 " It may be inappropriate to regulate the relationship too closely at the present time, but I consider that the evolution of the roles of DDM and DINT which is now taking place needs to be given clearer definition and greate r direction within a broader Defence framework.

4.63 A second aspect of JI01 S contingency planning concerns the internal changes which an emergency would demand. I am referring to requirements such as 24-hour, seven days a week operation, the re-direction of resources to concentrate on a particular target, the provision of additional analytic and support staff

(with appropriate security clearances), the acquisition of appropriate linguistic resources and the need for an improved information flow to, and secure communications with, the increasing number of Ministers, departments and agencies which would require information from JIO, including tactical

information.

4.64 JIO has taken the initiative in addressing many of these issues, both internally and in groups such as JIAC. At this stage, thinking on them is still being refined and developed. On some aspects (such as the need for more and better secure

communications) there is clear agreement, but lack of adequate funds to achieve progress.

4.65 The clarification of JI01 s role in providing strategic and operational intelligence advice to the Secretary and CDF in

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wartime or an emergency situation could be assisted by more active JIO involvement in the planning, conduct and review of major ADF exercises such as KANGAROO '81 and '83. Such

involvement could also enable JIO to identify more clearly the internal changes which emergency situations would demand of it.

4.66 I accept that it is very difficult

test JIO's capacities properly and that 'manufacture' raw intelligence product of

for ADF exercises it is impractical the kind and in

to

to

the

quantity that would flow into JIO in wartime or other emergency. Exercise planners need to examine, at an early stage, to what extent it is possible to overcome these problems. I am also

aware of the normal reporting and data base maintenance which JIO needs to carry out.Other areas of Defence, however, also have day-to-day work pressures but have managed to play an active and useful role in ADF exercises, such as KANGAROO '83.

4.67 There are important lessons to be learned from more extensive interaction between JIO and the ADF in major training exercises. JIO would become more aware of the questions which the ADF would ask of it in war; the ADF would gain a better

understanding of the role which JIO would play; and both JIO and ADF personnel could work out their respective roles in

intelligence co-ordination and, in particular, the contribution expected of each to the ADFCC.

Representation on Defence committees 4.68 One suggestion put to me is that JIO' s appreciation and fulfilment of its Defence customers' requirements for intelligence could be facilitated by JIO's representation on Defence committees which address issues to which JIO product is

relevant. Such committees would include the Force Structure Committee, the ADF Development Committee,

Operational Requirements Committee and others.

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the Defence

4.6':> It is not clear to me that there would be advantage in

separate JIO representation on such commit tees. JIO' s input to the consideration of relevant issues is made long before the committees address them directly and scope for an effective contribution

there appears to be litt le by JIO at the committee

stage. A more productive path would be for JIO to improve the quality of its direct liaison with Defence and other consumers and my recommendations in this chapter are directed to that objective.

Conclusions on JIO/Defence relations 4.70 The major issue influencing JIO's relations with consumers of its product within Defence is the balance in its activities between fulfilling the intelligence requirements of policy areas within the Defence Department and the intelligence requirements of the ADF. The gaps to which CDF, ACOPS and others have

referred in the provision of combat or operational intelligence to the ADF are not the result of any single factor. It would be inaccurate and unfair to attribute responsibility to JIO alone. The requirements of the ADF for information on how potential adversaries will wage war are dynamic and ongoing. Of their nature, they are very difficult to fulfil in their entirety, not least because of the lack of readily available sources of information in peacetime.

4.71 Moreover, in the past, the Services themselves have not given JIO as much specific guidance as they might have on the kind of combat intelligence they require. Service requirements are now being refined in the JIAC and through other means. This process needs to be developed much further before the

requirements of the Services in this area are realistically related to JIO's resourcea and capabilities.

4.72 It is not my task to prescribe the appropriate balance which JIO should achieve between its responsibilities for

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'strategic' and 'combat' intelligence. Such a matter should be decided, and regularly reviewed, by the Defence organisation. I believe, however, that there is considerable scope to improve the effectiveness of the review process and that, in doing so,

the often competing requirements made on JIO's limited resources by the Defence Department and the ADF could be reconciled more efficien tly. I also consider that a more stringent approach can be adopted in determining the countries on which it is necessary

for JIO to maintain detailed data bases and the order of battle of their defence forces.

RELATIONS WITH OTHER DEPARTMENTS AND AGENCIES

ONA

4.73 The senior managements of JIO and ONA have expressed

satisfaction with the existing state of the relationship between the two organisations. JIO submitted that:

some early problems of duplication of work between JIO and ONA do not arise much now and if they do, they are

quickly resolved.

JIO attributes this situation to its own re-definition of its role and procedures and to timely consul tat ion between the two organisations.

4.74 ONA generally agrees with this view of the relationship. Its submission refers to:

4.75

a steady improvement in the quality of relations between the two agencies as better understanding and acceptance of their respective roles has emerged, and habits of co-operation have developed.

that the relationship

which It does appear from has evolved between my inquiries

JIO and ONA is essentially a

co-operative one. I am aware of exceptions to this state of affairs, but I regard them as understandable given the overlap of interests and analytical capability between the two

87.

organisations. I am aware, for example, that some areas of JIO and ONA, which are concerned with common issues, tend to operate more independently of each other than they might. What has struck me about the resulting difficulties, however, is that they are now few compared with the position which apparently obtained in the early years of ONA.

4.76 There will always be scope for improving the qualit y of relations, and the general consultative arrangements and the attachment of military officers to ONA, suggested in Chapter 3, should contribute to this end. The current situation, however, reflects favourably on the senior managers of JIO and ONA wh o have made concerted and successful efforts to encourage bette r co-ordination and co-operation. Relations between analysts of the two organisations generally appear to be sensible and open.

4.77 ONA draws on a wide range of JIO's activities, both in its current intelligence and national assessment work. ONA consults JIO closely in producing particular assessments,∑ such as the Australian Security Outlook and the Global Military Balance. There is well-developed co-operation in the area of detailed

strategic/military related intelligence. Whenever an international crisis which requires the provision of timely intelligence to the Government is developing fast, ONA and JIO work together with Foreign Affairs in a National Intelligence Watch Office, the product of which is ultimately the

responsibility of the Director-General of ONA.

4 " 78 Relations between ONA and JIO are not completely free of

tension. Such tension as exists should be seen within the context of a working relationship that overall functions co-operatively. One source of some actual and further potential tension lies in ONA' s responsibility for current intelligence reporting, which was transferred to ONA from JIO following RCIS.

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A significant amount of current intelligence relates to, or is dependent upon, detailed military related intelligence. ONA currently has no expertise of its own in this area and relies on a flow of relevant information from JIO.

4.79 The Acting Director of JIO pointed out to me potential difficulties with this arrangement for current intelligence reporting, although he does not see them as a serious problem in practice. ONA can take military facts or analyses provided by JIO and, by placing them in a different context, alter the precision of the military language used. He also noted that

there was an added danger (to date only a theoretical one) that there currently exists no safeguard against an ONA current intelligence report making a mistaken interpretation of data related essentially to military intelligence.

4.80 I regard it as highly desirable that national reporting on current intelligence continue to be the responsibility of ONA. I believe, however, that the recommendations which I made in Chapter 3 concerning the production of intelligence reporting by ONA and the appointment of military officers to ONA

1

s analytic

staff will reduce the difficulties to which the Acting Director of JIO has referred. This is not to imply that ONA would not continue to rely on JIO for input to its current intelligence reporting and longer-term assessments.

4.81 Some tension has also been generated between ONA and JIO, more at the analyst than at the managerial level, over the scope of JI01 s strategic analyses. I discuss below what I consider to be the appropriate and most efficient allocation of analytic

effort between JIO and ONA in the area of strategic assessments (see 4.108-4.115).

4.82 As discussed in

co-ordinating JIO 1 s analytic 3.73 work

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3.74,

with that ground-rules for undertaken in ONA

have been settled between the two organisations. Some tensi on has arisen in isolated cases but I do not regard this as of any real significance. As I noted, on some occasions JIO could perhaps have pressed ONA at a more senior level to resolve the tensions that did arise.

Foreign Affairs 4.83 Relations between the Department of Foreign Affairs (DFA) and JIO are not as wide-ranging or intensive as the Department's relations with ONA. JIO and DFA, however, do provide each other with important services. JIO receives a significant proportion of reporting from diplomatic posts and frequently tasks these posts to provide specific information. In return, JIO provides Foreign Affairs officers with detailed information, particularly

in relation to foreign military developments.

4.84 In its submission, DFA commented that JIO provides the Department with 'a range of useful information and resources'. It also noted that JIO's less technical intelligence publications and reports are 'generally regarded as useful' by departmental officers, particularly in the area of arms control and disarmament.

4. 85 The DFA submission refers to two speci fie areas in which it has encountered some difficulty in dealings with JIO. The first concerns the scope of JIO's commentaries. DFA notes:

".. a tendency to limit these to a largely descriptive and detailed account of events, with less readiness to attempt an analysis of the motivations behind them or willingness to offer projections on their possible future course.

4.86 I am inclined to agree developments could be bolder conclusions in relation

that JIO' s reporting on military in offering comment or drawing out to military consequences of

international developments. Neither ONA nor Foreign Affairs has the expertise to analyse military activities in detail. I

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consider it important, however, that JIO continue to observe the demarcation of work responsibilities which it has developed with ONA over a number of years.

4.87 The second issue raised by DFA relates to JIO's tasking of overseas diplomatic posts. DFA notes that, on occasions, JIO has sought a many of

wide range of highly specific information, but that the

the

South

time-frame resources Pacific.

these in

requests which the

are unrealistic information is

available to posts, especially

in terms of

required and those in the

4.88 To the extent that JIO gains a better appreciation of the operating environment and limited resources of specific diplomatic posts, it should be able to formulate its tasking of them in a way which would make it more likely for Foreign

Affairs to respond effectively. The proposed National Intelligence Committee would be an appropriate forum to clarify the scope for tasking of diplomatic posts.

Other agencies DSD

4.89 JIO has close relations with DSD, which is a highly

important source of intelligence. DSD has a liaison office in the JIO building which as one of its tasks, maintains contact with JIO Branches to ensure that DSD is fully aware of JIO' s requirements.

4.90 DSD receives copies of all JIO publications. DSD management considers that its relations with JIO are close and effective, particularly with areas such as JIO's Scientific and Technical Intelligence Branch. It sees room for improvement in JIO's tasking of DSD. Such tasking tends to be either ad hoc and

urgent or very generalised. Whilst some unforeseen urgent tasking is unavoidable, DSD management considers that more

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effective internal vetting of the ad hoc tasking could be exercised within JIO and that JIO, like other DSD customers, could exercise greater selectivity in the material it requests.

4.91 DSD management also considers that there is scope for more interaction between JIO and DSD in JIO's analyses of

international developments. Among DSD officers, there is a body of expertise, often built up over mahy years, on particular issues. The extent of interaction between analysts in the two organisations on such issues is often minimal. Part of the difficulty is that DSD officers are usually unaware of issues which JIO is researching, largely because DSD does not receive a copy of JIO's annual 'Publications Programme'.

ASIS 4.92 JIO maintains effective working relations with ASIS and liaison has expanded at both a senior management and an analyst level in recent months. The need for further development of these contacts is accepted by management of the two

organisations. In his submission, the Acting Director-General of ASIS indicates that ASIS finds JIO 'helpful and responsive to requests for detailed and specific that ASIS desk officers find JIO

requirements'. He also notes to be 'more systematic than

other departments in providing formal tasking'.

ASIO

4.93 JIO has a limited relationship with ASIO. ASIO informs me that its relations with JIO are 'satisfactory'. ASIO is represented at the weekly JIO Director's briefing.

Immigration and Ethnic Affairs 4.94 JIO provides the Department of Immigration and Ethnic Affairs (DIEA) with an alerting service in relation to boat refugees and situations which might lead to a major refugee exodus, particularly in South East Asia. DIEA also claims an

92.

operational interest, shared with the Australian Federal Police and the Australian Customs Service, on intelligence related to law enforcement, particularly illegal entry.

4.95 In its submission, DIEA suggested that it had 'a growing need for access to better intelligence and intelligence assessments than are presently available'. (See also 3.66 - 3.70 on DIEA's relations with ONA). DIEA submitted that it had a

policy need to identify for itself what intelligence material and sources, relevant to its responsibilities, currently exist.

4.96 JIO provides DIEA with assessed information relating to suspected refugee vessels. Senior DIEA officers may arrange to have access to the intelligence on request. Where requested by DIEA to do so, JIO, in association with ONA, has provided oral

background briefings for DIEA officers on developments affecting refugee situations.

4. 97 My

concerns inquiries indicate that JIO has about the quality of the service responded to DIEA' s

it is receiving and

that JIO has undertaken appropriate measures to ensure that DIEA receives information relevant to its main operational interests in a timely manner.

4. 98 The issue of access to intelligence on refugee movements has been the subject of high-level correspondence or discussion on various occasions between the Department of Defence and DIEA. On each occasion, agreement has been reached in principle on a

working arrangement. Some DIEA officers have continued to remain dissatisfied with the practical outcome. Recent changes in some senior positions within DIEA may also have led to a lack of institutional. knowledge about the arrangements which do exist

with JIO.

93.

4.99 I consider that, in these circumstances, it may well be an opportune time for the senior managements of DIEA, Defence, ONA and perhaps Foreign Affairs to re-examine the issue of DIEA' s need for intelligence support both directly related to it s operational responsibilities and, more broadly, to policy developments within its portfolio. I have recommended that the Director-General of ONA co-ordinate this re-examination (3.176).

Economic departments 4.100 None of the economic departments has regular, direct and substantia l contact with JIO. Most receive some JIO reports but, in their submissions, they noted that such reports were relatively few in number and of only lirni ted relevance to the consideration of wider economic issues.

Others 4.101 JIO provides minor services to a range of other

customers. JIO provides the Protective Services Co-ordination Centre (PSCC) with material on terrorism, hijackers and foreign counter-terrorist forces, although the quantity of rna ter ial is very low. The PSCC subrni t ted that it had received only one document in the past two years from JIO relating to terrorism. Nevertheless, the PSCC maintains that its links with JIO, although utilised only infrequently, are 'potentially valuable'.

4.102 JIO also keeps the Australian Federal Police (AFP) up to date with information relating to illegal international arms deals and the drug trade by providing a facility for AFP officers to have access submitted that a possible arises from the allocation

to relevant intelligence. The area for future liaison with to the AFP of responsibility

AFP

JIO

for

coastal surveillance activity. The two organisations need to examine the scope for JIO assistance in this respect .

94.

4.103 JIO also provides a small amount of information to the Department of Science on space events and has a very limited involvement with the Department of Transport, which informed me that it receives periodically from JIO 'low grade papers

relating to shipping matters'.

ISSUES FOR THE FUTURE

Role in the Defence organisation 4.104 JIO's primary role must continue to be to serve the Defence organisation. There is, however, a need to overcome the lack of clear understanding which is apparent among some JIO

analysts about their day-to-day work priorities and about whose intelligence requirements JIO should primarily be serving (4.12 - 4.13). I believe that the lack of certainty I have discerned within JIO about its role would be alleviated by JIO's

involvement in regular, high-level meetings of intelligence collectors, assessors and consumers and by greater interaction between JIO and its Defence consumers. The establishment of a National Intelligence Commit tee, as recommended in Chapter 3, would facilitate these processes.

4.105 I have previously noted the involvement of and CDF in endorsing JIO's Priorities. I consider the Secretary that there is considerable scope for involving senior officers from JIO's main Defence consumers more extensively in the monitoring of how

those Priorities are reflected in JIO' s work activities. Such involvement would also enable JIO' s resources to be allocated among sometimes conflicting tasks in a way that is clearly

understood by all major consumers.

4.106 The concerns I have noted (4.19 - 4.23) about the current arrangements for determining 'JIO's Priorities' statement suggest the need for a high-level consultative committee of JIO's major Defence customers to fill the gap between JIO's

formulation of its priori ties and endorsement of them by the

95.

Secretary and CDF. Such a committee - I propose it to be call ed the Defence Intelligence Committee ( DIC) could review

regularly the practical effects of the Priorities statement; it could assist in formulating the detailed guidance that JIO needs on the extent of detailed data it should maintain; and it could encourage better understanding between the ADF and JIO' s other Defence customers of their respective intelligence requirements. I consider that quarterly meetings of such a committee would be

adequate for these purposes. It may be that it would be useful for the Minister for Defence's office to be represented at DIC meetings. ONA might be invited to send an observer to help keep it informed of the direction of JIO's work.

4.107 Both the Department Secretary and CDF have indicated that they see merit in a high-level consultative committee to provide guidance to the Director, JIO, in relation to Defence intelligence needs. CDF has raised the possibility that the committee might have a broader role extending beyond JIO's area of responsibility into all aspects of intelligence in Defence. While that is a question going beyond my terms of reference, I would see scope for a broader committee of the kind suggested to encompass the role that I envisage for DIC.

Role in strategic assessment 4.108 The statement of 'Intelligence Requirements of the Defence Organisation' gives JIO responsibility for meeting particular Defence needs for strategic assessment and the study of Australia's strategic environment. These assessments are usually issued as 'Defence Intelligence Estimates' Reports' and are largely the

Intelligence Estimates (IE) Branch. responsibility

or

of

'JIO JIO's

4.109 JIO differentiates its strategic analysis from that undertaken in ONA on the basis of IE's 'defence-related' perspective. JIO submitted that:

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If ONA was producing an assessment that met the Defence requirement, then JIO would make its contribution to that assessment. If there was a need for a more particular

estimate concentrating on Defence-related issues (for example, force structure development) JIO may produce such an estimate, consulting as necessary with ONA.

4.110 I am aware that, in establishing ONA, the then Government deliberately created areas of JIO. In some areas, this

overlapping responsibility with been overlap appears to have

productive, intelligence. as in the

have area of scientific and technical I some doubts, however, about the

desirability of both JIO and ONA undertaking broad strategic assessments on similar issues. The ground rules discussed in 3. 73 - 3. 77 and 4.82 for co-ordinating the strategic analytic work of the two organisations should minimize unnecessary

duplication in publications.

4.111 I believe it would be reasonable for Defence to look to ONA, to a greater extent than it does now, where it sees a need

for broadly based intelligence assessments of the general strategic and diplomatic intentions and policies of foreign countries, interrelationships within accept that JIO needs to maintain capacity.

regions, etc. a strategic I fully

assessment

4.112 I can understand some reluctance by Defence when ONA was newly established to rely on it as a major source of assessment on national strategic issues. Now that ONA has demonstrated its capabilities I should hope that Defence would be readier to task ONA directly in these matters.

4.113 Both the Secretary, Department of Defence, and CDF have indicated to me continuing concern at the idea of having to rely on ONA for strategic assessment. They stress the need for JIO to retain the in-house capabili ty for strategic assessment,

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particularly for a time of hostilities, rather than be dependent on ONA with its own priorities. The importance of monitoring the strategic environment to detect and assess changes of potential detriment to Australia 's security is also stressed. They point

to the need for military/defence expertise in preparing strategic assessments.

4.114 I do not question the argument put forward by Defence for JIO to retain a strategic assessment capability. It needs, in particular, Australia

capability, strategic

to be in a position to analyse the implications for of changes in another country's military policy or particularly in Australia's area of primary interest. JIO would use this capacity to fulfil Defence requirements and to make its essential contribution to national strategic assessments undertaken by ONA. But I still believe that for the more significant broader based assessments, Defence should be prepared to look to the national assessment body, and should continue to do so in time of hostilities. I note that ONA's role in developing 'the single most important compilation of intelligence provided to Defence by JIO and ONA'

(the Australian Security Outlook) is appreciated by Defence (3.33).

4.115 The proposed National Intelligence Committee should serve to bring the Defence Department more closely into the national assessment process. JIO will still retain an in-house capability and will continue to make an essential contribution to national assessments.

Economic product 4.116 There is a requirement for defence intelligence

assessments to take account of relevant economic factors and industrial capabilities in countries of strategic interest to Australia. JIO's EI Branch maintains a data base and analytical capacity for this purpose. The Branch makes a contribution to a variety of JIO publications.

98.

4.117 The evidence available to me suggests that EI Branch's own publications are often regarded by consumers as useful

background material only (but again I recall my comm ents in 3.37). I have noted that over recent years consumers have rarely tasked the Branch on specific issues (4.47). This lack of tasking meeting

defence

may imply that EI 's

needs. It reporting is already adequately ma y also imply that specific consumers'

requirements in this area are limit ed or that

understanding within the Defence organisa tion o f JIO's capabilities in the field of economic intelligence is deficient.

4.118 The recently-appoint ed Director o f EI Branch has been examining the organisation of direction of

its resources. EI's analytic efforts and th e This process necessaril y involves

assessing Defence suggested announced

past practices in the light of new dem and s . The Industry and Materiel defence that the new

in June 1984 may

(DIMP) D ivision has Polic y

policy for Australian industry create a need for more

defence-related economic intelligence on countries o f primary strategic interest to Australia, particularly their defence-related industrial capacity.

4.119 From an examination of the work undertaken within EI Branch, it would seem that its data bank ma intenance, research and reporting activities would be more productive and useful if they were concentrated more narrowly . A t p resent, the Branch

attempts to cover in varying detail a wide range o f econom ic issues and developments in a wide range o f countries. In my view, this coverage suffers from a lack o f specific directi on from consumers. There would appear to be considerable scope for

the Defence organisation to gain a better understanding of JIO's capability and limitations in the field of econom ic intelligenc e and to refine its requirements more precisely.

99.

4.120 I question whether the resources allocated by JIO to the economic area are being efficiently utilised. I believe that an early priority of the proposed Defence Intelligence Committee should be to consider specific requirements for defence-relate d economic studies.

Geography and social research 4.121 I have emphasised throughout this chapter the need for JIO's reporti ng to serve the specific requirements of consumers within Defence and elsewhere, as appropriate. I have identified the need for better consultative arrangements between JIO and

its Defence customers to achieve that objective. I indicate d (4.22) a need for more specific Defence guidance to JIO on the extent to which it needs to maintain detailed data, potentiall y relevant to military operations, on particular countries. This need applies to the maintenance of data on geography,

infrastructur e and social organisation and again the Defence Intelligenc e Committee will have a role to play in determining requirements.

4.122 I appreciate that it may be important for Defence to have access to detailed information on a country's history, institutions, customs, culture, social divisions, infrastructure and other aspects if the ADF is likely to be involved there, either on active operations or in a peace-keeping role. I also accept that some of this information may need to be built up over time.

4.123 Nevertheless, I question whether there are more than a very few countries on which it is necessary to maintain information of this kind on a contingency basis. At present, the three sectio ns within the Military Geography and Social Research

(GS) Branch (Military Geography and Infrastructure, Social

Research and Transport Studies) maintain data on a wide range of

100.

countries. I believe that more could be achieved if the focus of the work was more concentrated and that there is scope for the Defence organ1' sat1' on, through DIC t f ∑ ∑ d b ∑ , o re 1ne cons1 era ly 1ts requirements.

4.124 In practice, the Special Research Section (GSSR) is often tasked to provide briefings for JIO officers and Defence (as well as Ministers) on current events or developments in particular foreign countries, and also broad background briefing prior to visits to or from such countries. The interest of these

consumers in 1 current political issues 1 is understandable . The question is whether JIO needs to maintain an in-house capability to meet all of these requirements or whether it should look elsewhere, including to ONA and the Department of Foreign Affairs as contemplated in the Directive.

4.125 It is not surprising that there appears to be some uncertainty among analysts in GSSR about the proper focus of their work. This is reflected in the very limited number of GSSR publications over recent years. In 1982-83 and 1983-84, for example, GSSR contributed material to the updating of various Military Studies and other JIO reporting, but issued no

publications of its own. GSSR completed some major research papers which were not published by JIO.

4.126 One of the reasons for this lack of published product appears to be that GSSR 1 s work lies on the dividing line between the responsibilities of JIO and ONA and that, on occasions, GSSR 1 s product may address issues in a way which ONA considers

to be properly its responsibility. (The Acting Director, JIO, has advised me that, following resolution of demarcation sensitivities, several of the studies have since been published).

4.127 In my view, a significan t amount of the analytic work undertaken by GSSR either duplicates work being carried out by

101.

ONA and Foreign Affairs or is of a kind that those agencies

should be able to undertake at relatively short notice on request. It would seem more sensible .for JIO and Defence to request briefing from those agencies as the need arises in relation to particular internal social or political situati ons in foreign countries, which are not interest to the Defence organisation,

otherwise of particul a r rather than for JIO to

retain a separate capacity for that purpose.

4.128 In respect of countries where the Australian ADF is stationed, or where there is a likelihood that it might be involved, either operationally or in a peace-keeping role, there may well be a need for relevant background on social and

cultural issues and on internal security. In my view, however, there is scope for the ADF, in Australia's existing strategic situation, to refine considerably the countries in respect of which it needs to maintain such intelligence. If an occasion arises where Australia is to participate in a peace-keeping or similar exercise outside our usual area of interest, I should think that other participants or allies of Australia would assist with the provision of necessary data.

4.129 CDF, whilst accepting that there is scope for more specific guidance to JIO in relation to GS Branch activities, suggests that care needs to be taken lest too great a reduction leads to a potential lack of basic data for operations. The

Secretary points Defence has a

out

need

Department analysis, background social and

that, to support its strategic to consider the bearing of factors on the creation, cultural

sustaining or expanding of military forces. My questions go to the extent of detail it is necessary to address in relation to particular countries (accepting that there will be a need for Defence to have considerable detail in relation to some countries) and to the extent to which Defence must collect and

102.

analyse such intelligence itself, in order to meet general briefing requirements, rather than seek assistance from ONA or Foreign Affairs.

4.130 The starting point would seem to be for Defence to

determine what intelligence it really needs and the extent to which it is prepared to allocate resources as against its other priorit ies. This would be an appropriate task for DIC to participate in. Given that ONA and Foreign Affairs also share an

interest in this intelligence, there would be advantage in the proposed National Intelligence Committee requirements of different consumers (not examining the

least including

Ministers) and how they can be most efficiently met.

RECOMMENDATIONS AND CONCLUSIONS

4.131 I recommend that:

(a) a Defence

established, Intelligence Committee with membership to include (DIC) should

Director JIO be

and

appropriate senior officers from major Defence consumers of JIO product, both policy areas and the ADF. Director-General ONA should be invited to send an observer. (Possible

expansion of the composition and role of the DIC to cover all aspects of Defence intelligence is a matter for the Defence Department).

(b) The DIC should meet quarterly. Its powers should be advisory only but, where there is substantial dispute within it as to whether JIO is properly implementing its Priorities document, the Director JIO should give serious consideration

to amending the document or referring the matter for resolution at Secretary /CDF level.

(c) The Committee's responsibilitie s should include

103.

( i )

( i i)

(iii)

(iv)

review of JIO's

Priorities prior to Secretary and CDF;

monitoring of the

statement it being

practical

of Intelligen ce submitted to the

effect of JIO's

Intelligence Priorities on its allocation of resources, on its 'Publication Programme' and on the effectiveness implementing the customers;

and efficiency with which requirements of its it is major

assisting in formulation of detailed guidance to JIO on the extent to which data bases should be maintained;

encouragement of exchanges of view between the ADF and other Defence consumers of JIO to determine the extent of their common intelligence requirements and to enable better co-ordination of their separate intelligence needs; and

(v) review of the format and style in which JIO

presents its published reports.

(d) JIAC should function as a sub-committee of the DIC to enable the ADF to co-ordinate its intelligence requirements.

4.132 I suggest that in Australia's present strategic circumstances there is scope for the Defence organisation to provide more specific guidance to JIO in identifying those countries in which the ADF might forseeably be required to operate.

104.

4.133 I suggest that DIC should give early attention to developing more specific and realistic guidance to JIO on the Defence organisation's requirements for intelligence, including priorities for particular countries and covering intelligence on:

order of battle, tactics and doctrine; geography and infrastructure; social background; and economics.

4.134 I suggest that the question of how Defence's requirements for general briefing on social/political issues in foreign countries can best be met might be discussed in the proposed National Intelligence Committee.

4.135 I support the action being taken to strengthen the capabilities of the Imagery and Graphics Section.

4.136 I recommend that:

(a) JIO should maintain a capacity for strategic analysis;

(b) JIO should focus mainly on the the

Australia of changes in another country's capability, particularly in Australia's strategic interest;

implications for military policy or area of primary

(c) Defence should resort more readily to ONA where it sees a need for intelligence assessments of general international

strategic issues or of the political intentions of foreign countries.

4.137 I suggest that JIO keep DSD advised of program and encourage analysts to consult counterparts.

105.

and diplomatic

its publications with their DSD

4.138 I suggest that JIO's annual 'Publications Programme' should set more realistic targets, having regard to available resources and JIO' s other tasks, perhaps linked to a rolling ongoing program. JIO management should be guided in this process by the views of DIC.

4 .139 I recommend that

(a) JIO should continue to address itself to the planning requirements necessary to enable it to operate efficiently during a national crisis or war (arrangements for increas~d staff, 24-hour operations, more extensive communications, upgraded service to customers, etc.);

(b) JIO should clarify, in close consultation with other elements of the Defence organisation, the role it would 'play if the ADF were deployed on active

particular, some clearer definition needs relation to the roles in an emergency Directorate of Intelligence within JMOP with operational intelligence;

operations. In to be agreed in

of JIO and the

in providing CDF

(c) JIO should be involved more actively in the planning, conduct and review of major ADF exercises.

106.

CHAPTER 5

ONA'S CO-ORDINATION ROLE

Overview of co-ordination role 5.1 In addition to its

reporting and assessment, responsibility ONA has a

for intelligence responsibility for

co-ordination of the activities connected with international

intelligence agencies. that are carried out by Australian Government

5.2 In its early years, ONA, for reasons which are

understandable, function. Less concentrated on establishing to have been

its assessment

effort appears put into its

co-ordination role in that time. A contributing factor was the difficulty which ONA encountered in reaching agreement with the Public Service Board on its staffing needs for the co-ordination function.

5.3 The current Director-General has accepted the Public Service Board view that intelligence co-ordination needs to be carried out by officers in ONA who are also responsible for assessment. A small increase in analytical staff has been provided to facilitate this. The Director-General has expressed

the view that an extended role would require additional staff resources and this may well be the case.

5.4 In its early years, ONA's main contribution to

co-ordination, apart from its regular contact with individual agencies, was inclusion of an overview section in its annual report and initiation of informal monthly meetings of the heads of the intelligence and security agencies (known as HIAM - Head s of Intelligence Agencies Meeting). The Director-General also participated as a member of the Secretaries Committee on

107.

Intelligence and Security (SCIS), including in the Committee's oversight of the intelligence community budget.

5.5 ONA has since taken additional steps to strengthen its co-ordination role. It has developed, and obtained Government endorsement of, National Assessment Priori ties. It established and chairs the National Intelligence Collection Requirements Committee (NICRC). It also undertook specific reviews of DSD and ASIS in 1982.

RCIS Report and response

5.6 In RCIS I concluded that:

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 goverment they should serve (3-316).

5.7 I also noted that: The most important reform needed in Australia is for machinery to be created to enable the Australian Government, at the highest level, to establish clear priorities for

intelligence collection and its subsequent evaluation and use (3-257).

5.8 I indicated control and co-ordination were lacking in relation to the setting of targets and priorities, the allocation of collection responsibilities, including liaison with overseas agencies, budget allocations and jurisdiction. My concern was to ensure adequate guidance for both collecting and assessing agencies so that policy-makers would get the intelligence they need.

5 " 9 The recommendations which I made to overcome the lack of

control and co-ordination included the establishment of Ministerial and Department Secretaries Committees. In support of such a structure, I proposed a key role for the new national

108.

assessments agency ( ONA), additional to its assessment role. I refer to this higher level oversight machinery in my General Report. In this chapter, I examine the particular co-ordination responsibilities of ONA.

5.10 I envisaged in RCIS that:

5 .11

the head of the new agency will, in a very real sense,

assume responsibilities for the leadership and co-ordination of the Australian intelligence community as a whole. He will combine these duties with the tasks appropriate to the head of the new agency (3-304).

In a passage quoted above (2.11), I foreshadowed the need for the new intelligence co-ordinators to devote more time and attention to liaison with the rest of the government ... and to draw them into the processes Co-ordination needs to

extend not only inwards to the collectors and assessors, but also outwards to the consumers.

5.12 The Government of the day largely accepted my proposals for control and co-ordination of the intelligence community, including the Ministerial and Secretaries committees and a role for ONA in co-ordination. The main exceptions of relevance were that the Director-General ONA, although a member of SCIS, was not designated Deputy Chairman, and ONA's responsibilities were

limited to international intelligence, although the Director-General was to co-operate with the Director-General of Security to obtain co-ordinated effort in security matters having both internal and external dimensions.

5.13 The Secretaries' Report on RCIS, which was accepted by the Government, included among ONA's proposed functions:

to monitor international developments of national importance and the adequacy of departmental surveillance and assessment thereof (including surveillance by departmentally subordinate agencies);

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to bring inadequacies to the notice of relevant departments and agencies, and to make suggestions to them for improved coverage, or for improved co-ordination of the national external intelligence effort, including targets and priorities and the allocation of resources; and

to report annually, o r as otherwise appropriate, on the activities of the Office (including its relati ons with departments and other agencies), and on the achievement of the national external intelligence community as a wh ole ; and

to make suggestions for improvement in effectiveness .

The legislative mandate 5.14 Section 5 ( 1) (d) of the ONA Act expresses ONA' s

co-ordinating function as follows:

to keep under review the activities connected with international intelligence that are engaged in by Australia and to bring to the notice of relevant Departments and Commonwealth authorities any inadequacies in the nature, the extent, or the arrangements for co-ordination, of those activities that become apparent from time to time and suggest any improvements that should be made to remedy those

inadequacies.

5 .15 Neither the Act nor the then Government's response to RCIS

provided ONA with detailed direction on its co-ordination function; nor did either provide any machinery specific to this purpose. The Assessment Boards' functions were stated to be 'to consider assessments'. In practice, ONA has used the Board meetings to some extent also to canvass what assessments it might undertake and to inform departments of some of the work being undertaken to establish collection priorities. In general, however, ONA's co-ordination role has been pursued through mechanisms other than the Assessment Boards.

5.16 ONA's submission indicates that 'Section 5(l)(d) of ONA 's Act gives it a measure of responsibility for intelligence co-ordination but limited authority'; and, in a separate paper on co-ordination, prepared for SCIS in February 1984, the Director-General ONA noted ' ... a set of broadly worded duties -and no explicit rights.'

110.

5.17 The nature

clearly stated. of

In

the responsibility could have view of the sensi ti vi ties been more

involved,

particula rly with departments which had long had their own intelligence responsibilities, the Government may have chosen to state the role somewhat indirectly and to leave it to be worked out through experience. I believe it is still evolving.

5.18 The Director-General of ONA has indicated to me that he does not see a need for statutory amendment to give ONA greater authority and that he prefers to rely on obtaining willing co-operation through persuasion. I agree that effective co-ordination is not something that can be

legislative fiat. A lot will depend on the achieved simply by credibility of ONA

within the intelligence community, and on the personal stature

and authority of the Director-General.

5.19 The establishment of the National Intelligence Committee (NIC), which I have recommended in 3.169, should facilitate ONA 's co-ordination role by providing a vehicle for regular

consultation among intelligence agencies and relevant departments. Amendment of the ONA Act to provide for or take account of the NIC would provide an opportunity to look at the possibility of 1∑e-stating ONA's co-ordination functi on in

s.5(l)(d). I am not, however, proposing any change in that sub-section.

ONA's co-ordination activities

5.20 The Director-General of ONA contributes to intelligence co-ordination as a member of scis. He also participates in the monthly Heads of Intelligence Agencies meetings (HIAM). The establishment of HIAM was an initiati ve of the first

Director-General of ONA and the chairmanship of HIAM rotates th b I note that a Deputy Secretary from the among e mern ers. Department of Foreign Affairs also participates apparently because of that Department's involvement

intelligence collection and assessment process.

111.

in HIAM ,

in the

5.21 ONA submits that:

the value of HIAM resides

non-executive character. Removal detract from the value of HIAM.

in

of

its

those independence and attributes would

I understand this to be a reference to HIAM's infor mal

procedures committees, and its independence from other co-ordinati on such as SCIS. HIAM provides an opportunity for

informal discussion of matters of common interest, and I can see value in that. I note though that some of the matters discussed at HIAM (e.g. freedom of information legislation , securit y of intelligence material) require interacti on clearances, leaks with other government agencies and might be addressed more productively, short of any consideration at SCIS or Ministerial committee level, in a body like the proposed NIC. That is not to

say that the agency heads might not continue to meet together for informal discussions from time to time so long as they find value in this.

5.22 ONA noted in its submission that it 'pursues its

intelligence co-ordination responsibilities in several ways'. Chief among them are said to be:

ONA's annual report on the activities of the Office, including its relations with other departments and agencies; external liaison; review of the annual reports of the other external intelligence agencies; and recommendations for improvement;

studies of intelligence performance and arrangements, and recommendations for improvement, such as the ONA Study of ASIS .. " , and that on ... DSD;

drafting of the annual National Assessment Priorities for consideration by [SCIS] and Cabinet;

chairing and directing the work of the National

Intelligence Collection Requirements Committee; the co-ordination of current intelligence and assessment work programs with JIO.

112.

5.23 Effective co-ordination by ONA is very demanding on it s limited staff resources and requires regular , and sometimes detailed, involvement in the activities o f the other agencies. ONA refers to the 'continuing and constant e ffort by its top

ma nagement directed to the sympathetic understanding and

constructive engagement of the intelligen ce agencies'.

Na tional assessment priorities

5.24 In the first ONA Annual Report in 1978,

Director-General noted that significant problems the then

still

remain in intelligence collection and assessment. ' He

foreshadowed the need to ensure that the external

intelligence effort both in collect ion and assessment is

channelled into the right priority areas.' The 1979 Report noted that ONA was putting before SCIS ' ... a preliminary ONA paper on national intelligence priorities ', and was proposing to present

such a document annually for endorsement. The 1980 Report

indicated that SCIS would have before it the 'National

Assessments Priorities '; the 1981 Report advised that this paper had been 'approved with minor amendment ' by the Government.

5.25 Subsequently, the National Assessment Priorities (NAP) have been reviewed quarterly by HIAM and annuall y by SCIS. HIAM 's review does not seem to sit well with its 'non-executive'

character. It would be more appropriate for the proposed NIC to assume this review function and for SCIS to retain its annual

oversight.

5.26 The intention that the NAP be reviewed annually by the Government has not been achieved but such a review was conducted by the present Government when it assumed office in 1983, and action is now in hand to bring a revised paper before SCIS with

a view to submitting it to Ministers. A wide range of

departments, including the economic consulted in this latest revision.

113.

departments, have been

5.27 The view of the current Director-General of ONA is that, given the sufficient in-built flexibility to cope with emergency situations which arise, biennial review by the Government is adequate. I agree to the possible government.

that biennial review should need for earlier review suffice, subject on a change of

National intelligence collection requirements committee 5.28 The NAP provide broad guidance on assessment interests but do not specify a detailed and precise outline of activities for the intelligence collection agencies to pursue. This lack of detail has special implications for the collectors of secret

intelligence.

5.29 In 1983, ONA established the National Intelligence Collection Requirements Committee (NICRC}. ONA notes in its submission that, in doing so, it aimed to create a body that:

brings together the intelligence community with the aim of defining key intelligence questions; elaborating national intelligence collection requirements and priorities; assessing intelligence collection targetting; and, on this basis, allocating effort appropriately. Annual reports

5.30 The seven ONA annual reports issued to date have been in two parts, with Part A reporting on ONA Operations and Part B being a 'Review of Foreign Intelligence Effort'. In Part B, readers are given an account of ONA's co-ordination activities and a brief overview of the performance of, and the key issues confronting, the external intelligence community and particular agencies. The reports include a convenient summary.

5.31 ONA' s annual report is addressed primarily to the Prime Minister; copies also go to members of SCIS. A practice has developed whereby ONA has subsequently prepared, on behalf of SCIS and subject to its endorsement, a short report to Ministers

114.

g iving an overview of intell igence commun ity acti vities. This

report includes budgeta ry in formation; it also has a section on

ASIO prepared in consult ati o n with the Director-General o f

Securit y . The report has no t been submitted to Minister s in the

past two years due to timing difficulties. Th e preparat ion was advanced this year with a view to it being available in good

ti me , but fo r various reasons it has yet to reach M inisters .

5 .32 I belie ve it is import ant that Mi n ister s on the National

and International Securit y Committee sho uld re ce ive an annual report providing an overview, in co ncise terms, of the

activities o f the intellig ence comm unit y , its performance and key issues c onfronting it.

Special studies 5.33 ONA has to date undertaken for SCIS two

of intelligence performance and arrangements, in-depth studies those of ASIS and

DSD mentioned above ( 5. 2 2) . Stud ies of that kind can serve a

useful purpose. ONA of course needs to be conscious o f

sensi ti vi ties in undertaki ng any inquir y tha t impinges on the management of another agency. To som e extent N ICRC activiti es may meet the needs of identif y ing deficiencies in intell igence

collection.

5.34 Other assessments by ONA of issues affectin g the

performance of the Australian intelligence commun ity ma y be desirable. I canvass in Ch apters 6 and 7 the need fo r a review of the training requirements of intellig ence analysts . It would be appropriate for ONA to take the lead in this.

Views of departments and agencie s 5.35 Consumers of intellig ence data and assessments tend no t to be affected directl y by the co-ordinat ion efforts of ONA, as ONA concentrates those efforts wit h in the intelligence commu n ity.

115.

ONA's efforts may well, of course, have bearing on the quality

of the intelli gence consumers receive.

5.36 The Department of the Prime Minister and Cabinet suggests that National Assessment Priori ties 'must maintain a long-term continuity of approach to national security priorities, while taking account of the policy perceptions of the government of the day' about the role which Australia should play in the world and in its region. In this context, the Department believes that

'ONA assessment priori ties are reasonably well attuned to the

policy requirements of the government, but there is some room for adjustment'.

5.37 The Department of Foreign Affairs refers in its submission to the importance of the ONA task of monitoring, improvements to, the activities of the other and suggesting

members of the

intelligence community. With regard to NICRC, DFA notes that 'ONA has made some effort since its establishment to institute

more ordered arrangements for review and co-ordination within the intelligence community most recently with the

establishment of the NICRC- but more needs to be done .. " '

5. 38 The previous Director of JIO in a submission noted that HIAM 'is a useful forum for keeping each other informed and

effecting any necessary co-ordination between members and their agencies'.

5. 39 As Acting Director-General of ASIS, he also commented on ONA's co-ordination role in positive terms. He noted that:

the Director-General of ONA consults the agencies on papers he prepares for SCIS and briefs the heads of other agencies on SCIS deliberations;

116.

HIAM is 'a very useful forum'

to be better informed of allowing 'all heads of

agencies each other's affairs and

therefore more responsive to demands on the intelligence community';

ONA's chairmanship of NICRC 'is a positive

reflection of its co-ordinating role which and ongoing will bring

helpful direction to the intelligence collectors'.

5.40 The Acting Director-General of ASIS also referred to his own moves to arrange planning meetings between himself, the

Director-General of ONA and a Deputy Secretary from Foreign Affairs (with the Director JIO to be included at a later date) 'to ensure that the direction of ASIS' work is towards areas and targets agreed, and preferably initiated by, the senior

customers'. The Director-General ONA regards such discussions with individual collection agencies, aimed at trying to match detailed priorities with operational methods and resources, as a corollary to the NICRC process.

5.41 The Director DSD has indicated that he values the support provided by ONA in its co-ordination role. He appreciates the opportunity for assessing with ONA the relevance of DSD' s work to the intelligence community and

confronts. He believes, however, ONA' s views on particular issues

some of the difficulties it that there may be scope for

affecting the community, e.g.

budgetary issues, to have greater influence.

5.42 The Director-General of Security in his submission made mention of the useful co-ordination between the agencies achieved through HIAM.

Future requirements 5.43 The task of co-ordination is difficult to define in precise terms. Lack of co-ordination is often used as an excuse for a range of other inadequacies. The ONA submission notes that:

117.

Co-ordination of the Australian intelligence community has come a long way under the arrangements devised in the wake of the RCIS. But there are some signs of blind attachment to an uncritical or mechanistic view of co-ordination - as if more would automatically be better, which is not the case.

5.44 The Director-General of ONA has noted the large investment of time, energy and resources which is required if ONA is to co-ordinate effectively and, in particular, if NICRC is to do its job properly. Moreover, there are some analysts, within ONA and other intelligence agencies, as well as some consumers, wh o question the value of the NICRC exercise in terms of the

continuing generality of its deliberations and who consider that it may be possible to streamline the process of determining intelligence collection requirements and needs.

5.45 the

In my view, ONA's co-ordination role would be enhanced if economic departments (particularly Trade, Treasury and possibly Resources and Energy) and the Department of the Prime Minister and Cabinet were more closely involved in the NAP and NICRC exercises. Trade and Treasury Departments are both consumers and collectors of intelligence and should be able to make a useful contribution. I also have in mind the view

expressed in Chapter 3 that the economic departments should be drawn into the intelligence process more actively if the Government is to gain fuller value from economic intelligence.

5.46 The Act (s.5(l)(d)) relates the ONA co-ordination function to 'the activities connected with international intelligence that are engaged in by Australia'. As noted in 5.11,

co-ordination needs to extend outwards to the consumers as well as inwards to the collectors and assessors. I accept that co-ordination should not be seen as an end in itself, and that considerable progress has been made; efforts. Nevertheless, I believe

118.

and I support the evolving that the proposed National

Intelligence Committee will provide a mechanism to facilitate useful co-ordination of the intelligence community, including the consumer departments.

RECOMMENDATIONS

5.47 I recommend that:

(a) the Director -General, ONA, use the proposed National Intelligence Committee as a forum for working level

discussion of issues affecting the intelligence community, and generally as a fulcrum for co-ordination of Australia's international intelligence activities;

(b) heads of the intelligence and security agencies be free to continue their informal (HIAM) meetings if they see value in doing so;

(c) the NAP continue to be updated regularly:

(i) quarterly reviews should be carried out in NIC; (ii) SCIS should review them annually; (iii) they should be submitted for endorsement by the Government at least biennially or sooner on a

change of government;

(d) NICRC, re-constituted as a sub-group of NIC, should continue with its ongoing tasks, reporting as necessary to NIC:

( i) the economic departments should be included, with

representatives from Trade and Treasury as members, as well perhaps as others, such as Resources and Energy; ( i i) the Department of the Prime Minister and Cabinet

should also be represented;

119.

(e) ONA consider the need for more regular in-depth studies of relevant issues:

(i) this consideration should be made in the context of NICRC efforts, and having regard to the manageme nt

responsibilities of other agencies; ( i i) a study should be undertaken of how the traini ng

needs of intelligence analysts might best be met;

(f) ONA's practice of reviewing the achievements of the national external intelligence community as a whole in its Annua l Report should be continued; and efforts should be made to ensure that NISC Ministers receive annually a summary of intelligence community performance and issues affecting it.

120.

CHAPTER 6

ONA PERSONNEL AND ADMINISTRATIVE ISSUES

6.1 After the introduction, in which it is stated that ONA appears to be well run and that the effectiveness with which it carries out its functions reflects well on management, the chapter considers five main topics

The Structure of ONA Staffing matters External contacts Security Location of ONA.

STRUCTURE

6.2 The two principal matters dealt with are the organisation of ONA and the classification of senior management. On the first matter, the report finds that there is no apparent need for fundamental changes though it is suggested that ONA 1 s structure be kept under review to see how well it is serving consumers 1 needs. On the second matter, the report notes ONA 1 s growing responsibilities and the desirability of equating ONA with the policy departments with which it works closely, and suggests

that the Public Service Board give sympathetic consideration to the reclassification of ONA 1 s senior management structure.

STAFFING

6.3 Matters examined are staff numbers, recruitment polic y , staff turnover, and training.

6 .4 A need is seen for some increase in ONA1 s average staffing

level of 74 fulltime staff but it is recommended that ONA remain a small, lean organisation.

121.

6 .5 ONA 's recruitment policies and experience are examined . No

particular changes are suggested, though the need is reaffi rmed for ONA to have seconded ADF officers on its analytic staff.

6.6 ONA 's staff turnover experience is examined, as is ONA 's general attitude in favour of the turnover of analysts after three to five years in one position. The advantages and disadvantages of that are canvassed. Management's general att itude is endorsed though with the rider that allowance should be made for exceptions in special circumstances. Attention is

d rawn to the possibility of using section 17 of the Public

Service Reform Act to retain the high quality of analysts in areas where continuity is called for or where appropriate expertise is rare; it is suggested that discussions be held with

the Public Service Board and policy departments on means of

ma intaining or enhancing the career prospects of analysts.

6.7 The report notes differing views on whether there is a need for ONA analysts to be given formal training in intelligenc e assessment, but concludes that there would be advantages in having a speci fie introductory training course in the art of

intelligence analysis. It is suggested that there could be benefits in any such training course being organised on an intelligence community basis rather than by individual agencies; and it is suggested that it would be appropriate for ONA, in consultation with other agencies and the Public Service Board, to take the lead in examining appropriate arrangements.

EXTERNAL CONTACTS

6.8 The advantages

particularly academics, of contacts with outside and the contribution they specialists,

make to ON A

reporting, are examined, as are ONA's management guidelines and its practice. The guidelines are regarded as generally appropriate but ONA is encouraged to look to see whether it is possible to do even more in these important areas.

122.

6.9 The advantages and disadvantages of publicity for some of ONA' s reporting are canvassed. The conclusion is reached that

there is only limited scope for public release of ONA reporting but the possibility should be kept in mind.

6 .10 After examination of the issues involved, it is concluded

that, on balance, it would not be advantageous for ONA or its analysts to give evidence to Parliamentary committees enquiring into international issues or aspects of Australia's foreign policy. It is noted that the government's practice has been to

refer requests for such evidence to the appropriate policy department with the expectation that that department would consult with ONA as necessary. No change to this practice is suggested except that when ONA possesses precise factual

information which could be useful to a Parliamentary committee, that information should be provided to the appropriate policy department which could then present it to the committee.

6.11 The guidelines concerning the publication of material by ONA analysts are examined, as is the current interpretation of

them. The guidelines are regarded as providing sensible and flexible rules which should make more than occasional cases worthy of consideration.

SECURITY

6.12 ONA' s security measures are found to have been developed in close consul tat ion with relevant authorities and to reflect the close and continuous attention given to security matters by ONA's management and staff.

6.13 Reference is made to an incident in 1980 when ONA's

security arrangements became the focus of public controversy when a sensitive document in its custody could not be located

f b h Of Security in ONA were and various allegations o reac es

123.

canvassed in the media. The then Director-General of Security, Mr Justice Woodward, investigated the loss of the document and

reviewed ONA's general security procedures. Following the report by the Director-General of Security, assertions were made in the media that he had been pressed to change some of the ASIO

findings about ONA security practices and to "water down" the strength of his conclusions.

6.14 These issues were again raised during the enquiry by a former ONA officer who appears to have been a main source of the earlier allegations of security breaches in ONA. The Commissioner found that there was nothing in the evidence presented to him which appeared to differ significantly from that before Mr Justice Woodward; and the Commissioner did not see any justification or need for further enquiry. On one particular matter, the Commissioner found, as had Mr Justice Woodward, that the missing document had been put into a

classified waste container and had been destroyed by the officer whose duty it was to dispose of unwanted papers. On another particular matter, the charge of a "whitewash" in Mr Justice Woodward's report, the Commissioner after examining the relevant

files found nothing to lead him to have any different reaction to that of the then Prime Minister (and the then Leader of the Opposition) in accepting absolutely Mr Justice Woodward's rejection of the claims that he watered down his report.

LOCATION OF ONA

6.15 The advantages and disadvantages are examined of

re-locating ONA, at present virtually alongside JIO, to premises closer to major consumers of ONA product in policy departments. Finding a new location for ONA is not considered an urgent priority but it is suggested that there could be merit in ONA's eventually acquiring its own premises separate from those of any agency or department or, alternatively, within any new building acquired by the Department of the Prime Minister and Cabinet.

124.

CHAPTER 7

JIO PERSONNEL AND ADMINISTRATIVE ISSUES

7.1 The general assessment is made that JIO is competently managed. The Chapter addresses a number of particular personnel and administrative issues which were brought to at tent ion, in some cases by members of JIO's staff. It is recognized that this

approach tends to point up areas in which there may be problems. In respect of several matters, it is noted that JIO has already recognized the problem and taken action towards a solution.

ORGANIZATION OF RESOURCES

7.2 The structure of JIO management and organization is examined and a number of submissions which proposed alternative arrangements are reviewed. There were several submissions that JIO's structure would be better organized on a geographic rather

than the present primarily functional basis. Contrary views were also put. It is acknowledged that the selection of the most efficient structure for JIO is properly a matter for JIO itself, after appropriate consultation, but suggested that JIO may need, on occasion, to experiment with changed structural arrangements

in particular areas to assess their practical advantages. On the whole, the present structure appears to work adequately.

7. 3 Attention is given to suggestions that coordination and liaison in JIO could be improved to better address problems in workloads and conflicting priorities. Some alternatives are considered and it is noted that JIO management does not favour the creation of a new branch for this purpose.

7.4 A general organization and classification review of JIO is seen as an appropriate follow-on from the Report's

125.

recommendations. Undertaken by JIO in consultation with Defence Central and the Public Service Board as appropriate, it would need to review the staffing and organization required most effectively to meet the demands of its consumers. Several suggestions are made for detailed organization of analytical branches. Also relevant are questions regarding the division of responsibilities between the Deputy Directors and the Branch Heads and the classifications appropriate for JIO senior management positions.

7.5 It is recalled that in RCIS the view was expressed that the classifications of the heads of the intelligence agencies, including JIO, were too low. The status of the position of Director JIO appears to have fallen in recent years in relationship to other Senior Executive Service positions in Defence. In view of the Director's managerial responsibilities and the nature of his reporting responsibilities to Minister, Secretary and CDF, it is recommended that the case for upgrading the position should be examined. It is also suggested that the Minister be consulted on appointments to the position.

STAFFING

7.6 It would be advantageous in terms of encouraging both specialist expertise and some continuity of staffing if there were a mix of civilian and military personnel in more of JIO's branches. JIO faces a number of staffing problems, including the disruption caused by postings of Service personnel and long recruitment delays for civilian staff and poor career mobility. JIO management has taken a number of positive steps in these areas. It is important that JIO continues in its efforts to

increase staff mobility and diversity of experience, and gives special consideration to career development prospects, particularly for some specialist analysts. Sympathetic consideration by Defence and, as necessary, the Public Service Board is urged.

126.

DEFENCE ATTACHES

7 ∑ 7 Consideration is given to the reporting and other dema nd s

placed upon Australia's Defence Attaches. It is recommen ded that th e Defence Department and Services should review the processes

for selecting, training, directing and assess ing the work of Defence Attaches.

INTELLIGENCE TRAINING

7. 8 There is an important place for forma l training in the

noted that only p rinciples of inte lligence assessment and it is some analysts receive it. It is recomme nded that all J IO analysts, along with analysts from throughout the inte lli gence

community, (recommended in Chapter 6 on ONA), should be given

some formal basic tr aining in addition to their on-the-j ob and

other training. Further speci fie training requirements of J IO

staff should be met through JIO resources or in associatio n with courses conducted by the Services. There would also be

advantages if officers from areas in Defence which are major

consumers of J IO's product attended the basic course in

intelligence train ing.

INFORMATION SYSTEMS

7.9 With the extensive introduction of on-line computerized handling of information, JIO is on the verge of the most

profound change in its method of operati on since its precursor

was established in 1947. The efforts o f J IO to date are

commended. The next stage planned in JIO 's computerization

p rogram is the development of systems for the receipt,

distri bution, filing and manipulation o f the various types of

foreign intelligence received, or capable of being received

electrically into JIO. In due course it is expected that major

users (such as Defence Central, ON A and Serv ice Co mmands) will have access to the systems JIO is developing. Its proposals to

127.

continue in the development of computer-based systems are fully supported, consistent with the evolution of proven capacit y of the necessary hardware and software.

SECURITY

7.10 JIO's management is aware that physical security, document security and personnel security are all of fundamental importance if JIO is to discharge its responsibilities effectively. While present arrangements have been judged to fulfil official security requirements, it may be time for JIO management to consider seeking the support of ASIO in

undertaking a general security audit.

7.11 JIO should continue to liaise closely with DSD on computer security issues.

FINANCE

7.12 Existing arrangements for consideration of JIO' s budget within the Department of Defence are regarded as appropriate. Although JIO is responsible for contributing to some national intelligence requirements, its fundamental purpose is to meet Defence requirements. No grounds were found to doubt that JIO's bids are given careful scrutiny and its budget allocation is determined after full consideration of its needs within the context of national Defence priori ties. It is recommended that Defence should continue to take account of the relatively high expenditure which JIO will from time to time be required to make on items such as computer systems.

OTHER MATTERS

7.13 A submission and comments were received on the problems experience d for the

by JIO because

translation of of the limited resources available foreign language material for

intelligence purposes. JIO has undertaken several studies in

128.

recent years of arrangements for translations but has not been able to resolve the difficulties from within its present resources.

7.14 It is suggested that JIO, the Defence Department and other bodies as appropriate need to take some action to overcome these difficulties. In view of the common interest in the intelligence community, and in at least some policy departments, the matter

might appropriately be considered by the proposed National Intelligence Committee.

7.15 While acknowledging the arguments against a change in JIO's title and recognising that it is not of high priority, it is suggested that consideration be given to changing the title to a name which more accurately reflects the work it undertakes,

such as Defence Intelligence Organization.

129.

GUIDE TO RECOMMENDATIONS

Introduction

Recommendations which are grouped at the end of each of Chapters 3 - 5 inclusive are referred to below. The purpose of this

listing is to provide a convenient point of reference to the recommendations. The references to the recommendations are not intended to act as a substitute for the terms of those recommendations as they appear in context in the main body of the report.

Subject of recommendation

Publication of report

ONA's assessment role and performance

Establishment of a National Intelligence Committee (NIC)

ONA's intelligence support for economic policy-making

Circulation of assessments within economic departments

Attachment of military officers to ONA

Director-General ONA and Defence Committee

Requirements of Department of Immigration and Ethnic Affairs

130.

Para

1.29

3.169-3.170

3.171-3.172

3.173

3.174

3.175

3.176

Subject of recommendation

JIO's role, priorities and performance

Establishment of a Defence Intelligence Committee (DIC)

Guidance to JIO by the Defence organisation

The Defence organisation's requirement for social /political briefing

Contribution of Imagery and Graphics Section

Defence requirements for strategic assessments

Contact with DSD analysts

Review of JIO's 'Publications Programme'

Clarification of JIO's role in operations

ONA's co-ordination role

Use of National Intelligence Committee (NIC)

Review of National Assessment Priorities

National Intelligence Collection Requirements Committee

Studies of various issues

Annual overview of intelligence community

131.

Para

4.131

4.132-4.133

4.134

4.135

4.136

4.137

4.138

4.139

5.47

5.47

5.47

5.47

5.47

.Z\PPENDIX A

TERMS OF REFERENCE

COMMONWEALTH OF AUSTRALIA

ELIZABETH THE SECOND, by the Grace of God Queen of Australia and Her other Realms and Territories, Head of the Commonwealth:

To:

THE HONOURABLE MR JUSTICE ROBERT MARSDEN HOPE, C.M.G., Judge

of Appeal, Supreme Court of New South Wales

GR EETING: WHEREAS it is desired to have a judicial review of the

activities of Australia's security and intelligence agencies, namely, the Australian Security Intelligence Organization, the Australian Secret Intelligence Service, the Defence Signals Directorate, the Joint Intelligence Organisation and the Office of National Assessments (hereinafter called "the agencies"):

NOW THEREFORE We do by these Our Letters Patent issued in Our name by Our Governor-General of the Commonwealth of Australia on the advice of the Federal Executive Council and in pursuance of the Constitution of the Commonwealth of Australia, the Ro yal Commissions Act 1902 and other enabling powers, appoint you to be a Commissioner to inquire into, and in relation to -

(a) the activities of the agencies, especially since the completion of the inquiry made by the Royal Commission appointed on 21 August 1974 to inquire into matters relating to the intelligence and security services of the Australian Government (hereinafter called the Ro yal Commission on Intelligence and Security), with

particular reference to -( i) the progress made in implementing

decisions on the recommendations of Commission on Intelligence and Security Protective Security Review;

Government the Ro yal

and of the

(ii) whether the agencies have efficiently, effectivel y and properly served the interests of the

Australian people and Government, including whether effective arrangements exist for the establishment of policies and priori ties, for the co-ordination of their activities and for the oversight of their work; (iii) whether any changes in existing law and practices

are required or desirable -(A) to ensure that the agencies are properl y accountable to Ministers and the Parliament; (B) in relation to keeping the Leader of the

Opposition informed on matters relating to securit y and intelligence;

132 0

(b)

(c)

(d)

(C) to provid~ for p~oper safeguarding, including safeguarding against unauthorised publication of intelligence, including information ' provided b• foreign governments in confidence∑ (iv) whether there IS adequate provision for effective'

r~dress for any persons who may be unjustifiably

disadvantaged by actions of the agencies; (v) whether ex~sting law enables effective oversight by the Auditor-General of the Australian Security Intelligence Organization and the Australian

Secret Intelligence Service in financial matters; whether the activities of the Australian Security Intelligence Organization, especially since the completion of the inquiry made by the Royal Commission on Intelligence and Security, have been carried out in compliance with the law, in particular the Australian

Security Intelligence Organization Act 1956, the Australian Security Intelligence Organization Act 1979 , the Telephonic Communications (Interception) Act 1960 and the Telecommunications (Interception) Act 1979;

further to the inquiry In relation to paragraphs (a) and (b) abcve, all the circumstances, inclu d ing the actions of the Government, surrounding the expulsion from Australia of Mr Valeriy Nikolayevich Ivanov, First

Secretary, Embassy of the Union of Soviet Socialist Republics, and the involvement of Mr Harvey David Mathew Combe in those circumstances; and any other related matters to which the attention of the Commission is directed by the Prime Minister in the

course of the inquiry:

AND We require you as expeditiously as possible to make your inquiry and to furnish to Our Governor-General of the Commonwealth of Australia -(e)

(f)

(L. S.)

*

first and as soon as possible, a report of the results of your inquiry and recommendations in relation to the matters specified in paragraph (c); and a report or reports as soon as possible, and in any event not later than 30 June 1984,* of the results of your inquiry and recommendations in relation to the matters specified, or referred to, in paragraphs (a),

(bj and (d).

WITNESS His Excellency the Right Honourable Sir Ninian Martin Stephen, a member of Her Majesty's Most Honourable Privy council, Knight of the Order of Australia, Knight Grand Cross of The Most D~stinguished order of saint Michael and Saint George, Kn1 ght Grand

Extended to 31 December 1984 by Letters Patent issued on 18 May 1984

133.

Cross of The Royal Victor ian Order, Knight Commander of The Most Excellent Order of the British Empire, Knight of the Most Venerable Order of the Hospital of Saint John of Jerusalem, Governor-General of the Commonwealt h of Australia and Commander-in-Chief of the Defence Force.

Dated this seventeenth day of May 1983.

By His Excellency's Command, BOB HAWKE

Prime Minister

134.

N.M. S'T'EPHEN , Governor-General

( Director-GeJ>eral

'- De puty Director-GeJ>eral fDlit ical/Strategic Division Level 3

ONA ORGANISATION CHARI'

~Special l'.dvi ser

l.evel 2

APPENDIX B

Head, &lst and South Asia Branch Level 1

Head, Southeast Asia and Pacifi c Bt:anch Level 1

H<>.ad, Americas/Europe/Middle

&1s t/Africa Branch Level 1

Bead, Stra h..->gic Analysis Uranch I.eve 1 1

~Deputy Director-GeJ>eral

Economic/Financial Division

[

flea

~----------------------------~

Level 3

'-----------------Uead, curt:ent Intelligence Br ar ~h Level 2

Bead, Asia/Pacifi c Econcmic Branch Level 1

'---------------------------------------------------------~---------- Ch i ef Ex ~~tiv e Officer

Managarent Services Branch Class 11

135.

APPENDIX D

ONA PRODUCT (NON-WEEKLY) 1978 - 30 JUNE 1984

(By ONA Reporting Years, 1 November - 31 October)

1977/ 8 1978/9 1979/80 1980/ 1 1981/2 1982/ 3 1983/ 4 A. Assessments ( i) Political (7) 22 14 8 9 10 ( 2)

( i i) Economic (1) 11 10 9 7 (-)

B. Research Memos ( i) Political (-) 3 7 5 9 11 ( 5)

( i i) Economic (-) 3 1 6 4 ( 4)

c. Current ( 28) 31 21 25 21 20 (15)

Reports

D. Situation (11) 6 2 1 7 7 ( 8)

Reports

E. Current (-)

Situation

19 58 66 (57)

Analyses

COMMENTS BY ONA

The striking features of this table are:

the high number of Political Assessments in the first two full years, the reduced but sustained number (an average of nine) in each of the next three years, and the drop to two for 1983/84 (eight months);

the relatively steady output of Economic Assessments at an average of nine a year until the precipitate drop to zero in 1982/83 and 1983/84 (eight months);

the fluctuations in the number of Research Memos; generally about a rising trend compared with the first full year;

the reasonably steady output of Current Reports in the last four years, and of Situation Reports in the last three years;

the rapid increase to a high and steady level in the number of CSAs since they were introduced in the second half of 1980/81.

136.

The drop in 1983/84 in the number of political Assessments was not due to policy but to 'normal' fluctuations and to work on other things (Royal Commission submissions, NICRC, re-appraisal of the Global Military Balance) taking as much time and thought as assessments but not counting as such. We hope to qet back to a more 'normal' level in 1984/85. -

The drop in economic Assessments has been more marked and over a longer time. This was the result of various factors: difficulties in recruiting economists, the introduction of the weekly economic Intelligence Notes, and difficulties in finding wo rthwhile topics for Economic Assessments. It also reflected

disappointment with a number of draft assessments which were taken to a very advanced stage before being abandoned because they were of inferior quality or of insufficient interest. A determined effort is being made to put more weight of effort

into economic Assessments, to produce a more balanced economic output.

Another general point to note is that numbers do not tell the whole story: an Australian Security Outlook or a Glohal Military Balance (GMB) takes as much effort as three or four normal assessments; and some papers, such as the Re-appraisal of the GMB, submissions to the Royal Commission, and Intelli gence Notes

for the Prime Minister, do not figure in the statistic s at all.

The statistics for 1977/78 and for 1983/84 have been put in brackets because, in each case, a period of eight months only is covered.

137.