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Legal and Constitutional Affairs Legislation Committee
Department of Home Affairs

Department of Home Affairs


CHAIR: The Senate has referred to the committee particulars of the proposed expenditure for 2017-18 for the portfolios of Attorney-General's and Home Affairs, and other related documents. These are additional budget estimate proceedings, and the outcomes to be heard today during today's estimates are from the Home Affairs portfolio. I welcome Minister Fifield representing Minister Dutton and also Mr Pezzullo, the new departmental secretary. I would assume, Mr Pezzullo, in your opening statement you will give us some indication of the arrangements for the new portfolio.

The committee has set Tuesday, 10 April as the date by which answers to questions on notice are to be returned. We've also decided that written questions on notice should be provided to the secretariat no later than Tuesday, 13 March. All evidence is to be taken in public session. This includes answers to questions on notice. In giving evidence to the committee, witnesses are reminded that they are protected by parliamentary privilege. It is unlawful for anyone to threaten or disadvantage a witness on account of the evidence given to a committee, and any such action may be treated by the Senate as a contempt. It is also a contempt to give false and misleading evidence to the committee. Officers and senators will be fairly familiar with the rules of the Senate governing estimates, but if you do have any queries please contact the secretariat, who has copies of the rules.

Any questions going to the operations or financial positions of the departments and agencies which are seeking funds at estimates are relevant questions for the purposes of estimates hearings. The Senate determined that by resolution back in 1999. There are no areas in connection with the expenditure of public funds where any person has the discretion to withhold details or explanations from the parliament or its committees unless the parliament has expressly provided.

The Senate has resolved that an officer of a department of the Commonwealth shall not be asked to give opinions on matters of policy and shall be given reasonable opportunity to refer questions asked to superior officers or to the minister. This resolution prohibits only the asking of opinions on matters of policy and does not preclude questions asking for explanations of policies or factual questions about when and how policies were adopted.

If a claim of public interest immunity is raised, witnesses are reminded that a statement that information or a document is confidential or consists of advice to government is not a statement that meets the requirements of the 2009 order. Instead, witnesses are required to provide some specific indications of the harm to the public interest that could result from the disclosure of the information or the document.

The committee has agreed to permit media to film today's proceedings. I remind the media that this permission to film can be revoked at any time and filming may not occur during suspensions or after the adjournment of proceedings. If a witness objects to filming, the Commonwealth will consider this request. Copies of the resolution concerning broadcasting of committee proceedings are available from the secretariat.

With those formalities gone, I welcome the deputy chair, Senator Pratt, and other senators here. Minister, would you like to make an opening statement at all?

Senator Fifield: No, thank you.

CHAIR: Mr Pezzullo, would you like to make an opening statement?

Mr Pezzullo : Thank you. I will take the opportunity to explain portfolio arrangements, and so this opening statement is perhaps two to three minutes longer than what is normally the practice. I do apologise for that in advance.

Senator KIM CARR: Can we get a copy of it now?

Mr Pezzullo : Yes, I'm happy for that to be released.

On 20 December 2017, the Department of Home Affairs was established and I was appointed as its secretary. The former Department of Immigration and Border Protection, or DIBP, was completely incorporated within the new department, as were elements of four other departments, namely the departments of the Prime Minister and Cabinet, Infrastructure and Regional Development, Social Services and the Attorney-General. In addition to the Department of Home Affairs, the portfolio will also consist of the following agencies: the Australian Security Intelligence Organisation, subject to the passage of relevant legislation, which is currently before the parliament; the Australian Federal Police; the Australian Border Force, which, I might add, whilst established within the Department of Home Affairs for budgetary, employment and administrative purposes, is operationally independent; the Australian Criminal Intelligence Commission; and the Australian Transaction Reports and Analysis Centre, known as AUSTRAC.

In terms of ministerial oversight, the portfolio has the following ministers: the Minister for Home Affairs, who sits in the cabinet and who is also separately sworn as the Minister for Immigration and Border Protection; the Minister for Citizenship and Multicultural Affairs; the Minister for Law Enforcement and Cybersecurity; and the Assistant Minister for Home Affairs. The core functions of the department are policy, strategy, planning and coordination in relation to the domestic security and law enforcement functions of the Commonwealth as well as managed migration and the movement of goods across our borders.

Of particular note, the department will focus on strategic policy development and coordination in support of its cabinet minister, who will for the first time in the modern history of the Commonwealth be charged with addressing these issues with full-time cabinet-level focus and accountability. On this note, I should say that in establishing the portfolio the government was especially attracted in this regard by the British precedent, which of course has seen a home office and home secretary in place since the late 18th century. I would like to quote from an observation that I wrote last year after visiting London for relevant discussions: 'One early observation is the paramount strategic role played by ministers in the UK system. There is no doubt in anyone's mind here that at the apex of the architecture of domestic security governance and coordination are the Prime Minister and the Home Secretary, the latter of whom is fully focused on the security and good order of the nation. Our British colleagues have been tested in this realm and have clearly arrived at a governance and risk posture where unity of command, singularity of purpose and clarity of political authority are hardwired into the security architecture in very tangible and operative ways. As we establish the Home Affairs enterprise, we would do well to reflect on this hard-earned learning, as a matter of constitutional principle and as an operative organising frame.'

Additionally, the department will perform the role of the nation's immigration authority, a function with which former officers of DIBP are very familiar and to which we are unwaveringly committed, as we understand fully well the vital role immigration has played in building our nation and enriching our society and national culture. Specifically, the department will be responsible for the delivery of key national policy and programmatic responsibilities, and I'll list these now: immigration and citizenship; multiculturalism and social cohesion, working with other departments and agencies on programs that are designed to help engender an inclusive, united and tolerant society; Commonwealth law enforcement and elements of criminal justice and countering transnational and serious organised crime; Commonwealth counterterrorism; countering violent extremism; customs and border protection; transport security; civil maritime security; identity and biometrics policy and programs; anti-money-laundering and counterterrorist financing; emergency management, including crisis management, disaster recovery and disaster resilience; critical infrastructure protection; cybersecurity policy and coordination—and I should note in parentheses that cybersecurity capabilities and systems are being consolidated into the Australian Signals Directorate, which will become an independent statutory agency within the Defence portfolio, subject to the passage of relevant legislation; and, finally, countering foreign interference and espionage.

Some commentary on the establishment of the portfolio continues to mischaracterise the new arrangements as being either a layer of overly bureaucratic oversight of otherwise well-functioning operational arrangements or, worse, a sinister concentration of executive power that will not be able to be supervised and checked. Both of these criticisms are completely wrong. As I said to this committee when I last appeared, as secretary of DIBP, the Department of Home Affairs will not engage in the oversight of statutorily independent agencies, which is properly and necessarily vested in parliamentary, judicial and/or statutory processes. Nothing in the establishment of the department will change or affect the accountability and oversight arrangements that this parliament puts in place through the passage of relevant laws.

Of particular importance in this regard will be the especially close relationship that the department will build with the Attorney-General's Department, which of course supports the Attorney-General and the nation's first law office, who will retain, with the passage of relevant legislation, important oversight powers with respect to ASIO ministerial authorisations and warrants and what are known as special intelligence operations. The Department of Home Affairs and the Attorney-General's Department will work closely across the entire span of issues that the nation faces in the areas of responsibility I listed earlier. And, reinforcing my department's own intrinsic understanding of the importance of the rule of law, our colleagues will be trusted and valued partners on all questions of legal and constitutional policy.

As I said at the last estimates meeting of this committee, all executive power is subject to the sovereignty of this parliament and to the supremacy of the law. In bringing the security powers, capabilities and capacities of the Commonwealth together into a single portfolio, these fundamentals will remain in place. All of them are crucial attributes of liberty. I repeat what I said last year to this committee: any contrary suggestion that the establishment of Home Affairs will somehow create an extra judicial apparatus of power bears no relationship to the facts or to how our system of government works, and any suggestion that we in the portfolio are somehow embarked on the secret deconstruction of the supervisory controls which envelop and check executive power are nothing more than flights of conspiratorial fancy that read into all relevant utterances the master blueprint of a new ideology of undemocratic surveillance and social control.

The national infrastructure assets, the supply chains and cargo systems, the air and sea travel systems and the cyber networks that the department will seek to protect, in conjunction with other agencies of state and with industry partners, are Australia's great platforms for economic activity and social connection. We will not achieve our mission if in the name of protection and security Australia is a closed-off and isolated place. If nothing else, our national character and our outwards orientation would in any event counter any such inclination. The department's mission will be to secure our nation's vital network systems and assets while at the same time facilitating the legitimate movement of people, goods and data as well as managed and orderly migration. Doing anything else would see protection and security become ends in themselves, whereas the purpose of state actions is to ensure that all can, to the maximum extent possible within the law, pursue prosperity, happiness and social fulfilment.

To conclude, the government has decided to reorganise itself in the face of new challenges and before the nation is caught out unprepared in the face of new vectors of threat and risk. In building a new institutional system of security, at all times under law, the challenge before the department and its portfolio agencies under the direction of the government of the day will be to accomplish four tasks simultaneously: (1) to preserve the traditional strengths of the Home Affairs agencies and, standing on the shoulders of those deep legacies, which are embodied in each of their highly professional and expert workforces, build future agency-specific capabilities; (2) to take advantage of the creation of this larger and more integrated portfolio to build scaled-up capabilities and exploit previously unattainable synergies in areas such as intelligence, data exploitation, advanced identity and biometrics capabilities, highly advanced digital systems where digital is designed into all processes and practices by default, artificial intelligence and natural machine learning systems, and ever more powerful computing systems and analytical tools; (3) to preserve the statutory independence of Home Affairs agencies and decision-makers and ensure that all Home Affairs activities and operations are always conducted under law and subjected to the supervisory checks that this parliament decrees; and (4) to ensure that protection and security are means to pursue greater ends—namely, economic prosperity, social cohesion and an open society. I look forward to appearing before this committee in the years ahead. Thank you.

CHAIR: Thank you. As senators know, my practice is to go in roughly 10-minute blocks so that everyone gets a chance, but we keep going until we exhaust all our questions. It's also been my practice to allocate questions roughly in accordance with the numbers in the chamber, which will usually mean two for the Labor Party, two for the government and then one for the crossbenchers. But we deal with that as we go.

Mr Pezzullo : If I may—and I apologise for interrupting—perhaps I could ask, just as a matter of guidance from you: under cross-portfolio, it is possible the Australian Border Force questions may be asked. Would you wish for the Border Force Commissioner to provide his opening statement at this point?

CHAIR: I am just getting to that. Because senators who are not here sometimes look at these programs and want to come in for, for example, program 1.4 IMA Offshore Management, which is done in outcome 1, it would be good if we could confine 'cross-portfolio corporate' and 'general' to matters that are really cross-portfolio where they interact. Border enforcement involves not only Border Force but also the department, doesn't it?

Mr Pezzullo : Yes.

CHAIR: Which does really put it in the category of cross-portfolio.

Senator KIM CARR: I have questions for cross-portfolio—for Border Force—so I would prefer to hear the opening statement now.

CHAIR: Thanks, Senator Carr. I will come to you when I finish musing.

Senator KIM CARR: That's what it is—musing. I am just indicating to you that under standing orders we are time limited—

CHAIR: Thank you, Senator Carr. You are entitled to speak when you are called upon to speak, and you have not been yet. Probably it would be better to have Border Force at the table. The committee did discuss this and we thought it was probably appropriate, although, it is outcome 1 in its own sense. Where they cross portfolios the committee may have to look at in the future where Border Force and the department are inextricably interwoven in the things that Border Force does. Is that correct?

Mr Pezzullo : As I intimated in my statement, Border Force logically would not have any standing or presence in cross-portfolio to the extent that it has no separate budget, employment or administrative capacity. All of those matters fall under me. It is operationally independent in the performance of its duties in the field. That is to say, it arrests people, it applies duties and it holds containers. The commissioner is completely independent in that regard. So, to answer your question directly, I would think that most questions of the Border Force typically would arise under programs. I apologise for interrupting you, but recalling the practice of certain senators to advance questions under cross-portfolio, the question is whether you want to hear—

CHAIR: What is cross-portfolio—

Mr Pezzullo : In my logical thinking it would be related to overall budget employment issues and the general administration of the department. Then, logically, anything that pertained to matters that tend to be asked about—detention, for instance, and regional processing—would always logically fall under one of the programs. I just note that that hasn't been the practice.

Senator PRATT: That is why we require Border Force now. These new arrangements are not particularly transparent to us yet, which means questions of budget, employment et cetera are very important to us now.

Mr Pezzullo : What I am saying is that on budget, employment and administration I am solely responsible under the administrative arrangements and the law.

Senator PRATT: But we don't want to be told later in the day that we fail to ask the questions that we wanted to at the right time in the day, which is why it is important.

CHAIR: If the committee agrees, what we might do is have some questions specifically on your opening statement, Mr Pezzullo. When we finish that we will then get Border Force forward and have questions on their opening statement, because there are a number of issues we would like to start on that relate to the department but really don't involve Border Force. I will start with a couple of questions before going to Senator Carr. On infrastructure and regional development, what came across to Border Force from that portfolio?

Mr Pezzullo : The Office of Transport Security.

CHAIR: What is it now within the department?

Mr Pezzullo : It came across as a module, so it is still the Office of Transport Security. My inclination at the moment is to keep that entity largely intact. It deals with aviation and maritime security of our ports and airports—things like access to airside, cargo screening arrangements and the passenger screening that you experience every time we go through an airport. It is those sorts of functions.

CHAIR: Do you have a flowchart for your department?

Mr Pezzullo : An organisational chart? Yes.

CHAIR: Could we get that at some time during the day?

Mr Pezzullo : Indeed. We will get that.

CHAIR: This element that came through from infrastructure and regional development, is it a division or a branch—

Mr Pezzullo : It was a division under the leadership of a first assistant secretary, or a band 2 officer.

CHAIR: How many divisions do you have within the portfolio now?

Mr Pezzullo : Overall in the department. I will get someone to do a quick count. Just visually, looking at the organisational chart, I would think that it is somewhere in the order of two dozen.

CHAIR: Two dozen divisions?

Mr Pezzullo : At least, yes. Possibly more.

CHAIR: Is there a group above divisions?

Mr Pezzullo : Yes. They are groups. Some departments call them programs. We call them groups. What is today known as the Office of Transport Security, which came across from infrastructure and regional development, sits within a broader group known as Infrastructure Transport Security and Customs.

CHAIR: So, you have your SES service and you have a number of groups do you?

Mr Pezzullo : Yes. In terms of the hierarchy, there is the secretary at the top, obviously, assisted by an executive, which consists of band 3 officers or deputy secretaries. In this case the relevant deputy secretary is Mr Grigson, who is responsible for areas pertaining to a number of functions: critical infrastructure, transport security—

CHAIR: I am not particularly focusing on that. I was just using it as an example.

Mr Pezzullo : Then, under Mr Grigson he would have a number of divisions. There is A division, known as the Office of Transport Security. So, they are two lines down.

CHAIR: How many groups are there?

Mr Pezzullo : Six at the moment, plus a number of national coordinators, who are also band 3 officers.

CHAIR: So, under the groups, each group has a number of divisions—

Mr Pezzullo : And then each division has a number of branches.

Senator KIM CARR: Would it be easier if we could get a table?

Mr Pezzullo : Yes. In fact it might be the case that a document has been made available. I will get a copy, if I am going to be asked questions about it.

CHAIR: Generally speaking, what are the total numbers in the department now?

Mr Pezzullo : The portfolio, once ASIO moves across, will be 23,000 overall. In the department proper it is in the order of 14,000.

CHAIR: What is the difference between the department proper and the portfolio?

Mr Pezzullo : The department is the Department of Home Affairs, which I head. At the moment we have four portfolio agencies that sit alongside the department, which are statutorily independent, but they are within the portfolio. They all, like me, report to the cabinet minister. The Australian Federal Police, ACIC, AUSTRAC and Australian Border Force. That is four. Then, with the passage of relevant legislation that is currently before the parliament, ASIO will move across soon.

CHAIR: Do they report to you, or direct to the cabinet minister?

Mr Pezzullo : To the minister.

CHAIR: You pay their wages, I assume?

Mr Pezzullo : No, except in the case of Border Force, which has its budgeted integrated with my department. Each of those agencies have their own employment, budgetary and administrative powers under relevant legislation.

CHAIR: So, they report direct to the cabinet minister and not to you?

Mr Pezzullo : Yes, which is not atypical. In all portfolios the departmental secretary is an adviser to the minister. I might well have views about what happens in those functional areas that I advise the minister on, but I don't have any legal authority over those agencies. That is not atypical in terms of our portfolio arrangements—

CHAIR: So, our questions to those agencies should be direct to them?

Mr Pezzullo : That's right.

CHAIR: They are in our program.

Mr Pezzullo : That's right. For instance, you have called the Australian Federal Police tomorrow morning, if I recall rightly.


Mr Pezzullo : The commissioner will appear independently. I will appear as the portfolio secretary. When you took evidence from agencies in the Attorney-General's portfolio, you might recall that you had the departmental secretary there alongside the Attorney-General, but the agency head would sit there independently and answer your questions.

CHAIR: Is ASIO in your portfolio or in the Attorney-General's?

Mr Pezzullo : Not at the moment. The government has announced a policy of moving it. A number of legislative amendments are required to various pieces of legislation. That legislation is currently being considered by the Parliamentary Joint Committee on Intelligence and Security.

CHAIR: Thank you for those preliminaries.

Senator KIM CARR: Could you outline which areas that were components of other portfolios prior to the establishment of the Department of Home Affairs have actually moved over? Which areas have actually moved over to the new portfolio?

Mr Pezzullo : Everything that constitutes Home Affairs has moved across, with several exceptions. One is all of ASIO. ASIO is still under the Attorney-General and is in that portfolio. And there are a number of small elements that remain in the Attorney-General's Department that will shift across with the move of ASIO.

Senator KIM CARR: Are there any other components that are yet to move from ASIO?

Mr Pezzullo : No.

Senator KIM CARR: ASIO is the only area outstanding is it?

Mr Pezzullo : The only agency. As I said, there are a number of sections in the Attorney-General's that will move across, and that's really a matter of convenience. Their work is so intimately tied with what ASIO does that for the moment, administratively, the government's decided to leave those functions there. I think I'm right in saying they're quite small.

Senator KIM CARR: Can you tell me what those units are?

Ms Noble : It's a small branch within the Attorney-General's Department that largely works on intelligence policy matters. It's about 25 staff, which will transfer into the Department of Home Affairs once ASIO joins the portfolio.

Senator KIM CARR: Has it got a name?

Ms Noble : I can' tell you the name but I can take that on notice.

Senator KIM CARR: Is it a secret or is there a reason for that?

Ms Noble : No, it's not secret. I just don't have the name of the branch to hand, but I can take it on notice and provide it to you.

Senator KIM CARR: Thank you. They're the only components that had not moved?

Ms Noble : Yes.

Mr Pezzullo : That's right, yes.

Mr Groves : There are some minor areas around corporate activities that we are still negotiating about with both Attorney-General's and the department of infrastructure and regional development.

Mr Pezzullo : What are these minor areas?

Mr Groves : Just around corporate activities.

Mr Pezzullo : Like what?

Mr Groves : Finance, IT and people-type activities.

Senator KIM CARR: These things are a big deal in the public service. In my experience they often cause a great deal of upheaval. The minor disputes that you referred to sometimes cause a considerable—

Mr Pezzullo : I'm not sure that Mr Groves referred to any disputes.

Senator KIM CARR: No, he didn't. I referred to them as disputes. There is the reason they have to move. There's a bit of argy-bargy still going on, isn't there, about who's got what in terms of the administrative board?

Mr Pezzullo : No. It's a very collegiate discussion about baselining resources. When you have to calculate corporate overheads that have been spread across a number of functions you just need to get the calculator out and—

Senator KIM CARR: So it's collegiate is it?

Mr Pezzullo : It's very collegiate and there's much collegiate calculation going on.

Mr Groves : There is.

Senator KIM CARR: How long's that been going on for?

Mr Pezzullo : The collegiate calculation?

Senator KIM CARR: Yes. The collegiate calculation.

Mr Pezzullo : Since late last year.

Senator KIM CARR: Late last year. Three months of collegiate calculation?

Mr Pezzullo : Yes.

Senator KIM CARR: I see.

Mr Pezzullo : Corporate and financial areas are meticulous as to—

Senator KIM CARR: Collegiately they have to be don't they?

Mr Pezzullo : every bean being counted in every particular row, and I value that in those officers.

Senator KIM CARR: Are they the only problems? Any challenges that you've faced in this shake-up?

Mr Pezzullo : In my experience it's been quite seamless.

Senator KIM CARR: Seamless?

Mr Pezzullo : Yes.

Senator KIM CARR: The government's talked about two phases of implementing the Department of Home Affairs, is that right? Do you talk about two phases?

Mr Pezzullo : The second phase is the move across of ASIO, subject, of course, to the passage of that legislation that I mentioned earlier.

Senator KIM CARR: Is it true, though, that we're no longer talking about two phases but that there are some three or four phases?

Mr Pezzullo : No.

Senator KIM CARR: It's not true?

Mr Pezzullo : Not in terms of the movement of major functions.

Senator KIM CARR: What are the other phases that the government's now talking about that are required to make this—

Mr Pezzullo : In terms of the movement of functions, once the pertinent legislation is passed and once the collegiate calculating activity comes to an end—I presume, Mr Groves, that at some point it does have a final point?

Mr Groves : Very soon, yes.

Mr Pezzullo : Thank you. Once those activities are finalised then the assembly of our functions will have been concluded.

Senator KIM CARR: When will that be concluded then?

Mr Pezzullo : The legislation, of course, is a matter for the parliament. The parliamentary joint committee has had its hearings and is considering those relevant matters. But those matters are out of our hands; they're really a matter for the parliament.

Senator KIM CARR: Yes. So it's dependent on legislative passage, and you can't determine—

Mr Pezzullo : Of course not.

Senator KIM CARR: when the election is and all sorts of things—

Mr Pezzullo : All sorts of thing, indeed.

Senator KIM CARR: This seamless collegiate transfer will depend upon some legislative change, for instance—

Mr Pezzullo : Certainly in relation to the movement of ASIO in the manner described in the government's announcement.

Senator KIM CARR: Would it also be the question about the powers of the Attorney-General? For instance, approved warrants?

Mr Pezzullo : That's what the legislation is about.

Senator KIM CARR: Exactly. I mean, these are not insignificant questions.

Mr Pezzullo : I'm not sure that anyone is suggesting that they're insignificant questions.

Senator KIM CARR: Are you concerned that there might be some legal limbo left for the security agents in this process?

Mr Pezzullo : No. Not at all, because it's binary. There is only ever one minister who holds the pen on those authorisations, and that pen is clearly held by the Attorney-General.

Senator KIM CARR: The Attorney-General?

Mr Pezzullo : Yes.

Senator KIM CARR: You're quite clear about that?

Mr Pezzullo : Without any doubt.

Senator KIM CARR: Not Minister Dutton?

Mr Pezzullo : In respect of ASIO?

Senator KIM CARR: Yes.

Mr Pezzullo : Until the legislation is amended, there is absolutely no question about the fact that all of ASIO—administrative, operational and otherwise—is under the oversight of the Attorney-General. There is no question about that at all.

Senator KIM CARR: And so who is responsible for briefings, for instance, at the moment?

Mr Pezzullo : Briefings of whom?

Senator KIM CARR: From ASIO? Who does ASIO brief at the moment in terms of—

Mr Pezzullo : The Attorney-General.

Senator KIM CARR: Only the Attorney-General?

Mr Pezzullo : No. The director-general can use his powers to brief any person that he deems has a need to know, including the Prime Minister and others. In some cases that is set out in statute and in other cases he exercises his discretion. As it turns out, the director-general, Mr Lewis, has been assiduous, ever since the announcement last July, in briefing both the minister-designate and, since the announcement, I think, in September, of my appointment as the secretary-designate, in keeping us very deeply and intimately across everything he is doing.

Senator KIM CARR: I see. He takes it as his responsibility to brief you, even though it's not required under the law?

Mr Pezzullo : He exercises his discretion under the powers that he has.

Senator KIM CARR: I see. In terms of the minister's statement, though, I see, for instance, that the Minister for Home Affairs, Mr Dutton, has been indicating that there will be a boost to counterespionage efforts? Does he now have authority in that area?

Mr Pezzullo : He's signalling his intentions in terms of his strategic priorities as the minister who will be responsible for those matters, subject of course to the passage of relevant legislation.

Senator KIM CARR: I'm sorry, didn't I read here that you just said that the Signals Directorate, for instance, will be in another portfolio?

Mr Pezzullo : The Australian Signals Directorate is not moving from Defence, no.

Senator KIM CARR: That's right. But he was commenting on the Australian Signals Directorate?

Mr Pezzullo : I'm missing the thread here, Senator? How—

Senator KIM CARR: But I'm making the point that he is managing to comment on a range of areas and I'm wondering whether or not there is any—

Mr Pezzullo : I'm not sure that the minister has said anything about the management of the signal's intelligence function.

Senator KIM CARR: I think he did say something. On 20 December there was a report in—

Mr Pezzullo : You might assist me with a quote?

Senator KIM CARR: He said:

… the Australian Signals Directorate - which primarily exists to support Defence by gathering foreign electronic intelligence - would be used more in Australian investigations into terrorism, drug-smuggling, child exploitation and other cross-border crimes.

I think that was in The Guardian. No—it was a 20 December 2017 David Wroe article. Maybe it was The Australian Financial Review.

Mr Pezzullo : Any minister on the National Security Committee is a client or a consumer of ASD activity, whether it's signal's intelligence or cyberactivities, many of which of course we can't ever discuss in a forum such as this.

Senator KIM CARR: No.

Mr Pezzullo : The overseeing minister—and I don't think that anything Mr Dutton has said contradicts what I'm about to say; in fact, I know it doesn't—for the ASD in terms of its capability is, of course, the defence minister.

Senator KIM CARR: I understand that. What I'm trying to get to is this integration. To what extent does the minister's writ extend, given the legislative responsibility which you referred to in your opening statement and what's been said on the public record by the minister about these security issues? He said that in these matters, in regard to terrorism, drug smuggling and child exploitation, about the Australian Signals Directorate:

"I think people will quickly understand what Home Affairs is about and the virtue of it when you see the element of the Australian Signals Directorate that has a cyber capacity that is now working more closely with the anti-gang members of the Australian Federal Police that are targeting an offshore venture."

He is clearly making these links, which he doesn't seem to have in terms of what you've just told us are his legislative responsibilities.

Mr Pezzullo : My apologies, Senator. I won't speak to the veracity of the quote, but I do recall words—

Senator KIM CARR: I'm sorry, it's in quotation marks.

Mr Pezzullo : to that effect. I always check what's in The Guardian.

Senator KIM CARR: No, I said The Australian Financial Review. It was David Wroe. No, it was in The Sydney Morning Herald.

Mr Pezzullo : I check all newspaper quotes carefully.

Senator KIM CARR: So it's not just Fairfax that you don't like? Is that what you're saying?

Mr Pezzullo : I check all newspaper quotes, just to be sure about veracity.

There are two issues at play here, and three in the context of the ASD. One, any national security minister is a client of the ASD, and again it is hard to go into specifics if we are in an open forum, but the foreign minister, the trade minister and other ministers would be as interested in the work of the ASD in supporting their portfolio objectives as anyone else is. Because the contrary logic—that is to say, ASD can only do work for the Defence minister—means that you can't use ASD's capabilities for any portfolio other than Defence, and military operations in particular. That is the first point.

Two, under the announcement made by the Prime Minister, the Minister for Home Affairs will actually have a concrete, material role in ASD's work because of the cyber security relationship that we have with ASD. To quickly spell that out, the National Cyber Security Adviser, Mr MacGibbon, works for me and he advises the minister and the Prime Minister. His technical capacity—his systems, his workforce—is embedded in the ASD in what's known as the Australian Cyber Security Centre. So there is a nexus that does not belie anything other than appropriate administrative arrangements, and nothing else.

Three, as a member of the NSC generally, I think the minister was making the point that in this era of threats which are multidimensional, they don't fit into neat portfolio lines and any kind of portfolio segmentation of the type I think you are premising would be unwise and imprudent.

Senator KIM CARR: Yes, but you have made a statement to this committee about the powers of the parliament to supervise your department and the functions that you now exercise.

Mr Pezzullo : Yes.

Senator KIM CARR: I'm drawing to your attention the minister's statements and the fact that you have told this committee that the powers of the minister are going to be spelt out in legislation. In fact, ASIO's powers go directly to the question of legislation. You've said the process of integration won't be completed until that legislation is passed by the parliament.

Mr Pezzullo : In respect of ASIO.

Senator KIM CARR: In respect of ASIO. Can I ask you this: did the Prime Minister actually seek to reassure the public and the security agencies that the powers of the Attorney-General specifically in regard to ASIO—the approval of warrants—will not be concentrated with Mr Dutton but stay with the Attorney-General? Has the Prime Minister sought that assurance?

Mr Pezzullo : Well, he has made a decision that that's how the powers are going to be divided.

Senator KIM CARR: That is right, and that would be determined by legislation.

Mr Pezzullo : Yes.

Senator KIM CARR: Where is that legislation?

Mr Pezzullo : It's currently before the parliament.

Senator KIM CARR: It's currently before the parliament. When do you expect it to be actually put to the parliament for debate and passage?

CHAIR: That's probably a matter for Senator Fifield rather than Mr Pezzullo.

Senator KIM CARR: I don't mind who answers it, but I want to know the answer to that question.

Mr Pezzullo : I can assist: it has been referred to Parliamentary Joint Committee on Intelligence and Security. I think I have said that perhaps half a dozen times this morning. It's a matter for that committee as to when it reports out, and, once it reports out, I presume both houses will consider the legislation on its merits. Perhaps the Minister might wish to assist.

Senator Fifield: I don't know the date that has been set for the PJCIS to report. In terms of scheduling, that is something we can seek advice on.

Senator KIM CARR: Thank you—if you wouldn't mind. This process will not be completed until that legislation is actually dealt with. Is that the case?

Mr Pezzullo : Home affairs as a department was created with the signing into effect of the Administrative Arrangements Order by the Governor-General. So the department exists. We are operating, we're paying people in the field, as it were. Four agencies have been moved across by an administrative decision of the Governor-General on advice from the Prime Minister. They are the four agencies I have mentioned: the AFP, AUSTRAC, ACIC and ABF are already part of the department. The final concluding element or module will be the move across of ASIO, subject to the passage of that legislation.

Senator HUME: I have questions about refugee resettlement arrangement with the US. I am wondering whether I need ABF to be at the table for that.

Mr Pezzullo : No.

Senator HUME: What is the progress of that resettlement arrangement?

CHAIR: Senator Hume, that's really something I'd rather deal with once we've finished with Mr Pezzullo's statement.

Senator HUME: That is absolutely fine.

Senator MOLAN: At the Press Club recently, the minister was asked a question about visas. I will save the detail of that until we speak to the relevant people later in the day. I wondered whether there were any other cross-portfolio initiatives like that? I can only imagine that we are looking for greater efficiencies and savings in what I assume we're doing with visas in the long run. Are there any other areas of cross-portfolio initiatives that are likely to go the same way?

Mr Pezzullo : Senator, you're asking me about cross portfolio initiatives now in home affairs.

Senator MOLAN: Yes.

Mr Pezzullo : As I stated in my opening statement, I will take you particularly to the four simultaneous priorities that I spelt out on, I think, the last page. Having regard to the fact that we are a larger enterprise, and that we've got access to more capability and more synergy arising from that scale of enterprise, we would be very determined to work hard in similar areas in relation to the application of advanced computing techniques, data exploitation, intelligence analysis, identity and biometrics techniques. And especially, across the board—and I think this is where one of the big pay-offs will arise—is the more pervasive application of artificial intelligence and natural machine-learning techniques across very large data sets. Visas are a good example, but there are plenty of other examples where the volumes—particularly in terms of cross-border movements of people, goods, data—are just getting so significant with globalisation that no human team or no human division or group—we talked about those before—can possibly stay across all the data flows. So I think, as we're doing with visas, the application of those advanced techniques is going to be an area of early pay-off.

Senator MOLAN: Certainly, that is to be admired. I assume the advanced computing aspects will be applied more to administrative aspects. Is that right?

Mr Pezzullo : No, Senator.

Senator MOLAN: Operational aspects.

Mr Pezzullo : The advances—particularly in the last several years—that you're seeing, that are disrupting just about every segment of industry, society and economy, are disrupting public enterprises as well. How you do your job, not just in the back office—of course, you use advanced data analysis for things like administration, payroll and the like, but you also use it to find patterns that are not discernible to the human eye; patterns in terms of frontline activity.

Senator KIM CARR: I want to press this issue about the legal state, because the question of legal protections and the civil liberties issue comes to the fore here. The ASIO Act at the moment makes it clear who issues directions to ASIO.

Mr Pezzullo : Yes.

Senator KIM CARR: Is it your view, Mr Pezzullo, that the current protections, in terms of who can issue directions to ASIO, would remain?

Mr Pezzullo : Yes, as announced by the Prime Minister and as codified in the draft statute, the Minister for Home Affairs will take on the overall responsibility for overseeing ASIO's work, except insofar as the issuing of three particular authorities are involved: MAs, or ministerial authorisations; warrants, and they are slightly different; and the authorisation of what are known as special intelligence operations that were passed by this parliament number of years ago now—all of which are in the ASIO Act. Those matters will be solely under the authority of the Attorney General.

Senator KIM CARR: Does the current bill that's before the parliament with regard to home affairs go to the warrant issues?

Mr Pezzullo : Yes. Because there is a consequential set of amendments that are required—and Ms Noble will assist me on this—to both the Intelligence Services Act and, from memory, the anti-money-laundering and CT finance legislation, such that the decisions that otherwise could be made administratively, by just simply moving the ASIO Act by an AAO, from one minister to another, requires some statutory amendment in relation to at least, I think, four pieces of legislation—is it not? I will get Ms Noble to explain it in detail more eloquently than I can, but, in terms of policy intent, the Prime Minister announced last July that ASIO as an agency would come under the supervision of the home affairs minister. All agencies, irrespective of their independent statutory decision-making, all have to have some kind of ministerial oversight, because how does the parliament otherwise enforce ministerial responsibility and accountability?

The Prime Minister said, 'except for the authorisation of certain types of operational activity'—authorisations, warrants and SIOs—'which would remain under the Attorney-General.' To achieve that state of affairs, a number of consequential amendments have to be made to various acts of parliament. I might ask Ms Noble to further explain.

Ms Noble : I don't think I can add anything at this point.

Mr Pezzullo : Ms Noble is very graciously saying that she can't possibly add anything to explain it further. I fear that she's being falsely modest.

Senator KIM CARR: So you're saying to me that you will not be able to direct the Director-General of ASIO, as the secretary of this department?

Mr Pezzullo : Absolutely not.

Senator KIM CARR: That's what you're—

Mr Pezzullo : There's no capacity in the current law for that to arise, and to put that in place in law you'd have to change the law. I, for one, as a citizen, if nothing else, would not want the parliament to pass such a law.

Senator KIM CARR: The Minister for Home Affairs won't be able to direct the Director-General of ASIO?

Mr Pezzullo : No. The law will not change in so far as it's currently written excepting so far as those three heads of authorisation will remain with the Attorney-General.

Senator KIM CARR: You've indicated that you thought that this was a highly collegiate transfer—you've said that?

Mr Pezzullo : Yes. There's even collegiate calculating going on in relation to—

Senator KIM CARR: Collegiate calculating.

Mr Pezzullo : corporate overheads.

Senator KIM CARR: All the programs, services—they've all come across without any difficulties from any of the other—

Mr Pezzullo : With the exception of those—

Senator KIM CARR: Apart from—

Mr Pezzullo : Not that there are any difficulties but, with those corporate overheads Mr Groves spoke about, the people who worry about these things—and we pay them to worry about them—have been meticulous and perhaps even fastidious in terms of the accounting treatment.

Senator KIM CARR: Let's be clear about that: you've said that's the case—there've been no integration questions apart from these ones that you've mentioned.

Mr Pezzullo : That's right.

Senator KIM CARR: So there'd be no questions regarding pay, conditions and entitlements of staff?

Mr Pezzullo : There are no questions in so far as the normal what are known as MoG arrangements—I need to explain what that is: machinery-of government-arrangements. Departments and governments of all political stripes do this. When departments move around, there are set rules that are enforced under what are known as the MoG guidelines—machinery-of-government guidelines—that pertain to whether you keep your conditions, whether you go onto a new enterprise agreement and whether, if that agreement is in negotiation, you preserve certain conditions. They're all matters that are done by a checklist.

Senator KIM CARR: And there've been no staff that have lost pay or accrued leave?

Mr Pezzullo : There'd be no-one who has lost pay because I've made determinations to ensure that conditions are preserved, but Mr Groves can assist.

Senator KIM CARR: That's the evidence you're giving: no-one's missed out—there've been no complaints about that issue?

Mr Pezzullo : I'll just check with Mr Groves. There shouldn't be any basis for complaints, because I've made a number of determinations to ensure that conditions are preserved. Mr Groves, unlike Ms Noble, won't be falsely modest and will add to my answer.

Mr Groves : We've just taken over the responsibilities of all the people who have moved over in the machinery-of-government change. I think there were a few teething issues at the edges around people who had not been paid some allowances, but that will get picked up in the next pay.

Senator KIM CARR: So how many people were subject to these teething issues?

Mr Groves : I don't have that; I think there was a handful to my knowledge, but we'll have to take that on notice.

Senator KIM CARR: If you would, thank you.

Mr Groves : Sorry, it was 14 people.

Senator KIM CARR: What's the size of the allowances that have not been paid?

Mr Groves : They're small. My understanding is they're things like first-aid allowance, if they were the first-aid officer, and those sorts of things, and nothing to their base pay or anything like that.

Senator KIM CARR: Are there any other integration questions with regard to staffing that you've detected?

Mr Groves : No, other than that there's, as I mentioned earlier in my evidence, some corporate staff that still haven't moved across but we're in the process of negotiating moves where those people will come.

Senator KIM CARR: So, as a consequence, you can assure the committee that the integration has not been rushed?

Mr Groves : No, I don't think it has been. With regard to other machinery-of-government changes, we've probably had additional time compared to some that are actually announced quite quickly. Apart from the ASIO piece that the secretary has spoken about, we hope to have this all resolved leading into the budget process.

Senator KIM CARR: For you the time line finishes with the budget process, does it?

Mr Groves : From a financial viewpoint, certainly, we want to ensure that all negotiations around appropriation transfers are finalised by that time.

Senator KIM CARR: What's the cost of the integration?

Ms Noble : So far the cost has been just over $2 million. What I'm including in there is the task force, or implementation team, that we stood up within the Department of Immigration and Border Protection to work on the detailed issues of the machinery-of-government change as well as those staff, including the Australian Border Force, that we seconded to the whole-of-government-led team in Prime Minister and Cabinet. They make up the bulk of the costs, and they were all, obviously, absorbed within our departmental appropriation.

Senator KIM CARR: If you could give me a breakdown of the costs, I'd appreciate it. And do it on notice; it's not—

Senator PRATT: Senator Carr, I have a supplementary question on the staffing. If you had 14 staff with difficulties, did you notify all other staff to check their existing entitlements to make sure they had been properly paid? Did you tell people they needed to check whether their entitlements had been properly transferred over?

Mr Groves : Yes. Mr Wright will help with the detail, but certainly we were very careful around the payroll. We wanted to make sure that we got it as right as we could. There were a number of quality assurance processes that were undertaken before we uploaded the payroll file—I think it was for around 780 people. To my knowledge, those 14 people have had some issues with their payroll.

Senator PRATT: It's my understanding that those 14 people had to draw to your attention the fact that there were difficulties and highlight that there was a problem. Did you tell everyone coming in under these arrangements to double-check their entitlements, and, if not, will you do so?

Mr Groves : My understanding is that we identified these issues quite early.

Senator PRATT: Who identified them?

Mr Groves : Through our QA processes that I just mentioned.

Senator PRATT: Did that mean that the department identified them or the staff concerned identified them?

Mr Groves : I'll ask Mr Wright to cover off the detail, but my understanding, like I said earlier, was that we had identified it through the quality assurance processes that we were conducting.

Mr Wright : Throughout this process we've worked very closely with the losing departments to ensure that people's pays and leave balances—annual leave, sick leave, everything—were transferred over correctly. In the process of advising people, we did on numerous occasions tell people to take a snapshot of their existing leave entitlements, existing pay, and to make sure that they did compare it on transfer. The issues that have been referred to before, we actually picked up as part of our QA processes. As part of the process we do a very thorough reconciliation of what we're going to pay people versus what they were getting paid, taking into account any adjustments made for people who may have taken leave during the period in question. For most people, the pay we're talking about is about $20—first aid allowance is about $20 per pay—and those people will be getting paid next pay. There were one or two where there was a large amount, around $600 or $700, and that related to higher duties and things like that, where it wasn't passed over in time for our pay cut-off. There's a very precise time line you have to get in order to get the money out of the actual Reserve Bank account.

Senator PRATT: And what about accrued leave and the like?

Mr Wright : They've all been transferred across. I'm not aware of any issues regarding accrued leave or leave balances. As I said, we did advise all employees coming across to keep a copy of their current leave balances to make sure that in the system—

Senator PRATT: That it's checked?

Mr Wright : it's checked.

Senator PRATT: Thank you.

Senator Fifield: Chair—if now would be a convenient time—I undertook to seek further advice for Senator Carr in terms of the home affairs and integrity agencies legislation. It was introduced into the House on 7 December.

Senator KIM CARR: Thank you.

Senator Fifield: The second reading speeches haven't commenced. It was referred to the PJCIS on 8 December. Public hearings have concluded. The intention was for that committee to report in February. I understand it will report shortly, and the intention is to secure passage of the legislation through both chambers as soon as is practicable.

CHAIR: We might just go to—

Senator KIM CARR: Could I just finish this question?

CHAIR: Yes, sure.

Senator KIM CARR: Ms Noble, you've indicated that, to this point, there was a cost of $2 million; is that right?

Ms Noble : I said about $2 million, yes.

Senator KIM CARR: Yes. Did you say 'to this point'?

Ms Noble : Yes.

Senator KIM CARR: What's the total cost expected of this machinery-of-government change?

Ms Noble : We haven't got a complete estimate. We are in the process of fitting out some office space in Barton in order to accommodate the increased level of classification that our leadership needs to work at, and have more routine access to. I'm talking about secret and top secret information. Those works are underway at the moment. So that is what I mean by that.

Senator KIM CARR: So you have no estimate of the additional cost?

Ms Noble : Not at this point.

Mr Pezzullo : It is not open-ended. It is going to be quite modest. I'd be very surprised if it broke single digits.

Senator KIM CARR: Ten million?

Mr Pezzullo : I'd be very surprised if it came over that.

Senator KIM CARR: Over 10?

Mr Pezzullo : Yes.

Senator KIM CARR: Or under 10? What are you saying? It's not open-ended.

Mr Pezzullo : If it came in over 10 then I'd be asking some pretty hard questions.

Senator KIM CARR: So nine.

Mr Pezzullo : If it were even that I'd be asking some hard questions of Mr Wright.

Senator KIM CARR: You must have an estimation. I can't believe the Public Service doesn't have an estimate for that cost.

Mr Pezzullo : We do have estimates.

Senator KIM CARR: You do have an estimate. So what is that estimate?

Mr Pezzullo : We have an estimate, but we don't want to necessarily allow our tendering partners to have a sense of what our budget is. That is a fairly conventional practice. When the bills come in, I'd be very surprised if it came in over 10—

Senator KIM CARR: This is not one tenderer, looking at this, so it's a bit hard to pull that routine.

Mr Pezzullo : I don't think I was pulling a routine.

Senator KIM CARR: You must know what it is going to cost the taxpayers to do this job overall. You've said it's cost you $2 million so far, and you have an estimate of what it's going to cost in total. This is a total procurement for this machinery-of-government transfer—under $10 million.

Mr Pezzullo : It will be essentially office fit-out activities. And you are right, Senator. It is not one large megacontractor. It is a normal fit-out.

Senator KIM CARR: I would like to know what the estimate is.

Mr Groves : If I may, there isn't one procurement for all of this. The estimate that Ms Noble provided was in relation to a whole range of costs.

Senator KIM CARR: To date. I've got that.

Mr Groves : That is to date, yes.

Senator KIM CARR: So what's the total estimate cost for this machinery-of-government change?

Mr Groves : In relation to the remaining costs that we're likely to incur, we've still got a very small implementation task force of staff that we've taken offline. They will continue to incur costs, but that's out of existing funding. The property works in Barton. We've currently got a budget of between $2½ million to $3 million, and those works are currently underway.

Senator KIM CARR: Is that the only additional cost apart from the recurrent for the task force?

Mr Groves : We haven't worked through, I guess, for the moment, that a lot of people that have moved in through the machinery-of-government change are still operating in their existing premises, including on their existing IT infrastructure. I suspect, once we work out a final plan on how we will provide IT services directly to those people in those buildings, there are likely to be some IT infrastructure costs, which I don't have an estimate for at the moment.

Senator KIM CARR: So the secretary's estimate of less than $10 million is correct?

Mr Pezzullo : We're not spending more than that, I can assure you.

Mr Groves : I think the secretary's estimate is spot on. It will be well under $10 million.

Senator KIM CARR: Yes, but clearly we've indicated already that it's considerably more than five.

Mr Groves : A little bit over five, yes, based on that.

CHAIR: There's a challenge for you for next estimates, Senator Carr: you can see how they go.

Senator KIM CARR: Take that on notice, would you. I'd like to know the cost of the machinery-of-government change. I'll come back to you. You've indicated there are some capital changes and some machinery space changes, as a result of classifications. I'll need to have a look at that, so I'll come back to those.

CHAIR: That's fine. Senator Molan for a little while, and then Senator Hinch for cross-portfolio.

Senator MOLAN: Three very quick questions, if I may. The first one is that, overall, you are running 23,000 people, but in the department there are 14,000 people.

Mr Pezzullo : Sorry, Senator. The 23 will be the full portfolio size with the shift of ASIO.

Senator MOLAN: Correct. What is your overall budget, in very rough terms?

Mr Groves : For the Home Affairs portfolio for 2017-18, it's approximately $7 billion, and $23 billion over the forward estimates.

Mr Pezzullo : Just to be clear for the senator, is that with or without ASIO?

Mr Groves : I think that is with.

Ms Noble : It is without.

Mr Groves : Without? Sorry.

Mr Pezzullo : Because the legislation is still in passage—

Mr Groves : Sorry, it is without.

Mr Pezzullo : we should just be clear about whether we are talking about ASIO in or out.

Senator MOLAN: That's good. I guess in some senses that puts into perspective the transitional costs that you may be going through. But the second question was—you mentioned that—

Mr Pezzullo : You will need a very powerful telescope to see the transition costs—

Senator MOLAN: I can imagine.

Mr Pezzullo : against the scope of the resources coming in.

Senator HUME: Can I just clarify: the 23 billion over the forward estimates, would that include ASIO?

Mr Groves : No, it doesn't. Sorry, Senator.

Senator MOLAN: The second question was in relation to the fact that the Minister for Home Affairs is sworn in separately to the Minister for Immigration and Border Protection. That's just a temporary issue to cover the changeover period, or is it something—

Mr Pezzullo : When you say 'temporary'—no, he is the cabinet minister for immigration.

Senator MOLAN: Okay. Why do we need that if he is the Minister for Home Affairs as well?

Mr Pezzullo : You might want to ask the Prime Minister directly, but as I understand his reasoning, from what he has explained publicly, he wanted to ensure that the important and crucial role of immigration in our nation is highlighted by the fact that there is an office holder in the cabinet known as the 'Immigration Minister'. But, unless the minister has anything to add, that is a question I would want to seek some further guidance from the Prime Minister on.

Senator MOLAN: Okay. Thank you. And the—

Senator Fifield: There is still separate immigration legislation to the other elements of the portfolio. But I don't have anything to add beyond that.

Senator MOLAN: No. And I think you've answered in that it's not seen as a temporary situation.

Mr Pezzullo : My understanding from the administrative changes is that it's the enduring state of the design of the ministry.

Senator MOLAN: The last question I had I think might be better in the Emergency Management area because it relates to that. It relates to where the National Aerial Firefighting Centre sits. I have a personal interest in that.

Mr Pezzullo : We might come to that under the program.

Senator MOLAN: Thank you. That's good.

Mr Pezzullo : Mr Chairman, if that's your—

CHAIR: Where does it sit in the department, did you mean?

Senator MOLAN: Yes. Does it sit in the department?

CHAIR: That would be here.

Mr Pezzullo : It certainly would be something our Emergency Management team could answer but I would need to take some advice.

CHAIR: About where they sit in the portfolio?

Mr Pezzullo : Emergency Management is within the department. It is not a separate statutory function. So EMA—the entity known as EMA—and to the extent that—sorry, senator, I missed the name of the centre?

Senator MOLAN: The National Aerial Firefighting Centre.

Mr Pezzullo : Right. Well, to the extent that that's a Commonwealth entity—

Senator MOLAN: It is, yes.

Mr Pezzullo : that is in any way under the jurisdiction—and I do apologise, senator, I have only had this role for nine weeks now, so I am still learning where some of the bits are.

CHAIR: Which group is that in?

Mr Pezzullo : Emergency Management. And that is a division of the department.

Senator MOLAN: Chair, the only reason I was asking about that was that I have a personal relationship with it, in that I was the director of it for some years and wondered what the arrangements were. But we will save that for later on.

CHAIR: Sorry, which group is that in?

Mr Pezzullo : Emergency Management. Mr Chairman, if you've got the organisational chart, dated—rather pre-emptively—5 March 2018—

CHAIR: Is the one that Mr Grigson is in charge of?

Mr Pezzullo : Yes. Under Home affairs, programs. You will see the Office of Transport Security, which I mentioned earlier. Directly underneath that is 'Emergency Management Australia', under Mr Crosweller—EMA. So you often hear about the great work that they do.

CHAIR: So this particular agency that Senator Molan is talking about is not separately mentioned in that?

Mr Pezzullo : No. If it's a Commonwealth entity, it will sit under EMA.

CHAIR: Okay. We will come back to that later, then. Is that all you had, Senator Molan?

Senator MOLAN: Yes, that's all I had.

CHAIR: Okay. Senator Hinch.

Senator HINCH: Thank you, Chair. Mr Pezzullo, last year at estimates you mentioned that Border Force commissioner Quadvlieg was on paid leave. Is he still on paid leave?

Mr Pezzullo : Yes.

Senator HINCH: Have you any idea when this investigation will end?

Mr Pezzullo : No. I don't have any advice for you on that.

Senator HINCH: So he has been on paid leave while this investigation has been going on, for nine months?

Mr Pezzullo : If memory serves me—and I will correct this—since the last week of May.

Senator HINCH: Okay. And he has been paid nearly half a million dollars?

Mr Pezzullo : I think, by this stage, if you include super contributions it would be in that order, yes.

Senator HINCH: And we have no idea when this investigation will conclude?

Mr Pezzullo : It is not an investigation or an administrative process that my department is running.

Senator HINCH: We've heard a lot this morning about the new whiz-bang home affairs department. The Australian Border Force commissioner has not been at work for nearly a year, being paid half a million dollars, and we do not know what the 'non-investigation' is about?

Mr Pezzullo : You didn't ask me that question, and I didn't answer in those terms. You asked me when it's going to come to a resolution, and I said that I'm not in a position to assist you. I'm not running that inquiry.

CHAIR: Who is?

Mr Pezzullo : I've spoken with Dr Parkinson, the head of the Public Service, and he and I have agreed that I would advise this committee that the oversight of the inquiry, the investigation that was triggered by a referral to ACLEI, is currently being managed by Dr Parkinson.

Senator HINCH: Do we know how many people are involved in this 'non-investigation' or inquiry? Are they involved full time, or what?

Mr Pezzullo : The original ACLEI investigation and the administrative inquiry—neither of those actions is under my remit, so I am not in a position to answer your questions.

Senator HINCH: Last year, I think, you said to Senator Carr that you had read press reports that there was something involving the commissioner and possibly a staff member. Do you recall that?

Mr Pezzullo : I said that I'd seen press reports to that effect, yes. I'm sure you have as well.

Senator HINCH: Have you taken it, personally, any further as secretary of the department?

Mr Pezzullo : I'll need to go back to my evidence of last year. A matter arose that was the subject of a complaint. It was referred to the Australian Commission for Law Enforcement Integrity. That's the evidence that I've given to the committee before. That's an independent statutory agency with the powers of a standing royal commission. It conducted an investigation. The element that I've added today with the agreement of Dr Parkinson is that, for reasons to do with the management of administrative inquiries, to ensure that natural justice is observed and that due process is observed, Dr Parkinson is leading that element of the administrative inquiry and follow-up action. You say that we're all in the dark; I'm saying to you that a complaint was made, that it was referred to a standing royal commission that focuses on integrity and that the relevant ongoing follow-up action is with Dr Parkinson. He and I agreed last week that I would so advise this committee. I'm not sure what it is that I'm illuminating you with.

Senator HINCH: Is it unusual for this to take such a long time?

Mr Pezzullo : All of these matters have got their own specific issues and they all have to be dealt with on the merits. I don't think there's any particular pattern or template for how to handle such matters. Beyond that I can't really help you.

Senator HINCH: As the secretary, you are a clever money man. It must concern you that—

Mr Pezzullo : I have other clever money people working—

Senator HINCH: All right. It must concern you that somebody is being paid half a million dollars not to work.

Mr Pezzullo : That's an opinion, I suppose. You're asking me to express a view.

CHAIR: Don't, then, if it's—

Senator HINCH: Isn't this why you approached Mr Parkinson: to try to get a deadline?

Mr Pezzullo : No. You're reading an imputation into how this matter has been managed that isn't necessarily an accurate one.

Senator HINCH: But you approached Mr Parkinson, obviously, to get some sort of resolution.

Mr Pezzullo : No. Dr Parkinson and I discussed at some point in the second half of last year how best to handle the ongoing management of this matter, and he and I agreed, for reasons that I'm not at liberty to go into a lot of detail about, because I'm not running the process, that it would be best handled under his leadership.

Senator HINCH: When did you last talk to Dr Parkinson about this?

Mr Pezzullo : Last week. He and I discussed the inevitable interest that this matter, not unsurprisingly continues to attract. He and I agreed that, so as to try to provide this committee with a degree of specificity, it would be best if I advised this committee that the oversight of the administrative inquiry that's going on in this matter is under his leadership and remit.

Senator HINCH: Because you knew it would come up at estimates?

Mr Pezzullo : Absolutely—well, I can't say absolutely; I was presuming, as it turns out quite accurately, that it would come up.

Senator HINCH: On a totally separate issue, who was the original representative from Buncombe County? You left it out of your speech.

Mr Pezzullo : I think his name was Walker. He was a member of the US Congress.

Senator PRATT: I wanted to ask you, Mr Pezzullo, if you're in effect confirming that ACLEI has finished its review?

Mr Pezzullo : No, I'm not. I am not confirming that.

Senator PRATT: Has it or has it not finished its review?

Mr Pezzullo : I am not in a position to comment. It's the subject of a referral to ACLEI, and the status of ACLEI's investigation is a matter best directed to ACLEI or its minister.

Senator PRATT: ACLEI will know whether it has or hasn't been finished, but you won't confirm—

Mr Pezzullo : I assume it will; it's conducting the investigation. But I am not confirming or denying the status of the investigation one way or another.

CHAIR: ACLEI is in Attorney-General's department, so we might be able to ask them tomorrow.

Senator PRATT: So ACLEI are still independent from these Home Affairs arrangements?

Mr Pezzullo : Of course. It's a statutory oversight body with the powers of a royal commission.

CHAIR: It comes within Attorney-General's.

Senator KIM CARR: Has the report been presented to you, Mr Pezzullo?

Mr Pezzullo : I agreed with Dr Parkinson that we would advise the committee accordingly. You shouldn't draw any imputation from this answer that it's the final report. ACLEI sent me a report in the latter part of last year, and, upon receipt of that report, Dr Parkinson and I discussed how best to take it forward.

Senator KIM CARR: Let's just get a few things straight. I want to get it on the record clearly. Mr Quaedvlieg voluntarily took leave on 27 May, is that correct?

Mr Pezzullo : The last week of May, whether it was the 27th—

Senator KIM CARR: I am told the 27th, is that correct? He voluntarily took leave?

Mr Pezzullo : He agreed to take leave, yes.

Senator KIM CARR: So it wasn't voluntarily?

Mr Pezzullo : He agreed to take leave.

Senator KIM CARR: But you told him to take leave, is that what you're telling us?

Mr Pezzullo : When someone agrees to take leave it's a consensual action.

Senator KIM CARR: Let's not be cute here.

Mr Pezzullo : No-one is being cute, Senator.

Senator KIM CARR: You've said to a senior officer of the Commonwealth of Australia, a statutory officer, 'Go on leave because of this allegation.' You sent him off to an investigation. You've had a report since last year. He sought to be returned. Why isn't he either charged, and dismissed if he's found guilty, or returned to work? Why not?

Mr Pezzullo : Those are questions I can't answer. They're not within my remit.

Senator KIM CARR: You've had a copy of this report since last year. You've been very cute in the answers you've been giving here today. If you have—

CHAIR: Senator Carr, you won't abuse public servants by calling them cute—

Senator KIM CARR: I'm not abusing anyone. I'm asking straight questions—

CHAIR: Senator Carr, you'll be quiet, please, while I'm talking! You won't abuse public servants by calling them cute, and making allegations against—

Senator KIM CARR: I wouldn't call Mr Pezzullo cute; I said he's being cute!

CHAIR: Senator Carr, that is an imputation on the professionalism of the officer and I won't have it here. Shouting at him won't get a different answer. He's already answered the question that you've asked three times. If you have other questions—

Senator KIM CARR: Mr Pezzullo, you've had the report since what date?

CHAIR: It was an interim report wasn't it?

Mr Pezzullo : I'd prefer not to describe the status of the report. It's really a matter for the ACLEI commissioner. I don't wish to comment on the ACLEI investigation in any way, shape or form. In terms of my personal knowledge of the matter, I received a report in the third quarter of last year at some point. Dr Parkinson and I agreed that with the administrative follow-up, to ensure that natural justice and due process considerations were applied, that matters were best deal with by him—that is to say, Dr Parkinson.

Senator KIM CARR: Mr Pezzullo, you talk about natural justice and due process. Mr Quaedvlieg took voluntary leave, according to his public statement. You are now putting a different imputation on it—

Mr Pezzullo : No, I'm not. Cute or otherwise I'm not. He agreed to go on leave.

Senator KIM CARR: He went on leave 'in good faith', he says. Various phases of administrative inquiry were conducted. He said:

I've been on the record consistently registering my concern about the length of time this inquiry has taken and that concern is compounding as the inquiry approaches its nine-month mark. My expectation was that the inquiry would only take several weeks.

Now, where's the natural justice in keeping an officer in this form of limbo, without charge, without telling him what the inquiry—presumably he's not been advised of the report. Or has he?

Mr Pezzullo : Well, (a) I don't think you should presume anything in terms of what's been put to him or what's not been put to him; (b) I'm not in a position to comment about what's been put to him or not put to him, because I'm not running the inquiry; and (c) perhaps I could add by way of comment—and I've seen Mr Quaedvlieg's on-the-record comments—that I can certainly understand why he's frustrated; it's frustrating to a lot of people, but there are also people who have to discharge their duties with professionalism and conscientiously.

Senator KIM CARR: What I'm concerned about is that a senior Commonwealth officer would be treated in this way. He's either exonerated or he's charged. And if he's exonerated then surely he should return to duty. If he's not exonerated, then surely he should be charged.

Mr Pezzullo : All those things go without saying. Of course a person either is dealt with adversely—they are, to use your phrase, charged, or action is taken—or is exonerated and comes back to work. That stands to reason. All I can do is agree with your premise.

Senator KIM CARR: Okay, so you've had a report since the third quarter of last year, and the officer is still on forced leave, at the time when this department's being formed—a critical point, I would have thought, in the formation of this new entity, whatever you think of it—in the critical time for a commissioner. Why is he still on forced leave?

Mr Pezzullo : Well, I wouldn't necessarily agree with your characterisation of the nature of his leave.

Senator PRATT: If he asked to come back tomorrow, could he?

Mr Pezzullo : The processes that saw the investigation undertaken by ACLEI and then the administrative process that's being led by Dr Parkinson have to be concluded before any certainty can be reached in this matter.

Senator PRATT: Why is Parkinson involved if ACLEI's doing it?

Mr Pezzullo : Well, it's difficult to go into the specifics of answering that question without starting to lay out some of the detail, which I've been studiously avoiding detailing, because (a) they're not matters for me to detail and (b) they're the subject of an ACLEI investigation. But I'll answer Senator Pratt in the abstract. ACLEI, like any commission of inquiry with those powers, makes recommendations about adverse or non-adverse action that should be taken—adverse in the case of wrongdoing and exoneration in other cases—and it's for other authorities to take those matters forward. ACLEI doesn't charge people and nor does it conduct administrative disciplinary proceedings. And in saying that, no inference should be drawn at all that that is at play here. I'm giving you an abstract answer and not a specific answer.

Senator HINCH: I agree with Senator Carr that this is a very important job; he's the commissioner of Border Force. You've seen an interim report. It's been three months—

Mr Pezzullo : Sorry, Senator, I—

Senator HINCH: Well, okay: you've seen 'a' report—

Mr Pezzullo : I studiously avoided classifying it. I received a report. Whether it was interim or otherwise, I didn't classify it.

Senator HINCH: You saw it at least three months ago, because you said 'latter part of last year', and it's nearly March. So, three months ago, and you've got a public servant here who's on something like $600,000 a year, so he's earned more than 150 grand in the last three months, and the report's still there. He's offered to come back, according to reports, and he's still in limbo land. It doesn't make sense.

Mr Pezzullo : It might well be the case that it doesn't make sense, but all I can say is that processes are being applied very diligently—and I don't want to speak for them; they can speak for themselves—whether it's Mr Griffin, who leads ACLEI and is accountable for the processes that he pursues, or Dr Parkinson, as the head of the Public Service. They are both supremely professional, conscientious and diligent servants of the Commonwealth, and they are handling these matters not just in the manner that they best see fit but, I would suggest to you, very carefully and diligently.

Senator PRATT: Whose responsibility will it be to act? ACLEI's?

Mr Pezzullo : At any one point in the process—it depends on where you are in the process. If it's the investigative phase, then clearly that's an ACLEI responsibility. In view of the rank of the officer involved, this makes it an exception. But ordinarily a secretary or an agency head then considers what administrative action has to be taken. And, again, I don't want any adverse inference drawn from that to suggest that adverse action is warranted here. But because of his seniority, special arrangements have to be put in place.

Senator HINCH: But a competent cop can wrap up a murder investigation in one year. Did you and Dr Parkinson put a deadline on this?

Mr Pezzullo : I'm sure that's a very colourful characterisation—

CHAIR: Look, is there an answer to it? Perhaps I can ask you a question, as the time's finished, and we'll come back to you, Senator Carr. Mr Pezzullo, as far as you are concerned, what is your responsibility? Can you employ this officer tomorrow?

Mr Pezzullo : He's not in my employment. He's a statutory officer who's appointed by the Governor-General on the advice of the government of the day.

CHAIR: So the question, as I understand it—legitimately to you, as the departmental secretary—is that you're paying out from your budget a certain amount of money each week, month or whatever.

Mr Pezzullo : Yes.

CHAIR: So, what is your responsibility? What can you do and what can't you do? That's what this committee is interested in.

Mr Pezzullo : It's really limited to taking advice from others on the ongoing nature of the activity and in that case whether leave is still justified.

CHAIR: So, you will get an advice from either the Public Service Commissioner or ACLEI—

Mr Pezzullo : No, from Dr Parkinson in this case.

CHAIR: From the Public Service Commissioner that you (a) should re-employ this officer or (b) shouldn't re-employ the public servant.

Mr Pezzullo : Or extend the leave.

Senator KIM CARR: Is he free to return to work?

Mr Pezzullo : He's on leave by mutual agreement pending the resolution of these matters.

Senator KIM CARR: So, he's not free to return to work?

Mr Pezzullo : Well, the matters would have to be resolved, I think, before he could return to work, yes.

Senator KIM CARR: And he can only be dismissed—

CHAIR: Senator Carr, we'll come back to you later.

Senator KIM CARR: Well, I'd like to—

CHAIR: Well, I know you have questions, but so do we all. You're not the only senator here. There are other senators—

Senator KIM CARR: And he can only be dismissed by the Governor-General. Is that correct?

Mr Pezzullo : Well, that's—

CHAIR: I'd ask you not to answer, because we will come back to Senator Carr later, and it will help if you follow the directions of the chair, not of Senator Carr. Senator Molan is next, for a few questions.

Senator MOLAN: I really have just one question, and it's based on previous experience in pulling together organisations such as the Joint Agency Task Force for Operation Sovereign Borders, which was miniscule compared with this organisation and other big interagency organisations that I've been involved in, to pull together five organisations, I think it is, with one more to come. It seems to me—and I've looked at your public statement—that there is no judgement that you've made within it, or no view, I don't think. Is it your opinion that this has gone extraordinarily well? Of all the amalgamations and organisational changes that we've done over time, it seems to me that this has gone extraordinarily well.

Mr Pezzullo : I think I'd prefer to say, at this stage, so far so good. I say that because obviously we're still on the journey in terms of the evidence I gave to Senator Carr earlier. The ASIO element of it still obviously needs to be resolved. That can be done only through the will of the parliament being expressed in legislation. There are some relatively minor—I don't wish to diminish them—issues around corporate overheads that still have to be nailed down. Mr Groves mentioned those things. And there are some residual policy functions from the Attorney-General's Department that Ms Noble spoke about that we thought best, on balance—even though they could probably have been shifted across, on balance, because they're so intimately tied with ongoing work that relates to ASIO—that those functions would be best retained within the Attorney-General's Department. Things around encryption, for instance, currently sit with the Attorney-General's Department.

That said, it is regrettable that 14 officers, I think, had varying degrees of relatively minor—but I don't want to diminish that; one dollar is not helpful, let alone 600 or so—issues around pay. There are still some ongoing issues that I think Mr Groves, or perhaps it was Ms Noble, spoke about in terms of connectivity. Certainly, as someone who is involved not just in this transition but was also involved in the former transition with immigration coming together with Customs, for instance, and the Joint Agency Task Force which you spoke about, I really would prefer to have more ubiquitous, common platforms. Then, if the government of the day—and Labor and Liberal both do this—decides to move big functions around the IT is more easily and more readily connected. That's just the way of the world. But, all those caveats aside, I think I would say, 'So far, so good.'

Senator STEELE-JOHN: Last week, in his Press Club speech, Minister Dutton announced that the government will introduce legislation to ensure that companies providing communications services and devices in Australia have an obligation to assist agencies with encryption. At what stage of development is this legislation, and when is the minister intending to introduce it?

Mr Pezzullo : I will make two points, if I may, and then I might ask Ms Geddes to join me here at the table. The specific drafting of potential legislation in this area, which was announced by the former Attorney-General, is still a matter in the transition. That is remaining with Attorney-General's for the moment. It relates to some of those other transitions that I was speaking about.

What Minister Dutton said last week in his speech at the Press Club was that the preference—and he stated this quite clearly—of the government is to work with industry to ensure that industry understands its obligations to assist in a number of areas.

Senator STEELE-JOHN: So there is no fixed time line at the moment?

Mr Pezzullo : I was about to say that the preference is through dialogue and consultation with industry, not necessarily to go down the path, inevitably, of legislation. But what Minister Dutton said was that if legislation were required, it certainly would be introduced at a time when the government best saw fit.

Senator STEELE-JOHN: Thank you. In the same—

Mr Pezzullo : But I might just check with Ms Geddes as to the specifics and whether we can assist you with any more precision about timetables.

Ms Geddes : The responsibility for the legislation is with the Attorney-General's Department. We're working very closely with them. We can talk to them today about helping you with those more specific answers tomorrow.

Senator STEELE-JOHN: All right, wonderful.

Ms Geddes : It is transitioning over to us, but it's linked very closely with some of the other legislation for ASIO. So it will come to us in March or April.

Senator STEELE-JOHN: Fantastic. Following on from that: in the same speech the minister emphasised the importance of strengthening our technical resilience to emerging challenges, particularly in the area of cybercrime, and that perpetrators of cyberattacks are advantaged by weak safeguards. Are the minister and the department aware of, or can you see clearly, the contradiction in asking for stronger safeguards whilst simultaneously seeking to undermine encryption?

Mr Pezzullo : I would question the premise of the latter part of your question. There is no intention in the minds of anyone for this. I have heard the Prime Minister on this and I've heard the former Attorney-General, the current Attorney-General and my minister all speak in terms of the value that society has gained in recent times from encryption. Encryption is an important part of safeguarding our personal affairs and our financial and banking details. The question in the government's mind—and this is vexing all governments—is: what happens when that social good, that is to say, encrypted communication, is exploited by those who already have a predilection to hide their communications because they are terrorists or transnational criminals, or they're involved in child exploitation and the like, and they are put beyond the reach of our agencies in terms of highly-advanced encryption? That is a balance to be struck. No-one is undermining encryption.

Senator STEELE-JOHN: I have taken that to be the minister's statement, but I fail to see how you intend to decrypt encrypted information, without the use of some kind of back door mechanism.

Mr Pezzullo : That is the shorthand, colloquial, and in many respects, highly ill-informed shorthand that is sometimes used in this field. I can only repeat what ministers have said, from the Prime Minister down: that there is no intention that we have, and we speak with our partners about this at all, to undermine legitimate encryption. The specifics of any scheme that may or may not be legislated in due course would have regard to those societal balances. You assume that a back door has to be created. I am just saying that that is a cartoon-like assumption, not that you are making, but you have seen the literature.

Senator STEELE-JOHN: How would you imagine that you would achieve the decryption event when encrypted—

Mr Pezzullo : Perhaps when the legislation, if we get to it, is before this parliament, we can have a more detailed discussion based on the specifics of what the government actually is going to propose in the legislation.

Senator STEELE-JOHN: Is in your view that there would be a way to achieve this outcome without in any way undermining the safeness of encrypted communication?

Mr Pezzullo : The challenge for governments and parliaments all around the world is how to ensure that encryption is used for legitimate societal purposes are not misused, in the same way the internet is misused through the dark web—that encryption is available to those who use it for legitimate purposes and not otherwise.

Senator STEELE-JOHN: I look forward to seeing the technological solution that you will create to bridge that gap. Can I take you now to the rather ominously named 'capability', which is shorthand for the National Facial Biometric Matching Capability. When Minister Keenan first introduced the system, in 2015, the National Facial Biometric Matching Capability was budgeted to cost $18.5 million. I am wondering, about 2½ years on, what the updated projected costs are for the completion of the scheme?

Mr Pezzullo : Unless Mr Groves can assist with any notes he might have in this folder I will have to seek the indulgence of the committee to call the relevant officers who are responsible for that program. It is in our Identity and Biometrics Program. They are not in Parliament House of the moment, but given that we have a considerable amount of time before us I can arrange for those officers to come to Parliament House, if you so wish.

Senator STEELE-JOHN: That would be wonderful. Also on cost, the system was initially planned for deployment in mid-2016. What contributed to the delays and what impact has that had on the overall cost?

Mr Pezzullo : When those officers join me at the table I am sure we can entertain that question at the time.

Senator STEELE-JOHN: That would be excellent. When Minister Dutton introduced the Identity-matching Services Bill 2018, he said the robust safeguards would be maintained. What are these privacy safeguards and how will they differ from existing government systems, which we know have sadly been susceptible to hacking events?

Mr Pezzullo : Two points: one, the team that will come up to speak about facial technology can also speak to that matter, but for your benefit, Mr Chairman, that is legislation currently before the parliament and I just cannot quite recall what your practice has been or what the committee's practice has being to canvass the merits of safeguards and other issues that are associated with legislative schemes.

CHAIR: It is all a bit hypothetical until it becomes an act of parliament, so it is probably not something we should deal with. We are dealing with cross-portfolio, corporate and general. Where are the people you are going to get up to Parliament House?

Mr Pezzullo : They work in the identity area. I will need to take advice from colleagues about which program—we can deal with that under cross-portfolio. I just need to get them here. These things are all done for accounting convenience.

CHAIR: I was just saying to the secretary that we really should have a look at the way this is done, because it means nothing the way it was done—perhaps that is the way it's meant to be, but it doesn't help with the running of the committee.

Mr Pezzullo : These programs are done for budgeting convenience. They don't always necessarily relate to the real world, unfortunately, but I find that with budgets. I am sorry, but I just cannot answer your question as to which program.

CHAIR: I am trying to confine cross-portfolio, corporate and general to those things that are cross-portfolio.

Mr Pezzullo : Mr Groves, can we assist the chairman. Where would identity, facial recognition, biometrics type issues—

CHAIR: Counter-terrorism perhaps?

Mr Groves : It is under outcome 1.

Mr Pezzullo : Indeed, but which program, Mr Groves? It doesn't intuitively strike one as being self-evident.

Mr Groves : No, because this is a translation of the—1.7.

Mr Pezzullo : 1.7, there you go—completely seamless.

CHAIR: With the committee's approval, when we get onto outcome 1 we might deal with programs 1.1 to 1.9 together—1.10 seems to be different—so that we can canvass all of those. I would rather you dealt with Senator Steele-John's question at that time and not in cross-portfolio, corporate and general.

Mr Pezzullo : So, under outcome 1 you want to group all of the subprograms 1 through to 9, so we will have all of our officers here.

CHAIR: They all seem to me to be inter-related. As I was saying to the secretary before, we really need to have a look at the way these estimates committees are done.

Mr Pezzullo : Did you hear that, Mr Groves!

Mr Groves : I was listening intently!

Mr Pezzullo : The chairman and I are on a unity ticket here.

CHAIR: We can talk about that later.

Senator Fifield: It is much more straightforward in single-outcome portfolios.

CHAIR: This is a new portfolio and I thought we needed some time today to help you work out where it is all going.

Mr Pezzullo : Thank you, Mr Chairman.

CHAIR: We will break for morning tea.

Proceedings suspended from 10 : 41 to 10 : 55

CHAIR: I call back to order the Legal and Constitutional Affairs Legislation Committee's inquiry into additional estimates. We are dealing with the Department of Home Affairs, cross-portfolio, corporate and general. The committee scheduled this to finish at 12.45. If we can finish earlier and get on to Border Protection, that would be good. We will now go to Senator Carr.

Senator KIM CARR: Mr Pezzullo, I'd like to return to this question of Border Force Commissioner Quaedvlieg. You've said that you want to exercise the process of natural justice and that you want to ensure that there is proper procedural fairness.

Mr Pezzullo : I said that procedural fairness has been applied. It's not for me to exercise it, because I'm not leading the administrative process.

Senator KIM CARR: But those principles are fundamental, are they not?

Mr Pezzullo : Absolutely, yes.

Senator KIM CARR: In any consideration of those issues, the application of natural justice goes to the issue of timing—speedy resolution of complaint. Does it not?

Mr Pezzullo : Yes, indeed, it does.

Senator KIM CARR: And, if the statutory officer took leave on 27 May, presumably the allegations that were raised against him were raised at that time. So it has been over nine months.

Mr Pezzullo : His leave has been for over nine months, that's right.

Senator KIM CARR: So I presume the allegations were made against him at that time.

Mr Pezzullo : Matters arose that required referral to ACLEI, yes.

Senator KIM CARR: Yes. There was obviously an allegation.

Mr Pezzullo : Yes.

Senator KIM CARR: His good health was not referred, was it. There was an allegation referred.

Mr Pezzullo : Yes. We're in agreement.

Senator KIM CARR: That matter has been concluded because you have had a report.

Mr Pezzullo : No, I didn't say that. I said, 'A report was received.'

Senator KIM CARR: A report was received over three months ago.

Mr Pezzullo : Yes.

Senator KIM CARR: And it said that Commissioner Quaedvlieg is anxious to return to work.

Mr Pezzullo : I've seen that report, and I understand it to be his position, yes.

Senator KIM CARR: That's right. But you've said that he's not free to return to work.

Mr Pezzullo : Well, he's on leave.

Senator KIM CARR: Yes. He's not free to end his leave and return to his duties.

Mr Pezzullo : No, he's not, because the matter has to be resolved.

Senator KIM CARR: That's right. The matter is to be resolved. But he can't be dismissed other than by the actions of the Governor-General—is that correct?

Mr Pezzullo : It's a statement of fact that applies to all officers appointed statutorily.

Senator KIM CARR: That's right. What is the process by which that can be undertaken?

Mr Pezzullo : I must say that I haven't looked at the detail of that in any specific terms. There would be some provision under relevant legislation. But I think (a) that is getting well ahead of ourselves, (b) it may not come to pass and (c), if you're asking me in the abstract, it's something you can read on the face of the statute. If you're asking me about how the particulars apply in this case, I couldn't possibly comment.

Senator KIM CARR: I'm interested in this. Commissioner Quaedvlieg is entitled to the presumption of innocence.

Mr Pezzullo : He most certainly is.

Senator KIM CARR: He's entitled to assert his innocence, which he is doing.

Mr Pezzullo : Absolutely. I'm agreeing with you.

Senator KIM CARR: And he wants to return to work because no charge has been put to him.

Mr Pezzullo : I can't really comment about the exchanges. Natural justice, as Mr Dutton said recently—and I'm going to speak in the abstract here; I want to make that absolutely clear—does not relevantly apply when 'charges are laid'. That's got a very specific meaning that relates to criminal justice and criminal prosecution. Natural justice also is applicable in relation to administrative action where 'charges are not laid'—and I'm going to speak here in the abstract, not in the specifics, and I'll reference in my evidence Mr Dutton's comments in the media recently and at the Press Club last week that natural justice in administrative proceedings also involves matters being put to the respondent and the respondent being given a chance to clarify matters, to find appropriate documentation, to respond on the specifics. That happens all the time in the public service.

Senator KIM CARR: And has that been done?

Mr Pezzullo : I'm not prepared to comment on the specific proceedings, because I'm not in charge of them. I'm just giving you a general answer lest you come away with the impression that this is a criminal justice matter.

Senator KIM CARR: No, but it might be if the allegations as reported have any validity.

Mr Pezzullo : You said, if I recall—and I do apologise if I mischaracterise it—that, in the absence of charges being laid, an officer in this position is entitled to expect to be able to return to work, to which I'm saying, without commenting on the specifics but in the abstract, a matter might still be the subject of administrative proceedings.

Senator KIM CARR: That's okay. It may well be that there are breaches of the law. It may well be that there are matters of administrative guidelines. It may well be that there have been breaches of codes of conduct. There may be a whole series of disciplinary offences under the Public Service Act.

Mr Pezzullo : In the abstract, they're all applicable.

Senator KIM CARR: That's right, all of those things. The point is that a senior officer is willing to return to work, has been on forced leave for nine months and had an inquiry into him. I presume he's received the report.

Mr Pezzullo : I don't have any—

Senator KIM CARR: You obviously received the report. Is it a classified report?

Mr Pezzullo : I don't have any visibility of the matters—

Senator KIM CARR: Okay. Is it a classified report?

Mr Pezzullo : Yes, and I don't have any visibility of the matters that have been put to Mr Quaedvlieg, the nature of his responses, how many times the matters have been put to him or how many times he's had an opportunity to respond, because I'm not running that process.

Senator KIM CARR: Sure. I can understand your point of view, but you are the senior officer of this portfolio, and the statutory officer is employed in this portfolio and can only be dismissed by the Governor-General under certain legal proceedings.

Mr Pezzullo : Again, I think it's highly speculative in the extreme to be talking about dismissal, but, as a matter of neutral fact, that is the way in which statutory termination does work. That's right.

Senator KIM CARR: That's right. You talked about natural justice and proper administrative procedure. I'm just wondering how that possibly applies after nine months and the way in which this man's been treated?

Mr Pezzullo : The only way to really fully and amply address your concerns is to speak in public about the particulars of the case, and I'm simply not prepared to do that.

Senator KIM CARR: Okay. If it can happen to Mr Quaedvlieg as a statutory officer of his seniority, what's it mean for the junior public servant? Does that mean they just get leant on and shoved out the door?

Mr Pezzullo : I stated before the break and I'm going to state again that Mr Griffin, the Law Enforcement Integrity Commissioner; and Dr Parkinson, who is both the secretary of the Prime Minister's department and head of the Public Service, are officers of the highest integrity and repute. They would be overseeing processes directly and through delegates where they conscientiously and diligently are applying due process considerations with natural justice. Without being able to comment on the specifics of how they're going about that, because I literally don't know, I have every confidence that they're comporting themselves in this matter with the highest levels of probity, integrity and professionalism.

Senator KIM CARR: What's the level of classification of the report?

Mr Pezzullo : From memory, it didn't have a national security classification. It's staff confidential.

Senator KIM CARR: So it's not available for the committee.

Mr Pezzullo : It wouldn't be a matter for me as to the release of the document; it's not my document.

Senator KIM CARR: So that question about its availability should be directed to who?

Mr Pezzullo : It's the document of the Australian Commission for Law Enforcement Integrity.

CHAIR: Well, you have it though, Mr Pezzullo. I guess it could be FOIed out of your department, if it were FOIable or subject to a Senate resolution?

Mr Pezzullo : That is true, Mr Chairman, yes.

Senator KIM CARR: Does it have to FOIed or can it be made available to the committee?

Mr Pezzullo : I'd want to take that on notice.

Senator KIM CARR: Thank you. If it's not available, will you be claiming executive privilege?

Mr Pezzullo : I expect so.

Senator KIM CARR: Can you answer that as part of your answer, please?

Mr Pezzullo : Yes.

Senator KIM CARR: Thank you. The officers mentioned before the cost of the restructure and that a number of classification upgrades have occurred. I understand your classification's been upgraded—is that correct, Mr Pezzullo?

Mr Pezzullo : Upgraded by whom?

Senator KIM CARR: Have you received a pay rise?

Mr Pezzullo : Yes.

Senator KIM CARR: Can you tell me the size of that pay rise?

Mr Pezzullo : I might just take on notice whether it's been published yet, so the—

Senator KIM CARR: There's an article in a newspaper that's published it, so—

Mr Pezzullo : The ranking of secretaries is determined by the tribunal and then, from memory, Dr Parkinson, as the head of the Public Service, makes determinations about where we sit within the—

CHAIR: Why don't you take it on notice?

Mr Pezzullo : I'll take it on notice.

Senator KIM CARR: So you can't tell me how much you're getting paid?

Mr Pezzullo : I can tell you what's on the website and, then when the website's adjusted, I'll tell you then.

Senator KIM CARR: Can you confirm the report in TheCanberra Timeson 6 February that indicated your current pay rate?

Mr Pezzullo : I think it accurately reflected my salary package, inclusive of super contributions.

Senator KIM CARR: So what is that?

Mr Pezzullo : I think the overall package, inclusive of super, is in the vicinity of $745,000.

Senator KIM CARR: That's right; that's your former role though, isn't it?

Mr Pezzullo : Yes, as DIBP.

Senator KIM CARR: What is your current role?

Mr Pezzullo : I'll have to take that on notice both in terms of the exact level but also its disclosability. It does get disclosed, because of all the rem tribunal—

Senator KIM CARR: That's what I'm saying: it's probably better if you assist the committee by telling us what you get paid.

CHAIR: You've said you'd take it on notice.

Mr Pezzullo : I'll take it on notice.

Senator PRATT: You don't know? It must be a lot then. Most people know how much is coming in.

CHAIR: We, on this side of the table, can only dream about it but carry on. That doesn't make it—

Senator KIM CARR: I asked some questions about the changes in the Public Service line-up. I think we're entitled to know what the secretary of the new department is being paid.

CHAIR: Senator Carr, your time's finished, but Mr Pezzullo said he'll take it on notice, so he'll come back to you with an answer.

Senator KIM CARR: You're talking about coming back today?

Mr Pezzullo : I'll take it on notice. I may be able to. It's a question of when the salaries are disclosed on the website.

Senator KIM CARR: I understand that, and you'll be able to tell me what band you're in, won't you?

Mr Pezzullo : Yes.

Senator KIM CARR: And you'll be able to tell me where you compare within the whole Public Service scaling at the moment, won't you?

Mr Pezzullo : I believe I'll be able to do that on notice.

Senator KIM CARR: But you can tell me that today, I'm sure.

Mr Pezzullo : If I can give you an answer today, Senator, I will.

CHAIR: We live in a glasshouse except if you're in the ABC, Minister!

Senator Fifield: We're working on that, Chair.

Senator KIM CARR: You're happy to provide some information very quickly.

CHAIR: The only people on public funds that are hidden.

Senator KIM CARR: Mr Pezzullo, has your office been upgraded?

CHAIR: Senator Molan has a question.

Senator PRATT: You don't want say the words and how much you earn on the public record today—is that it?

Mr Pezzullo : Senator, I earn a package of $745,000, inclusive of—

Senator KIM CARR: That's the old package.

Senator PRATT: Yes.

Mr Pezzullo : Inclusive of—

CHAIR: Mr Pezzullo, again, could I ask you to answer when I indicate you should answer, not when anyone might yell at you from the side.

Mr Pezzullo : Thank you, Chair.

CHAIR: Senator Molan has a question.

Senator MOLAN: It goes to wider than the portfolio generally; it goes to government as a whole. I've heard it said in the past that we all know the benefits of migration but, certainly, Customs is something which makes money for a country. You've touched on that in your opening statement. We've seen in the last reshuffle that Minister Cash now has, as a non-technical term, an amalgamation of various departments or functions—

Mr Pezzullo : Sorry, Minister Cash?

Senator MOLAN: Yes. I think it's called employment and workplace relations—excuse my ignorance.

Mr Pezzullo : Her department is now the Department of Jobs and Small Business. What her portfolio title is just escapes me for the moment. Perhaps the minister might—

Senator Fifield: Minister for Jobs and Innovation.

Senator MOLAN: Thank you. It seems to me that in the past—and your knowledge would be greater than mine of the history of the Public Service and the structure of government—we have certainly pulled elements of Defence together in a way which magnifies the impact of all those elements. In your view, given what you've now been through and where you are in relation to the transition from all the departments to Home Affairs, are there lessons in this amalgamation for government as a whole?

Mr Pezzullo : Lessons in the Home Affairs—

Senator MOLAN: Lessons in your Home Affairs transition for government as a whole. Are there other areas which, in your opinion, could be pulled together to achieve efficiencies and savings?

Senator KIM CARR: Officers are not supposed to answer—

Mr Pezzullo : I was going to say, Senator, if you're asking my opinion, or for a view on public sector reform more generally, we could be here all day, but it's not actually within my current remit.

CHAIR: Sorry, I missed that. If it was a request for an opinion, it's out of order.

Senator MOLAN: You're quite right. Are there lessons that have come out from what you have been through that might be relevant to other—

Mr Pezzullo : I'll limit my remarks to—

CHAIR: 'Are there lessons?'

Senator MOLAN: 'Are there lessons?' yes.

Mr Pezzullo : lessons rather than application to other areas of government. In terms of both the amalgamation of Immigration and Customs which occurred in October 2014, which you alluded to, and now building further on that the creation of the Home Affairs portfolio, essentially the lessons are threefold, but I add a fourth, which I mentioned in my statement. The first is: never lose the strength of the legacy of your expert workforce, whether they are Customs, ASIO, the Australian Federal Police or other agencies. The deep specialist subject knowledge and the expertise, the professionalism and what I would describe as the vocational excellence of those agencies must be preserved. There is a deep wisdom based on hard-earned operational experience that you get in those agencies. Equally, what those individual legacies don't constitute, though, is an ability to gain synergy—

Senator MOLAN: And that's the second point?

Mr Pezzullo : Correct, the second point. Without in any way diminishing those individual agency capabilities, traditions, workforce expertise, how can you leverage across the agencies in areas of common purpose, common endeavour? I gave a few examples in my opening statement. We don't all have to be chasing the artificial intelligence rabbit. We don't all have to be separately contracting—in a way, frankly, that probably benefits the vendor more than the Commonwealth—sophisticated data analytical techniques. We don't all have to be building our own data storage capabilities, whether physical or in the cloud. Those horizontal capabilities, as I describe them—when you treat them, for want of a better description, as a beam that sits across individual legacy capability, you get a strength of both being able to draw on the deep well of expertise, the deep traditions, the deep pride in those traditions, whether it's ASIO or Customs or the Australian Federal Police, but you also leverage areas where they, frankly, could be each enhanced and enriched through common endeavour.

The third learning which is particularly applicable in this portfolio, largely for many of the reasons that Senator Carr has been probing this morning, is to ensure that you've got your governance right. When you bring a large-scale operation together, what is in the individual discretion and what is in the individual statutory competence—that's easy because that's in the law—of those individual officers? You mentioned, Senator Molan, you and I would well recall from our time in Defence striking a balance between having an integrated Defence and also respecting the command prerogatives of not just the Chief of the Defence Force but the individual service chiefs. How you get those governance arrangements right is best done transparently in a documented fashion and in a way that creates common expectations that are mutually understood. In our portfolio, I said there are three: individual agency strengths; common purpose, common technologies, common capabilities; getting your governance and your business model and your operating model right.

I said there were three. In our case, there is a fourth, in my view, and I again called this out in my opening remarks. Because of the powers that are assembled in this portfolio—in many cases highly intrusive powers; no-one's made any secret of the fact that ASIO, for instance, has some of the most, if not the most, intrusive capabilities that pertain to Australian citizens of any government agency—having transparent checks and balances and having rule-of-law considerations that this parliament reflects upon when it looks at those supervisory arrangements, enshrining those in your governance model and being very clear about who's got independent discretion is also very important. That's particular to Home Affairs largely because of the potential to infringe liberty if you don't get those governance arrangements right.

Senator MOLAN: That's good. Thank you.

CHAIR: I think I was going back to Senator Carr and then Senator McKim.

Senator KIM CARR: Mr Pezzullo, have there been any capital works changes to your office?

Mr Pezzullo : Not to my present office, but Mr Groves referred to a fit-out of office accommodation in Barton that is currently underway. That's the office fit-out we spoke of earlier, and that's to ensure that the relevant floor or, at least the relevant area of that floor at Barton is able to handle communications at the top-secret plus level.

Senator KIM CARR: Are they the only changes, to do with the communications?

Mr Pezzullo : To consolidate the executive in a secure space, yes.

Senator KIM CARR: How many officers are affected by that?

Mr Pezzullo : Mr Groves and Mr Wright might join us at this point. It's the executive leadership team but—

Senator KIM CARR: I think Ms Noble indicated that there were some fit-out changes as a result of reclassifications.

Ms Noble : They're the same ones that the secretary referred to.

Senator KIM CARR: The same thing?

Ms Noble : Yes.

Senator KIM CARR: I'm interested to know how many—

Mr Pezzullo : When the senator refers to reclassifications, I think he's talking about employment classification. Are you talking about security classifications?

Ms Noble : Sorry if I was confusing. What I was referring to was the fit-out that will allow us, from a physical security point of view, to handle information at the top-secret and above level, which is different and on a more routine basis than was needed by the Department of Immigration and Border Protection

Senator KIM CARR: So this is communications?

Ms Noble : Yes.

Mr Pezzullo : And secure spaces, so you have communications, but you need—

Senator KIM CARR: So you lock down an area?

Mr Pezzullo : particular lockdown characteristics.

Senator KIM CARR: How many officers are affected by that?

Mr Groves : We're doing works on half the floor at the moment. There have been some officers that have been moved out while the construction works are happening, but Mr Wright will probably have an estimate of the number of people.

Mr Wright : It will be effectively about 26 people overall which is essentially, as the secretary said, part of the executive and their immediate support staff.

Senator KIM CARR: People, okay. And the changes go to their IT work?

Mr Wright : Correct. What we've had to do is actually build effectively a secret zone to support the classified material that Ms Noble is referring to, but also within that is a top-secret zone—a zone 5 SCIF, as it's commonly referred to. With the assisted communications, one thing I found out was that a top-secret videoconferencing facility isn't cheap.

Senator KIM CARR: How much is it?

Mr Wright : Roughly, I think, about $150,000. Part of the reason for that is that, now, in the new department we're spread across, I think, 18 buildings and locations within Canberra, so part of this is looking at how we avoid people endlessly driving cars and actually get the facilities up and running to link in with some of the other areas.

Senator KIM CARR: So that's part of your overall costs for the restructure?

Mr Wright : Yes.

Senator KIM CARR: Teleconferencing and the like?

Mr Wright : Yes, for this particular facility in Barton.

Senator KIM CARR: And are there any others? You said there is a secure area for the senior officers and their support staff. Are there any other changes required contributing to why their offices have got to be bigger?

Mr Wright : No, they're standard offices. In fact, we've tried to be a bit more thrifty. For example, the secretary's office won't have an en suite in the new facility; it's just a bare office.

Mr Pezzullo : I think I insisted on that, Mr Wright.

Senator KIM CARR: What did you say?

Mr Wright : The secretary won't have an en suite.

Senator KIM CARR: He won't have an en suite?

Mr Wright : No, we cut that out to save money.

Senator KIM CARR: Did you? Good. This will be a downgrading.

CHAIR: It's one thing we backbenchers have that you don't have, then.

Senator KIM CARR: So, the stories about the secretary's palatial bathroom are not true. Is that what you're telling me?

Mr Wright : Not in the new world, no.

Mr Pezzullo : Hang on, the old world wasn't—

Senator KIM CARR: So do you have to walk to the toilet? Is this what's happening?

Mr Wright : He will have to walk to the—

Senator KIM CARR: Is that a security problem?

Mr Wright : No, I don't believe so.

Mr Pezzullo : We'll all be in the secure enclave.

Senator KIM CARR: How many officers have had an increase in pay, though? Have there been increasing classifications?

Mr Pezzullo : When Ms Noble referred to classifications—

Senator KIM CARR: I know what you've said to me already, but I'm asking a specific question: are there any officers that have had an increase in classification, apart from the secretary?

Mr Pezzullo : Mr Groves will assist me. Not, per se, as a result of the MOG.

Mr Groves : I agree.

Senator KIM CARR: Okay, not as a result of the MOG, but have any officers had an increase in classification?

Mr Wright : Well, they may have got promoted.

Mr Pezzullo : I should answer in relation to myself, because I have the details on the—

Senator KIM CARR: I thought you would be able to get that fairly quickly.

Mr Pezzullo : My staff are very diligent.

Senator KIM CARR: I'm sure they are.

Mr Pezzullo : We'll come to other staff in a moment. But I'll answer the question and assure Senator Pratt that I've got absolutely no inhibition about stating this publicly; I was just checking those facts. As per the amendment made by the tribunal last week on 20 February, and this has been made public by the tribunal in the normal course, the total salary package inclusive of super—I'll need to get the salary breakdown if you wish—has now gone to $788,000, which is an uplift from $745,000. So it has gone from $745,000 to $788,000. That was a determination, as I said, made on 20 February, which was last Tuesday. You asked about comparisons in terms of the tiering of secretaries. It is on the same tier as the secretary of health and the secretary of finance. There are possibly others, but my note doesn't—

Senator KIM CARR: Where does it relate to Defence?

Mr Pezzullo : In relation to Defence and Foreign Affairs, I think it is one tier lower.

Senator KIM CARR: Thank you.

Mr Pezzullo : I'm very honoured, I must say, by the trust placed in me and the salary that is supposed to go with the job.

Senator KIM CARR: You are presumably on a contract. What is the term of the contract?

Mr Pezzullo : It's a standard secretary's appointment for five years.

Senator KIM CARR: Can I come back to the other question. Are there any other executives that have had a change in pay?

Mr Pezzullo : Not as a result of the machinery of government changes, no.

Senator KIM CARR: Have any other executives in the new department had a change in pay?

Mr Pezzullo : Yes, but not as a result of Home Affairs coming about.

Senator KIM CARR: Fair enough. How many executives have had a change in pay in recent times?

Mr Pezzullo : In terms of the general SES cohort—we're speaking of the former immigration and border protection department; I can't speak for SES pay in the other departments—there was a two per cent adjustment to their salary. Mr Groves will remind me of the details of that. That relates to the SES, the senior executive service officers, which in the former DIBP meant all the SES in the civilian side of the department as well as the SES equivalents in the Australian Border Force.

Senator KIM CARR: For the other departments that have come across, have they also had a two per cent increase?

Mr Pezzullo : They only would have had an increase that was pertinent prior to 20 December afforded to them by other departments. So former DIBP executives all got two per cent. Mr Groves might have the detail.

Senator KIM CARR: That's as a result of the enterprise agreement?

Mr Pezzullo : No. SES officers are employed directly by the secretary.

Senator KIM CARR: So what's the reason for that two per cent?

Mr Pezzullo : That is the general pay rise that sits within the government's workplace relations policy. I have given evidence on this. I'll have to refresh my memory as to when. It is exclusively and solely a decision that rests with me. I deferred that for a number of months whilst the balloting process was going on. As I recall it, it was several estimates ago now, I decided after the matter went to arbitration that it was unfair on SES officers, who don't collectively bargain—they have no collective bargaining rights—for them not be afforded the standard, Public Service wide recommended pay rise of two per cent. So I afforded them a two per cent pay rise.

Senator KIM CARR: What has the pay increase been for the other departmental officers who have moved across?

Mr Groves : Like I think I said earlier, we've just taken over the first payroll. In accordance with the MOG guidelines, staff come over at their current salary rate and get incorporated into the current EA that's in effect within Home Affairs, which currently is the DIAC enterprise agreement. They will take on all of the terms and conditions of that enterprise agreement. However, their pay is maintained at the level at which they came over.

Senator KIM CARR: Is the pay maintenance for all the officers? No-one is above that pay rate. They all got an increase.

Mr Groves : There may be officers who are, for instance, at an APS 6 level in a department that has moved over and may be at a higher rate than the APS 6 rate that is in force under the—

Senator KIM CARR: Do they get paid the maintenance?

Mr Groves : They get paid at the higher level, so nobody has a reduction in their take-home pay.

Senator KIM CARR: I'm interested in the SES officers at the moment. Were any immigration SES officers paid more than the arrangements prior to this change?

Mr Pezzullo : I'm not aware of any pay rises for SES above two per cent.

Mr Groves : No. Most SES have moved over at the rates of pay that were intact.

Senator KIM CARR: So the pay parity was maintained and there was no need for a pay maintenance for any SES officer.

Mr Groves : No, not that I'm aware of.

Mr Pezzullo : Mr Groves will check the details for me during the break, as required. I do recall having to make some decisions about whether foreshadowed or programmed increment increases that were generally applicable to some of those SES offices outside of DIBP would be, in effect, honoured. I did make some decisions—if I recall rightly—to honour those pay rises for some period of time, did I not, Mr Groves? Or was that non-SES?

Mr Groves : That was non-SES officers who were subject to a pay rise that occurred at the start of February within the Attorney-General's department.

Senator KIM CARR: But it has nothing to do with this restructure.

Mr Groves : No.

Senator KIM CARR: Mr Pezzullo, I'm suggesting to you that you're the only officer who secured a pay rise.

Mr Pezzullo : I'm not sure that I secured one. I've been afforded one. I didn't ask for it.

Senator KIM CARR: I'm not asking how it's came about.

Mr Pezzullo : You said I've 'secured' it.

Senator KIM CARR: The point is you have had a receipt of pay rise and you're the only one in this machinery of government who has one.

Mr Pezzullo : Which is what the tribunal does when it turns its mind to—

Senator KIM CARR: But is that a statement of fact?

Mr Pezzullo : As a statement of fact, they look at the role of secretaries when the scope of their departments change, yes.

Senator KIM CARR: So, as a result of increased responsibilities, you've been awarded an additional salary. That's the nature of it.

Mr Pezzullo : Yes.

CHAIR: Before passing to Senator McKim, Minister, can you confirm that those decisions are made by the Remuneration Tribunal?

Senator Fifield: The Remuneration Tribunal, to my understanding, makes determinations about particular categories of secretary. As to whether the final decision is given effect to, I'd have to check whether that's the secretary of PM&C who does that or not.

Mr Pezzullo : That's right, Minister. The tribunal sets out a series of pay points, as I recall it. We'll check this during the break. The secretary of PM&C will then—

CHAIR: The minister has already said that, Mr Pezzullo. The other thing, Minister, is: could you, on notice, indicate to me what the Minister for Home Affairs' salary is—not by figures but as a percentage of what the secretary receives.

Senator McKIM: That would give you the figure with one crack at a calculator, Chair.

CHAIR: Thank you, Senator McKim. That's a very astute observation.

Senator Fifield: I'll take that on notice.

Senator McKIM: I want to ask some questions about the closure of the Manus Island RPC—I'm sure that won't surprise you. To give you a heads up in terms of officers at the table, can you confirm firstly that it was Australia's decision to cut off the water, electricity, food and medication from over 600 men in the ‎Lorengau RPC?

Mr Pezzullo : Before I can answer that question—I don't think you were in the room. Mr Chairman, do you recall that you gave guidance earlier when we moved off my opening statement and we started to ask questions that might have a Border Force involvement? To answer the question from the senator, I'll need to be assisted by Border Force officers.

Senator McKIM: They're just arriving now.

CHAIR: What's the question?

Senator McKIM: The question is about—

CHAIR: No, we're not dealing with those just yet, Senator McKim. What we decided to do is deal with general and cross-border. As soon as we're finished with that—and I think we're getting close to that—we'll then get the Border Force in. They'll make an opening statement. What I've already said is we'll deal with programs 1.1 through to 1.9 altogether.

Senator McKIM: Chair, the program says that the cross-portfolio corporate and general includes ABF.

CHAIR: It has done, and it does in relation to how it's set up and administered. But if you're going to talk about Manus, it's not for that.

Senator McKIM: It has been in the past.

CHAIR: We've dealt with the former officer of the Border Force, because that is part of Mr Pezzullo's duties as departmental secretary, so we dealt with that. But if you're dealing with specific issues, we will leave that until outcome 1. We'll have an opening statement from Border Force, which may answer some of your questions before you ask them.

Senator McKIM: I doubt it, because they don't usually. But I do object to that.

CHAIR: Well, that's okay.

Senator McKIM: Trying to push a human rights calamity down the agenda.

CHAIR: Well, we don't need a statement, thanks, Senator McKim. We'll come to that, and you'll have plenty of time when we get on to that. No questions about the portfolio cross-border general corporate budget?

Senator McKIM: I have plenty of questions about those. I'm at a loss to understand where you're drawing the boundaries here. Can I ask questions about the contracts regarding Manus Island and Nauru?


Senator McKIM: I can't do that either?


Senator McKIM: It just doesn't suit you.

CHAIR: If we finish this—

Senator McKIM: The Border Force officers are here. I can see them sitting at the back of the room.

CHAIR: Senator, please! When I'm speaking, don't be rude and interrupt.

Senator McKIM: Well, they're here.

CHAIR: What I'm saying is, as soon as we finish this, and I think we're getting close, you can have as long as you like within the rules. We'll get on to that very shortly.

Senator McKIM: Can I just confirm who—

Senator PRATT: We're not all that close. I don't mind if Border Force appear.

CHAIR: You mightn't mind, but that's the rule.

Senator McKIM: Chair, on a point of order, then, if I have to: whose decision was that?

CHAIR: The committee's.

Senator PRATT: No, it was the chair's.

CHAIR: I said 'If the committee agrees', and nobody disagreed.

Senator McKIM: Well, I disagree.

CHAIR: Well, you're not a member of the committee.

Senator McKIM: I am a member of the committee.

CHAIR: Okay, well you weren't here when that happened. If you have any questions on this, Senator McKim, please ask them.

Senator McKIM: I'm objecting to the decision that you've made, Chair.

CHAIR: Your objection is noted.

Senator McKIM: I move:

That I be allowed to ask questions right now with regard to the human rights calamity caused by your government on Manus Island and Nauru.

CHAIR: I'll take that. All those in favour of that motion?

Senator McKIM: Aye.

Senator PRATT: Aye.

CHAIR: Two. All against? Three against. The motion is lost. Do you have questions on this?

Senator McKIM: I'd like the dissenting voices recorded, please, Chair, for the record. Thank you.

CHAIR: It's on Hansard, Senator McKim, so I guess it will be. Do you have questions on cross-portfolio?

Senator McKIM: Just to clarify, is your ruling that I am unable to ask any questions in relation to offshore detention on Manus Island and Nauru as part of these proceedings. Is that your ruling?

CHAIR: You can ask as many as you like when we get on to that section of the agenda.

Senator McKIM: Unbelievable. Can I ask questions about quarantine and AQIS?


Senator McKIM: I can't do that either?

CHAIR: If it's in a budgetary or corporate or cross-portfolio way, yes. If you were here earlier, Senator McKim, you would have understood this.

Senator McKIM: Can I ask questions about the US agreement to resettle people from Manus Island and Nauru in this part of—

CHAIR: No, that's not part of this.

Senator Fifield: This might be helpful, chair. I think you mentioned AQIS, Senator McKim. AQIS is in the agriculture portfolio.

CHAIR: That's true. Thanks, Senator Fifield.

Senator McKIM: But Border Force do deal with biosecurity issues, Minister, do they not?

CHAIR: You are really wasting the time of the committee. We have questions. I understand Senator Pratt has questions.

Senator McKIM: I have plenty of questions left, chair. I'm just astounded—

CHAIR: You've said that three times. I'm pleased you're astounded.

Senator McKIM: that you would attempt to cast a veil of secrecy over what is going on in Manus Island and Nauru.

CHAIR: There is no veil of secrecy. You'll have hours to ask that as soon as we get onto the right section of the agenda. I can't understand what you don't understand!

Senator McKIM: Okay. Do we have a chief medical officer at the moment, Mr Pezzullo?

Mr Pezzullo : We have someone acting in the role and we are currently undertaking a recruitment process. It's close to conclusion.

Senator McKIM: Thank you. And the person acting in the role is not a medical professional? Is that right? Not a doctor?

Mr Pezzullo : No, absolutely not. The first assistant secretary responsible for the health services administration function is a public servant, but she does not provide medical advice—no.

Senator McKIM: No, but the previous holder of that position actually was a medical professional, was he not? Dr Brayley?

Mr Pezzullo : And the future holder will be as well.

Senator McKIM: Okay. So, that's a guarantee that the future holder of that position—

Mr Pezzullo : Absolutely. It would be a bit odd to have a chief medical officer who wasn't a medical officer.

Senator McKIM: Well, you've got one acting in the role—

Mr Pezzullo : That's not a medical officer—

Senator McKIM: You've just given evidence that the person currently in the position, acting—

Mr Pezzullo : No. I said that—

Senator McKIM: is not a medical professional.

Mr Pezzullo : No. The first assistant secretary of the administrative division that provides health services—

Senator McKIM: These questions relate to the chief medical officer.

Mr Pezzullo : Correct. It is a different band 2 role.

Senator McKIM: I understand that. Just for clarity, in case we've had a communication breakdown: these questions relate to the CMO—the chief medical officer, okay?

Mr Pezzullo : Correct.

Senator McKIM: So, will the new chief medical officer be a doctor?

Mr Pezzullo : Yes.

Senator McKIM: Guaranteed?

Mr Pezzullo : A medical practitioner.

Senator McKIM: Yes, okay, a medical practitioner?

Mr Pezzullo : Absolutely.

Senator McKIM: But the acting chief medical officer is not?

Mr Pezzullo : No, that premise is wrong. We've never had anyone acting in the role of CMO who was not a doctor. It would be—

Senator McKIM: So who is acting in the role at the moment?

Mr Groves : There is nobody acting in the CMO role at the moment.

Senator McKIM: I'm sorry, didn't Mr Pezzullo give evidence a couple of minutes ago that there was?

Mr Groves : No. He said that there was a first assistant secretary who was heading up our health services and policy area, which is very closely aligned to and works closely with the CMO.

Senator McKIM: I understand that, but the roles have different functions, do they not?

Mr Groves : Correct.

Senator McKIM: And you have no-one acting in the role of CMO?

Mr Groves : Correct.

Senator McKIM: So who fulfils the functions that the CMO would fulfil if we had one?

Mr Groves : At the moment, any such issues are being looked after by the FAS of the health services and policy area—

Senator McKIM: The what, sorry? Did you say the FAS?

Mr Groves : Sorry, the first assistant secretary in charge of the health services—

Senator McKIM: Who is not a medical professional?

Mr Groves : Correct. But they have a number of medical officers who do work within that division, which looks after that function. She draws upon the advice of those officers, including a number of general practitioner doctors that we have. In addition to them we have nurses on staff, and dietitians, exercise physiologists and occupational therapists. Externally, we also rely on the advice of a number of providers, including companies that are contracted to provide those services onshore.

Senator McKIM: Thank you. But the position of CMO has a decision-making function, does it not?

Mr Pezzullo : No.

Senator McKIM: The CMO makes no decisions?

Mr Pezzullo : No.

Senator McKIM: Okay. So who makes the decisions? For example, if there is a request on the ground, inside the RPC, say, at Nauru, that someone should be—

Mr Pezzullo : Mr Chairman, I'll need guidance—

Senator McKIM: No, I'm asking you—

Mr Pezzullo : The chairman has made a ruling—

Senator McKIM: Well, I haven't finished my question yet.

Mr Pezzullo : Well, okay. I'll draw the chairman's attention to it in due course, then.

Senator McKIM: Great. So the question is: if there is a request or advice for a medivac from the RPC in Nauru, and that comes into the department here in Australia, who makes the decision about whether that request is acceded to or not?

Mr Pezzullo : Mr Chairman, would you like me to answer that now or would you prefer that I answer it under—

CHAIR: Is it a simple answer?

Mr Pezzullo : No.

Senator McKIM: You bet it's not!

CHAIR: Well, we'll deal with it later then, Senator McKim.

Senator McKIM: All right—

Mr Pezzullo : It arises under program 1.4.

Senator McKIM: Okay. In that case, Mr Pezzullo, I can't imagine why delay serves your purposes here in regard to what's going on on Manus Island and Nauru—

Mr Pezzullo : I'm just trying to—

CHAIR: That doesn't require comments—

Senator McKIM: But in regard to the chief medical officer, you expressed a view a few minutes ago—and I'll just paraphrase you here—and I understood you to say that it wouldn't be too long before we actually had a chief medical officer. So can you just update the committee on the process and where you're up to?

Mr Pezzullo : Mr Groves is running the process, so I'll just ask him.

Senator McKIM: Thanks.

Mr Groves : Senator, we conducted interviews; I think it was last week. We are in the process of confirming referee comments. Following that, we would be making an offer to the preferred candidate.

Senator McKIM: Mr Pezzullo, when you—

CHAIR: Sorry, Senator McKim, your time has finished. We can come back to you. I will now go to Senator Watt.

Senator WATT: Actually, if you want to cover off, Senator Pratt?

Senator PRATT: No, that's fine.

CHAIR: Oh, well, I go to the Labor Party.

Senator PRATT: We are very—

Senator WATT: 'Collegiate', I think is the word.

Senator PRATT: happy to—

CHAIR: But, Senator Pratt, I thought you just told me to go to—

Senator PRATT: I did. I was off. I misunderstood what Senator Watt had communicated to me before.

CHAIR: That's all right. I would always do you the courtesy, as deputy chair, to go to you first but I thought you had indicated that.

Senator PRATT: These things happen. I wanted to ask, with respect to ASIO, on page 14—

Mr Pezzullo : Sorry? Page 14 of—

Senator PRATT: No, I'm just talking to myself right now.

Mr Pezzullo : Oh, I see.

Senator PRATT: When will ASIO move over to the portfolio?

Mr Pezzullo : All I can really do is draw attention to the minister's advice earlier, which is to the effect—if I can paraphrase you, Minister—that the PJCIS, having held its hearings, is considering the relevant legislation. I think, Minister, you said that it is intending to report shortly.

Senator Fifield: That's right. It is scheduled to report in February, so that means it should report shortly. The relevant legislation was introduced into the House of Representatives on 7 September, referred to—

Senator PRATT: Will it, though?

Senator Fifield: the PJCIS on the eighth. So it needs the—

Senator PRATT: Will it report this month?

Senator Fifield: That's the time frame that was set for the committee to report.

Senator PRATT: Okay. As I understand it, there are some 17 pieces of legislation that will need to be amended—17 acts—to complete arrangements of this?

Mr Pezzullo : I think you will find that the package of legislation or bills that the Prime Minister introduced both relate to the transference of ASIO to Home Affairs but also relate—I suspect this is where the balance of the package of bills that you're alluding to, and Ms Noble will assist me here—to changing the profile and shape of the Attorney-General's role and moving certain oversight bodies in under the jurisdiction of the Attorney-General, not all of which—in fact very few of—sorry, I will rephrase: some of which have to do with oversight of ASIO but they also pertain more generally to the integrity role of the Attorney-General. Ms Noble, is it the case that it's 17 pieces of legislation that are in play in the legislation introduced on 7 December?

Ms Noble : I think it is only four, Secretary.

Mr Pezzullo : That pertain to ASIO, though?

Ms Noble : That's right. So it’s the Anti-Money Laundering and Counter-Terrorism Financing Act and the Intelligence Services Act that pertain to the transfer of ASIO into the Home Affairs portfolio. There are another two acts proposed to be amended by the Home Affairs legislation: the Independent National Security Legislation Monitor Act and the Inspector-General of Intelligence and Security Act, and those two act amendments pertain to the changing role of the Attorney-General with respect to oversight.

Senator PRATT: So, as I understand it, Mr McKinnon wrote to the secretary of the intelligence committee last week to correct previous evidence, and he says that 37 acts need to be amended to effect changes set out in the machinery of government—

Senator Fifield: Sorry, Senator Pratt, who wrote to did you say?

Senator PRATT: Mr McKinnon. The secretary of the intelligence committee.

Ms Noble : Yes. Mr McKinnon is referring to a second issue, which is the usual practice that, when machinery-of-government changes occur, the transfer of functions, if you will, are dealt with by administrative orders and substituted reference orders. It is usual practice then to, over time, move those administrative issues from substituted reference orders into the primary legislation. So what Mr McKinnon is referring to is the number of things sitting in substituted reference orders that will need to be moved over time into primary legislation as is the usual practice.

Senator PRATT: Why isn't that being done now?

Ms Noble : It's just a matter of process and timing. It may be that, if we can get the relevant legislation prepared and drafted by the Office of Parliamentary Counsel, that can happen fairly quickly.

Mr Pezzullo : Is this a question of SROs, Ms Noble?

Ms Noble : Yes, it is.

Mr Pezzullo : SROs are a well-understood technique governments—

Senator PRATT: What is an SRO?

Mr Pezzullo : A substituted reference order. In the world of admin law, they are very well known. They flow from the Acts Interpretation Act 1901, and it allows—

Senator PRATT: All right. You can spare me the full explanation. Thank you.

Mr Pezzullo : It is rather material, but perhaps some other time.

Senator PRATT: Thank you. I'm concerned that, months after this announcement and the appointment of the new minister, we haven't yet seen new arrangements. Is that of concern to the department—that the legislation has not yet passed?

Mr Pezzullo : That's a factually fraught premise in your question. The new arrangements are given effect in any machinery-of-government change—and I've been around to see them under both political parties—through administrative arrangements orders, AAOs, that are signed into effect by the Governor-General on the advice of the Prime Minister of the day. Underneath AAOs, you get a whole series of instruments, regulations, SROs—and you can tell I'm champing at the bit to explain the provenance of SROs, which goes back to 1901, but I will spare you because you have so asked me—so, legally, short of amending primary legislation, it's within the Governor-General's prerogative, as it were, to change the shape of government, on advice, which of course ultimately is always a decision of the Prime Minister. But the formality is that it's all done in Executive Council. What Executive Council can't do is, obviously, thwart, affect, undermine the will of the parliament by affecting primary legislation. The—I think—four acts of parliament that Ms Noble mentioned or enumerated are the acts of parliament that can only be amended by an expression of the will of the parliament through action in both houses. It's that very specific set of amendments that pertain to shifting the oversight responsibilities for ASIO across from the Attorney-General to the Minister for Home Affairs, save for the ongoing role that the Attorney-General will have in signing authorisations, warrants and giving authority for special intelligence operations. Only with the passage of that legislation can ASIO come into the portfolio.

Senator PRATT: That's right. In relation to the total number of acts that need amendment, is it 17 or 37? Why is the word 'about' still being used?

Mr Pezzullo : You said the word 'about'. For the purposes of Hansard: you put it in quotation marks using the well-worn technique of rabbit ears. I'm not sure where the 'about' reference comes from.

Senator PRATT: Mr McKinnon himself said he now believes that about 37 acts will need to be amended.

Mr Pezzullo : I think that's probably a question best posed to Mr McKinnon. He is a senior officer of the Prime Minister's department.

Senator PRATT: How many acts do you think need to be amended?

Mr Pezzullo : Mr McKinnon is leading the relevant task force, so I'll defer to his leadership on this question.

Senator PRATT: So you're telling me it's not your job to know but it's his job to know and he doesn't—

Mr Pezzullo : It's his job to lead.

CHAIR: If you took it on notice and asked Mr McKinnon, that might help Senator Pratt.

Mr Pezzullo : I'm happy to take it on notice and put it to Prime Minister and Cabinet.

Senator PRATT: So it's not your job to know how many acts?

Mr Pezzullo : It's our job to implement.

Senator PRATT: Once the changes have passed. Okay. The government has spoken about two phases of implementing changes. It sounds to me, from what you've explained, that there are three or even four phases, SROs being one of them.

Mr Pezzullo : No. I'll go back to the evidence I gave to Senator Carr. In terms of constructing the portfolio, the prime moves were made on 20 December, by decisions taken in the Executive Council, where the Governor-General signed the relevant documentation. That created the vast majority of the portfolio. It created the Department of Home Affairs. It appointed the secretary. It appointed ministers as part of the general reshuffle that also occurred at that time. In machinery-of-government terms, it also brought in relevant elements from the Prime Minister's department, the Department of Social Services, the department of infrastructure and regional development, and the Attorney-General's Department. It also moved, by way of AAO action—that is to say an Administrative Arrangements Order—the Australian Federal Police, AUSTRAC and ACIC, and Border Force authority came in with the Department of Home Affairs. That was phase 1.

Phase 2, to complete the construction, the architecture, the scaffolding or the system of the portfolio, is to bring ASIO in properly on a lawful basis with the split of responsibilities as between the minister and the Attorney-General specified in the primary legislation. Then, I think, as Ms Noble indicated earlier, some residual elements of Attorney-General's. I think Mr Groves has given us all an assurance that the collegiate calculating action will be done by budget, and that means that some corporate areas will come in from a number of those departments. In terms of structure, that's it; it's done.

Senator PRATT: What of the concerns that our national security agencies have some legal limbo around them, in that they have a responsible minister and a responsible department but things like the SROs et cetera have not yet been completed?

Mr Pezzullo : What's the question that you're asking me? That such agencies have such concerns or that you've heard rumours that they have concerns?

Senator PRATT: We have those concerns, and I want to know how you seek to address them?

Mr Pezzullo : If the committee has concerns, as opposed to some Loch Ness reference to apocryphal concerns held by agencies, all I can assure you is, based on the evidence I've already given you, that the correspondence that goes to the Governor-General and the Executive Council is meticulously constructed. There is no question of the legal authority and the basis for the changes that were effected on 20 December. There's no question that the legislation that's before the parliament, when it's fully considered and passed, will provide an appropriate legal basis for the transference of the rest of the functions. I don't understand any concern about limbo, legal or otherwise.

Senator PRATT: A good example of that is that the retention of the warrant issuing power isn't included in the Home Affairs bill now before parliament. We've had the Prime Minister seek to reassure us—that the public and security agencies—that all power is not concentrated in the Minister for Home Affairs, and that the Attorney-General retained the power to approve warrants for ASIO. But my understanding is that that issuing power isn't in the Home Affairs bill before parliament and, therefore, it will transfer the power to the Home Affairs minister.

Mr Pezzullo : Both the pieces of legislation that will eventually be passed by this parliament—

CHAIR: You hope.

Mr Pezzullo : Indeed. I was about to say, 'subject, of course, to the will of the parliament'—thank you, Mr Chairman. Combined with the relevant subordinate instruments, including SROs, in their totality they will create the appropriate legal basis to give effect to the Prime Minister's decision—subject of course to the will of the parliament, just in case I didn't make that clear.

CHAIR: Senator Pratt, your time's finished. We'll come back to you. Senator Molan.

Senator MOLAN: Thank you, Chair. You quoted a secretary in your opening statement in observations that you made in relation to your visit to the UK. That was always one of the most interesting aspects of the formation of this organisation between examples we saw around the world of pulling these powers together. The US and the UK were two that we looked at. Would you consider where we've ended up to be a hybrid of the US and the UK? Is it unique? Will there be a natural review period at some stage after we bring ASIO in? The place is complete, it has a running period and then is there a natural review period in which we can all look at how things are going?

Mr Pezzullo : Perhaps dealing with the latter part of your question first. I am not aware, other than just in the normal practice of good public administration, that the government's made any announcement about a gateway or a milestone review period—Ms Noble will remind me otherwise. I think it's good public administration practice to occasionally review particularly significant changes that go to architecture and the fundamental apparatus. That said, it'd be helpful if we're also given a bit of time to consolidate and to come together as a team, build our culture and take advantage of some of those synergies that I mentioned earlier. It's always been the gift—and I don't want to suggest otherwise—of the Prime Minister of the day to make amendments to administrative arrangements. But it would be certainly something—not that the Public Service can ever request this—where a degree of space and a bit of lapsed time would be helpful before yet further reviews and adjustments are made. But that's a matter for future parliaments, no doubt, and future administrations.

On the question of where we've ended up, I think that, as with all these things, whether it's our constitutional arrangements or our parliamentary arrangements or our bureaucratic arrangements, we tend to end up with—hybrids is occasionally an ugly word—distinctly Australian systems. If you were to press me, senator—which I know occasionally you have a reputation for doing, so I will just get ahead of that—I would say that for constitutional, legal and historical reasons probably the greater affinity is with the British system. We have ministers who sit in the parliament. We have the doctrine of ministerial responsibility. Cabinet ministers are given a mandate to supervise significant areas of public administration—be it the defence minister, the home affairs minister now or the foreign minister, to take three examples. That is quite distinct, of course, from US practice, where the Cabinet Secretary is a chief executive of the department appointed by the President outside of the Congress. Just that issue alone means that you've got quite a different governance arrangement necessarily that flows.

So I think in terms of our—what's the best word here?—spiritual affinity with systems of British public administration it is probably the closest. That said, we're different there as well. We're a federation; the UK is not. There are certain functions in the UK that are devolved—for instance, Scotland. But other matters are dealt with differently in England and Wales. For many years the Home Office, for instance, oversaw prisons. That's no longer the case; the British have decided to take prisons out. I can't quite remember when. Of course in Australia prisons are a state and territory original jurisdictional question.

Senator MOLAN: Are they pushing them down to the county level, or something like that?

Mr Pezzullo : I'm not quite sure what the British practice is. I will have to take that on notice. We're obviously a federation. That has an important bearing on this question in other respects. Through the consolidation of powers that occurred in 1901, a whole lot of residual constitutional powers were retained by the then colonies as they became states. Policing, public safety and good order on the streets are state responsibilities. That is not the case in Britain, where they have a different set of arrangements. We have a written constitution; they don't. I could go on. So whilst the affinity is probably most closely with the British system—and the Prime Minister has spoken quite directly in those terms, as has the Minister for Home Affairs—there are also distinctly and uniquely Australian provisions that I would contend make it an Australian model with some British foundations, because our system of public administration is essentially historically a British system.

Senator MOLAN: I will certainly save some questions for the emergency management people when they come, but the one that strikes me is the prominence of FEMA in the US. If you can add something now, I would appreciate it, but I'm happy to wait until emergency management this afternoon.

Mr Pezzullo : Following the chairman's guidance, I would prefer to answer that under programs.

Senator MOLAN: Thank you.

CHAIR: Senator Pratt, or Senator Watt? Which one?

Senator WATT: I might have a go this time. I obviously have not been here for this morning, but I've been trying to follow the proceedings as much as I can. Hopefully I'm not going to cover any ground we've already covered. Can we just take a step back again to some of the rationale around the merging of functions under a new department. You will be familiar that on 21 February Minister Dutton gave a speech at the National Press Club and said that Australia has been fortunate to date not to suffer at home the mass casualty attacks we have seen elsewhere, and that the efficacy of our agencies under the arrangements that have been in place for decades has been noted by successive Australian governments—Labor and Liberal. What was it, then, that led this current government to jettison existing and highly successful arrangements to establish this new megaportfolio under Minister Dutton?

Mr Pezzullo : The premise of your question, that anything's been jettisoned, is false. As I said in my opening statement, this is about building on those well-understood, well-practised coordination arrangements. All I can really do in my evidence is refer you to the Prime Minister's comments, and indeed Mr Dutton's comments, that neither of those leaders, neither the Prime Minister nor the home affairs minister in particular, want to be facing the Australian people after an incident, reacting in the aftermath of an incident, perhaps in responding to a royal commission, and saying that we didn't keep our structures, functions and operating models constantly under review to take advantage of new technology and the ability to bring different functions together to achieve synergies, over and above well-practised, well-respected, well-entrenched, ongoing and continuing operational coordination arrangements that will not be jettisoned. So your question, if I can respectfully say so, is falsely premised.

Senator WATT: It's correct, though, that the Howard government considered such an arrangement and decided against it?

CHAIR: I don't know. Do you know that?

Mr Pezzullo : As I recall, I think that's right.

Senator Fifield: It's a matter of fact that these arrangements didn't occur then and they're occurring now.

Senator WATT: And under Prime Minister Rudd similar arrangements were considered, floated and decided against?

Senator Fifield: All I can do is observe that those arrangements didn't occur then and they are occurring now. As the secretary has indicated, these arrangements of bringing national security and intelligence and emergency management together are part of an evolution. It's as a result of keeping arrangements under constant review to see if they can be improved upon, and the decision of government was that this would be something that was prudent to do.

Senator WATT: And, again, similar arrangements were considered under Prime Minister Gillard, and even under Prime Minister Abbott not too long ago, but they were not proceeded with—that's correct?

Senator Fifield: I can't speak to what reviews did or didn't occur under previous administrations, but what I can say is what the decision of this government is. I think, as the secretary indicated, this is a decision that has been taken coolly and calmly after serious review and reflection. This isn't a decision that has been taken in response to a crisis, and I think it's good that we're taking these steps to enhance national security and intelligence arrangements after reflection, and not in response to a critical event where subsequent review would lead people to think: 'Gee, this should have occurred before.'

Senator WATT: I hear what you say about not necessarily being able to speak to what happened under the previous administrations. But under this administration, the Turnbull administration, in 2016 and 2017 Mr L'Estrange and Mr Merchant conducted a review of the Australian intelligence community at the request of Mr Turnbull, and the terms of reference of that review specifically included 'whether the AIC is structured appropriately, including in ensuring effective coordination and contestability'. That review was wideranging and drew on the experience of many people, including the intelligence community, and its report, which was released last year, did not recommend the creation of a home affairs department or anything of that kind, but it's happening anyway. Why were the recommendations of that review not followed, or gone beyond?

Senator Fifield: I'll let the secretary speak to that. He'll be more closely acquainted with that particular body of work.

Mr Pezzullo : Thank you, Minister. The L'Estrange-Merchant review, as it's called, which is a periodic review, an independent review of our intelligence arrangements, related to a close area but not the same area. Intelligence arrangements are not the same as response arrangements, so they were not mandated, not asked, to look into how you respond to domestic security and law enforcement challenges—although there are obviously significant overlaps in some regards. That review reported on the question of the configuration and the construction of our intelligence community. There are some overlaps. ASIO, for instance, is in the national intelligence community and it will be in this portfolio, subject to legislation.

The so-called L'Estrange-Merchant review also recommended that, because you keep these things under constant review, a number of non-traditional intelligence functions—and this somewhat speaks against the premise of your line of questioning—be brought into the purview of the national intelligence community. Why? Because there is data that you can exploit in areas such as criminal intelligence, border intelligence and financial transaction intelligence that have never formally been part of the AIC. They recommended that these functions be put into a new construct, a new apparatus, to be known as the national intelligence community, which will include those functions to be headed up by a director-general of national intelligence. Their job will be to exploit those previously untapped data sources and insights for intelligence purposes.

My department—leaving aside ASIO, which exists in both worlds—is then acting on the threat intelligence that comes from the intelligence community. We think about your risk settings. What risk are you willing to tolerate that a plane is going to be blown out of the sky or that there is going to be a mass casualty attack or that severe weather events become more persistent and require an emergency management response? That is not the responsibility of the intelligence community to advise on. Their job is to advise you on the threat. What you do to respond to those threats is principally a function in our security arrangements now of the defence department, foreign affairs department and now the home affairs department. I'm not overly surprised that that report did not have anything to say about the construction of a home affairs portfolio.

Senator WATT: You probably saw an article in The Saturday Paper in the weekend just gone by, 24 February. If you haven't seen it, I have copies here. In that article—

Mr Pezzullo : I'm not a particularly avid reader, but it did happen to pass my notice.

Senator WATT: The Saturday Paper is not the first thing you look at on a Saturday?

Mr Pezzullo : It's certainly not the first thing I look like on a Saturday.

Senator WATT: It has a lot to say by your department.

Mr Pezzullo : They seem to have an unhealthy obsession, but it's not the first thing I look at.

Senator WATT: I presume that you have seen this article though.

Mr Pezzullo : Yes.

Senator WATT: You will have seen that Karen Middleton had a story in there about a secret speech that the former Attorney-General Senator Brandis gave to ASIO just a day before he left parliament earlier this month. She details in that article the warning that Senator Brandis gave to ASIO about his views of this new megadepartment and the dangers the new arrangements may pose to ASIO's independence. I know that there have already been some questions this morning trying to pin this down, but I have a couple that I don't think have been asked. What assurance can you provide that the role of ASIO will not be altered when it's eventually shifted from an independent agency within the Attorney-General's Department to its new place within the Home Affairs megaministry?

CHAIR: I think that has been answered, hasn't it?

Senator WATT: I don't think anyone has asked for those sorts of assurances.

CHAIR: I'm pretty sure Senator Carr did. I could be wrong, but—

Senator WATT: There have been questions about directions and things like that, but not a more general question like that.

CHAIR: If you want to ask it again, that's fine, but we are running out of time.

Senator WATT: I would like to ask it.

Mr Pezzullo : There are two parts to my answer that respond to both parts of your question. I've seen that report. I don't have anything to say other than to advise this committee that Mr Brandis is currently doing his pre-posting consultations and he and I had a very good discussion on Friday. He's seeking instructions and guidance on performing the role of high commissioner. None of those issues came up, so I find that of interest. If he has concerns, I'm sure that he would himself raise those publicly.

Senator WATT: So he raised them with ASIO but not with you.

Mr Pezzullo : I don't know what he raised with ASIO. Ms Middleton seems to think that he did. You should ask the former Attorney-General if he's willing to state any of those concerns.

Senator WATT: I never found him very forthcoming when I asked him questions in the past.

Mr Pezzullo : He's a high commissioner now, so he may not choose to edify your question with a response, but that's a matter for him. As I said, he didn't raise any of those concerns with me when we met on Friday. One point too is it's this parliament that will put in place the governance arrangements pertaining to ASIO. Ministers and senior officials will conform with those requirements. You set the laws. The laws that you set will be the rules that we follow. It's not for me to give you an assurance about how ASIO will be managed under the law because you set the laws.

Senator WATT: I have one last question on this. I take it from the answers you've already given on this topic today that there will be no attempt to remove the long-standing protections of ASIO in the ASIO Act that keep the organisation under the control of its director-general and to preclude any departmental secretary from giving ASIO instructions.

CHAIR: That is a matter for the minister, I would have thought.

Senator Fifield: It is not proposed that there be a change to that effect.

Senator McKIM: I want to finish the line of questioning I was engaged in regarding the Chief Medical Officer. Mr Groves, did you give a specific timeframe for the appointment of a new CMO?

Mr Groves : No. I can confirm that I conducted the interviews on 20 February. We are going through the process as quickly as we can to try to finalise it. Obviously, it will also be dependent upon when the successful candidate is able to vacate their current job and join us. But we are certainly pushing as quickly as we can.

Senator McKIM: Who is currently the acting Chief Medical Officer?

Mr Groves : I think I answered this question before. There is nobody acting in the Chief Medical Officer—

Senator McKIM: These are doctors.

Mr Groves : Yes, we have—

Senator McKIM: I understand. I heard your answer before. Who is fulfilling the functions of the Chief Medical Officer at the moment?

Mr Groves : The functions—

Mr Pezzullo : It's a collective of doctors, is it?

Mr Groves : There are a number of doctors who work within the Health Services and Policy division. The CMO is principally tasked with looking across setting an overall medical framework for the department across all of its functions.

Senator McKIM: Who is doing that?

Mr Groves : At the moment that is still being administered by the first assistant secretary of the Health Services and Policy area.

Mr Pezzullo : But not in a clinical sense, surely.

Mr Groves : No, not in a clinical sense. But we have doctors who are providing advice to that—

Senator McKIM: Why do we need a Chief Medical Officer then, if everything is just going so swimmingly without one?

Mr Groves : I think we are looking for a Chief Medical Officer to provide leadership in that space. Doctor Brayley provided that and we are looking at filling the position as quickly as we can.

Mr Pezzullo : I can perhaps add to that. It is an astute observation. If it is being done by a collective, Ms Hampton, as the first assistant secretary does not proffer medical advice—

Senator McKIM: She can't.

Mr Pezzullo : She can't and she doesn't pretend to. She manages, for want of a better phrase, a collective of doctors. Let's for the moment just call them a collective. Is that a sustainable position? No. She has a day job to do, which is to administer, like a hospital administrator, contracts and the rest of it that ensure meals are being provided and the linen is being changed in the hospitals. It does not mean they are in charge of the surgery. My personal preference, and I guess I have a say in this because I'm the secretary, is that I would like to put in place an enduring arrangement where a dedicated band 2 officer is employed—they are employed in a medical specialty, aren't they?

Mr Groves : Yes, a medical officer 6.

Mr Pezzullo : A medical officer 6—so, a FAS equivalent, a band 2 equivalent, who can take that role on full time to manage the collective of health advising—is put in place to take the strain off the administrator. But she does not provide medical advice and she is very clear on her role.

Senator McKIM: As we have already agreed, she is not able to.

Mr Pezzullo : Yes indeed.

Senator McKIM: Is it intended that any functions of the CMO position be changed in any way from what they were when Dr Brayley held that position?

Mr Pezzullo : The functions are to provide clinical advice, ultimately to me, on the overall system of medical services that we provide. I know you have an interest both in offshore and onshore and you have anticipated under program 1.4 that we will be speaking about health transference issues. That function was the function that Dr Brayley performed and it will be the function that the incoming CMO will perform.

Senator McKIM: Okay, so that function is not changing. Are there any other functions that were attached to the position when Dr Brayley held it that will be different?

Mr Pezzullo : I will need to give it some more detailed thought, and obviously I want to engage with—

Senator McKIM: You must know what the functions are because you're interviewing for the position. You must know what the functions of the position are.

Mr Pezzullo : We are interviewing for a set of capabilities and skills. What I was about to say before than interjection is that, now that we are Home Affairs, providing me and the rest of both the departmental leadership and also potentially the portfolio leadership with advice on medical issues as they pertain to our new responsibilities might also come into scope. So, I have a broad idea of the scope of the job I am recruiting for, by definition, but I would like the occupant of the position to have a degree of agency and empowerment themselves. As they get across the broad portfolio, which isn't limited any longer, for reasons you all understand, to immigration and refugee issues, although they are vitally important. It might well be that the content will broaden, if not the clinical advising role.

Senator McKIM: I will phrase the question slightly differently. Will there be any functions that will be removed from that position?

Mr Pezzullo : No.

Senator McKIM: Okay.

Mr Pezzullo : The clinical advising role is the heart and soul of the job, and it will not change.

Senator McKIM: I now want to ask some questions about the privatisation of access to Australia that the government is engaged in. Firstly, when was that decision made, and by whom?

Mr Pezzullo : I am not quite following the premise, when you say 'privatisation of access to Australia'.

Senator McKIM: Yes, well you are going to privatise what you call your visa business.

Mr Pezzullo : I see.

Senator McKIM: And I call access to our country.

Mr Pezzullo : I understand the role. I perform it every day and I oversee it every day. Mr Chairman, I will take your guidance. It does start to get into programmatic detail—

CHAIR: What was the question?

Mr Pezzullo : I think I understand the question but perhaps the senator is best placed to explain where he is going.

CHAIR: Was it a general—

Senator McKIM: I flagged as a courtesy to the committee chair that I wanted to ask some questions about what the department calls the privatisation Australia's visa business.

CHAIR: That would come under—

Mr Pezzullo : Outcome 2.3.

Senator McKIM: It is a classic cross-portfolio issue, because you have allowed questions about the move from DIBP to Home Affairs.

CHAIR: How is it cross-portfolio?

Senator McKIM: Because it pertains to the corporate affairs of this department.

CHAIR: I think you want to inquire about how it will operate, which will be under 2.3 Visas.

Senator McKIM: It is a corporate matter. We are in 'cross-portfolio corporate'.

CHAIR: I don't think it is. We are almost onto the next one, Border Protection, as soon as we finish questions on cross-portfolio. The committee hopes—

Senator McKIM: You are ruling that one out of order, Chair, are you?

CHAIR: For the time being—not out of order but delayed until the appropriate time.

Senator McKIM: I have some other questions that I believe will be in this section. What has the department spent on advertising?

CHAIR: That is a very pertinent one here.

Mr Pezzullo : Mr Groves, advertising—and can you please break it down in terms of what campaigns and what costs?

Mr Groves : I don't have that detail with me. I will check if any of my colleagues do, but I don't have information specifically on advertising.

Mr Pezzullo : Can I be clear: does that pertain to advertising for recruitment purposes and/or more general public communications?

Senator McKIM: Both, including internationally, in terms of the advertising that is done around what you call Operation Sovereign Borders, for example.

Mr Pezzullo : We will see if we can break it down for you.

Senator McKIM: Given that you are taking that on notice could you please provide the last financial years, and if you have a year to date?

Mr Pezzullo : We will take that on notice.

Senator McKIM: The current financial year. Chair, to shift things along I will seek your guidance. Questions about turn-backs under Operation Sovereign Borders?

CHAIR: That is the next one, which we are almost onto.

Senator McKIM: Citizenship matters?

CHAIR: That is outcome 2.

Mr Pezzullo : 2.1.

Senator McKIM: So that is not now. I am just making sure under you new rulings, Chair, that I am not missing the opportunity to ask anything. Legacy caseload questions come later, I presume?

Mr Pezzullo : 1.3.

Senator McKIM: Offshore/onshore immigration detention, later. Given the new rulings I will have to wait my turn for those.

Senator WATT: If we can just go back to the rationale for some of these changes and the article I was referring to in a Saturday paper. Mr Pezzullo, the article also refers to a speech that you gave last year. I think we've talked about this before—

Mr Pezzullo : Senator McKim asked me questions last time.

Senator WATT: I had some recollection, but I couldn't remember who had asked.

Mr Pezzullo : He has left the room, I'm not sure if—

Senator WATT: Let's hope they are different questions. In the speech you gave last year about the role of the new department, I think it's fair to say that you called for an end to the paradigm that's been place in Australia for some time, and you flagged the likelihood of increased surveillance of the Australian population.

Mr Pezzullo : I most certainly did not.

Senator WATT: Well, one quote—

Mr Pezzullo : I most certainly did not.

Senator WATT: One quote from that speech is that:

… the state has to embed itself invisibly into global networks and supply chains, and the virtual realm, in a seamless and largely invisible fashion, intervening on the basis of intelligence and risk settings. Increasingly, at super scale and at very high volumes.

So what exactly do you mean by that? In what way does the state have to embed itself invisibly in a largely invisible fashion?

Mr Pezzullo : Through the large-scale data exploitation systems that I referred to in my opening statement. But any—as you described it—surveillance of Australian citizens will only ever be done under the rules set by this parliament.

Senator WATT: I'm not saying that it would be occurring outside those rules.

Mr Pezzullo : Thank you.

Senator WATT: But I think any reasonable reader of that—

Mr Pezzullo : I think the so-called secret speech thesis of Ms Middleton—it got quite a lot of space in the paper—suggested to the contrary. You started your question by referring back to that article, so you've thrown me, Senator.

Senator WATT: The article cites the speech you gave in October last year, in which you made, among other things, that statement that I've quoted back to you.

Mr Pezzullo : And you then drew an inference that that meant mass surveillance of the Australian population.

Senator WATT: I didn't say mass surveillance, I said increased surveillance.

Mr Pezzullo : Well, increased, mass, enhanced—any surveillance of citizens is always strictly done in accordance—

Senator PRATT: That doesn't mean it doesn't increase.

Mr Pezzullo : with the laws passed by this parliament.

Senator WATT: I have not at any point alleged that you or your officers are about to undertake surveillance outside the rules set by the parliament. But what I'm trying to get at is what you mean, in making those comments—that the state has to embed itself invisibly into global networks in a largely invisible fashion, intervening on the basis of intelligence and risk settings, and increasingly at super scale and at very high volumes.

Mr Pezzullo : Yes.

Senator WATT: I read that as suggesting you expect that there will be increased surveillance of the Australian population in the future.

Mr Pezzullo : No, you shouldn't.

CHAIR: I think the reference is to global—

Mr Pezzullo : I don't see how you can draw that reference. I'll give you an example—and I laid this out in the last page of my opening statement. I'll use an example to flesh it out. You need to use highly sophisticated techniques—that shouldn't properly be described in an open forum such as this—to undertake data exploitation, pattern analysis, say, of what's happening in the dark web. You're not surveilling the Australian population. You're surveilling, potentially, abhorrent and obnoxious practices undertaken by child exploitation networks to try to separate themselves off from being monitored through the internet; that's why they're in the dark web. Now, Australians may or may not be caught up in some of those operations, that is true, because, regrettably, some of our fellow citizens are entangled in abhorrent practices undertaken by global child exploitation networks.

How you get to the dark web, how you find it in the first place, how you monitor it at scale, how you get detection, using artificial intelligence and other data techniques, so that you can then go after the child exploitation groups that are exploiting children in completely abhorrent ways, is something that you need to do (a) at scale; and (b) in very quick time, particularly if there are real-time risks that you're trying to manage. And (c) you want to do it invisibly, for this reason: because you don't want those child exploitation gangs, child paedophile gangs, to know how you go about detecting them. If that requires invisible work, I sit before you guilty as charged.

Senator WATT: Beyond child exploitation, obviously one of the purposes of undertaking surveillance on some members of the Australian population is to prevent acts of terrorism.

Mr Pezzullo : Well, no-one surveils the Australian population. Agencies engage in intelligence activities in order to thwart mass casualty attacks, or protect children online. If Australians—against, frankly, the better judgment of all of their fellow citizens—engage in abhorrent, dangerous, risky, threatening behaviour; if they're caught up in those practices, then they'll be dealt with under the law. The object isn't to surveil the population.

Senator WATT: I'm not saying that. But you can't—

Mr Pezzullo : I'm sorry, Senator, you keep saying—the inference you draw from the august journal known as The Saturday Paper is that the plan—

Senator WATT: You didn't like that article, did you?

Mr Pezzullo : No, no; it gives me a platform to describe what we're doing in the best way that I can, in an unclassified forum, to help this committee understand both the gravity of the threats that we face and also the very strong values that we bring in dealing with those threats, because we, like you, are fellow Australians who cherish our liberty and we don't want to be surveilled by the state. I don't want to be surveilled by the state.

You agreed earlier that you are not of the view—and I'm glad that you're not of the view—that anything we intend to do will be beyond law—thank you; I appreciate that affirmation from you, Senator—and everything that we do in relation to affecting the rights, liberties and freedoms of Australian citizens will be done under law. If we set that aside, because I think you and I have a joint view about the importance of that, then everything that we'll be doing will be against our targets. Regrettably, sometimes citizens get caught up in these operations, be it money laundering, child exploitation, the proliferation of weapons of mass destruction or transnational crime. I could go on.

Senator WATT: Do you expect, because of that range of risks facing the Australian community, it is likely that, among other things, we're likely to see an increase in the amount of surveillance of members of the Australian community?

Mr Pezzullo : We're likely to see an enhanced investment in intelligence and data capabilities, which will have built into them—I'm sure, because the parliament will require us to build them in, as they should—safeguards to protect the privacy of Australian citizens and their liberty.

Senator WATT: So the answer to my question is, 'Yes, with safeguards.'

Mr Pezzullo : No, it's not. The investment will be in intelligence and data capabilities. To the extent that that does result in an enhanced ability to monitor transactions that, inevitably, because of the way that globalisation works, potentially involves Australian citizens and their liberties, I'm sure this parliament will require safeguards to be built in. And I would encourage you to require those safeguards to be built in.

Senator WATT: This question might be best directed at Senator Fifield. Senator Fifield, you were probably in the chamber for the valedictory speech from Senator Brandis.

Senator Fifield: Not for all of it.

Senator WATT: It went on for a while.

Senator Fifield: I arrived late from attending a state funeral in Melbourne so I wasn't there for all of it.

Senator WATT: Nevertheless, you've probably seen the reports of some of the aspects of his speech, including a statement that says:

It is for the Attorney-General always to defend the rule of law, sometimes from political colleagues who fail to understand it or are impatient of the limitations it may impose upon executive power.

Are you aware of any of your or Senator Brandis's political colleagues who fail to understand the rule of law?

Senator Fifield: No.

Senator WATT: Are you aware of any of your political colleagues who are impatient about the limitations the rule of law imposes upon executive power?

Senator Fifield: No.

Senator WATT: Why would Senator Brandis have made those sorts of comments?

Mr Pezzullo : Mr Brandis, isn't it?

Senator Fifield: His Excellency the Hon. George Brandis QC.

Senator WATT: I might just stick with Mr Brandis.

Mr Pezzullo : I stand corrected, Minister; thank you.

Senator WATT: So Mr Brandis is wrong.

Senator Fifield: You asked me about my awareness, in terms of colleagues, and I've answered you in terms of my awareness of colleagues. In terms of the knowledge of other colleagues, that's a matter for them.

Senator WATT: So for Mr Brandis to say that he has political colleagues who fail to understand the rule of law or are impatient of limitations, he's wrong.

CHAIR: Senator, you're a lawyer; you know you can't expect this minister to answer for Senator Brandis.

Senator WATT: In your view, in your experience—

Senator Fifield: I can't speak to colleagues in all groupings in the parliament but I can speak in relation to my Liberal and National colleagues, and all of them have a deep, fundamental and abiding commitment to the rule of law.

CHAIR: Hear, hear!

Senator WATT: I think I'm out of time.

CHAIR: Yes, you are. I think it's only the Labor Party now that have cross-portfolio—

Senator PRATT: Yes, we do still have further questions.

CHAIR: Bearing in mind that the committee had set 12.45 to finish, we'll go as long as you have questions, as you know.

Senator PRATT: I wanted to ask Mr Pezzullo, as Secretary of the Department of Home Affairs, as opposed to your previous department, are you authorised to use force?

Mr Pezzullo : Me personally? No. But I wasn't in my previous role.

Senator PRATT: I wouldn't have expected you to be in your previous role. Have you undergone any use-of-force training, should security circumstances ever allow it?

Mr Pezzullo : No.

Senator PRATT: So you haven't—

Senator MOLAN: He sometimes wishes he could at Senate estimates!

Senator Fifield: The secretary, just by sheer force of personality, is able to effect outcomes on a number of occasions!

Mr Pezzullo : In the interests of being abundantly cautious and accurate: I did, as a member of the Australian Army Reserve in the late eighties and early nineties, undergo infantry training. I didn't reach the exalted heights that Senator Molan reached in my military career; I was a lowly infantry platoon commander. But, yes, at that time I was trained on weapons of all sorts.

Senator PRATT: So you don't have a gun in your possession?

Mr Pezzullo : No.

Senator PRATT: I wouldn't have thought so. So has your security status changed in any way?

Mr Pezzullo : What do you mean by my security status?

Senator PRATT: In terms of any potential risk that you and others in the Department of Home Affairs might face?

Mr Pezzullo : Do you think that we'd be comfortable or wise in canvassing those issues publicly?

Senator PRATT: I'm putting the question and you can state whether you fancy answering it or not.

Mr Pezzullo : We don't discuss security arrangements for members of the executive, for our individual officers or for collective groups of officers. It's just not wise.

Senator PRATT: Have there been any extra costs in relation to the provision of security for you, including at your home?

CHAIR: I would assume that you do give briefings to the shadow Attorney-General or other shadow ministers, don't you?

Mr Pezzullo : Not necessarily on the matter that Senator Pratt is asking about, but there have been private briefings to the opposition on the construction of Home Affairs generally, yes.

CHAIR: Indeed, many of the current opposition shadows were ministers themselves and would be well aware of what happens?

Mr Pezzullo : Indeed. So it would be prudent practice to not canvass these matters publicly.

CHAIR: I'm surprised that Mr Dreyfus has suggested you ask the question.

Senator PRATT: Do you have a personal driver?

Mr Pezzullo : No. I drive myself. As a secretary, I'm entitled to occasional use of a COMCAR, which I use sparingly.

Senator PRATT: So you can't disclose whether you have any extra personal security—

Senator Fifield: It wouldn't be—

Senator PRATT: I understand. It's been put on the record.

Senator Fifield: It's a matter of good practice not to canvass the security arrangements, whether it be of high office holders, such as ministers, or of senior public officials. Nothing should be read into that one way or the other.

Senator PRATT: I understand what you're saying, Minister. Do you have support now for an office at your private residence?

Mr Pezzullo : No. I prefer not to work at home.

Senator PRATT: You don't do that?

Mr Pezzullo : The only work I take home relates principally to unclassified reading. I try to do all that at home. But, no, I don't take classified papers home if I can avoid it.

Senator PRATT: Has there been any change in the number of executive assistants that support your work?

Mr Pezzullo : No.

Senator PRATT: So you have just one, or—

Mr Pezzullo : No. I have a chief of staff, an executive officer and an executive assistant.

Senator PRATT: So three, and that hasn't changed. How many speaking appearances have you had since being named the secretary designate of Home Affairs?

Mr Pezzullo : I'll have to take that on notice. Since the Prime Minister announced my appointment as the incoming Home Affairs secretary, I think one; Senator Watt asked about it earlier. But I'll take that on notice just in case that's not accurate.

Senator PRATT: How many media interviews have you done?

Senator WATT: On the record?

Mr Pezzullo : Shall we compare notes, Senator Watt?

Senator WATT: I always go on the record, as you can see!

Mr Pezzullo : Are you asking me a question or making certain assertions?

Senator PRATT: I'm asking how many media interviews you have done?

Mr Pezzullo : I'll take that on notice.

Senator PRATT: Thank you. We have canvassed this in part previously: which published official review specifically recommended the creation of the Department of Home Affairs?

Mr Pezzullo : 'Which published official review'? I think the Prime Minister has handled this question himself and has stated quite categorically that it was his decision. He took soundings from many colleagues, including international counterparts, and he came to this view after consulting his colleagues, as any Prime Minister of the day is entitled to.

Senator PRATT: Can you reference any reviews that did recommend its creation?

CHAIR: Didn't we go through this earlier today?

Mr Pezzullo : I think I just answered.

Senator PRATT: They are different questions.

Senator Fifield: They are different questions. But, to be fair to the secretary, these are ultimately decisions—

Mr Pezzullo : Yes.

Senator Fifield: I was going to say 'of government', but actually they're ultimately decisions of the Prime Minister of the day. That is who determines the administrative orders and the portfolio arrangements. and prime ministers take into account a range of sources of advice. The Prime Minister did so and made this decision.

Senator PRATT: So are there any official reviews which did recommend its creation?

Senator Fifield: Again, it's not—

Senator PRATT: It's a yes or no answer.

Senator Fifield: Well, it's not really a question for the secretary, because the secretary did not take the decision in relation to the configuration of this portfolio. That was a decision of the Prime Minister.

Senator PRATT: What about you, Minister Fifield? Will you answer whether there were any reviews?

Senator Fifield: It was not my decision; it was the Prime Minister's decision. Questions about portfolio arrangements are really best posed in Prime Minister and Cabinet estimates.

Senator PRATT: Clearly a decision was taken irrespective of any reviews, because that's what you've said. I am simply asking, 'Were there any reviews?'

Senator Fifield: As I said, the ministerial arrangements, the portfolio arrangements, are matters for the Prime Minister. So questions in relation to the administrative orders and portfolio arrangements are best put at Prime Minister and Cabinet estimates, which will be occurring later today.

Senator PRATT: We know the answer is: no, there were no reviews.

Senator Fifield: Well, I—

Senator PRATT: Nevertheless, the Prime Minister has made that decision.

Senator Fifield: That's as far as I can assist the committee.

Senator PRATT: Okay. I will move on. In an interview with The Monthly, you said: 'Here’s the bottom line right up front. Immigration is so important that it can’t be left to a single department.'

Mr Pezzullo : Yes.

Senator PRATT: If immigration is so important, would it not have been beneficial to at least have a Commonwealth department with 'immigration' in its title?

Senator Fifield: It is in the title of the portfolio minister. He has two titles: Minister for Home Affairs and Minister for Immigration and Border Protection.

Senator PRATT: Are you aware that immigration is not a Commonwealth government title within a department for the first time since 1945?

Mr Pezzullo : Well, it's in the ministry.

Senator PRATT: That was not the question.

Mr Pezzullo : I know it's not in the question.

CHAIR: The question is: 'Are you aware?'

Mr Pezzullo : I would have to check what happened when the Whitlam government merged labour and immigration functions in '74-'75—whether the immigration title was subsumed at that time. I would just have to check that that is a matter of fact. When Dr Wilenski was the secretary of the department.

Senator PRATT: But you've stated very strongly that 'the bottom line is that immigration so important'—

Mr Pezzullo : Correct.

Senator PRATT: is it not somewhat incongruent that we now have a department without that in its title?

CHAIR: That's not a question for the secretary.

Senator Fifield: No. The titles of departments are as they are, and it's a statement of fact that Minister Dutton has as one of his titles Minister for Immigration and Border Protection.

Senator PRATT: How many executives have departed the Department of Home Affairs since its creation?

Mr Pezzullo : On 20 December—we've had people come in. I'm not aware of anyone leaving. I would have to take it on notice.

Senator PRATT: If you could take on notice how many.

Mr Pezzullo : In the last nine weeks?

Senator PRATT: And what reasons were given.

Mr Pezzullo : I doubt—

CHAIR: Will you take it on notice? Thanks. Next question.

Senator PRATT: And, if there are any, what recruitment processes are being put in place to replace those staff.

Mr Pezzullo : I will take that on notice.

Senator PRATT: If I could now ask just briefly: during the last hearings we heard about an investigation into a pornographic tweet that had been 'liked' by the ABF commissioner's Twitter account. As I understand it, apparently six or more departmental staff had access to that account?

Mr Pezzullo : Yes.

Senator PRATT: The like occurred while the commissioner had been on leave. Has an investigation into this tweet been concluded?

Mr Pezzullo : That matter has been resolved, or at least the investigation has been concluded. I'll ask either Ms Noble or Ms Moy to provide you with a more detailed answer.

Ms Noble : The matter was referred by the department to ACLEI, and ACLEI have subsequently advised that they found no evidence that Mr Quaedvlieg had used the official ABF commissioner's Twitter account to like a tweet containing a pornographic clip from an account under the name Lady Mystique. ACLEI also found no evidence of who had liked the tweet or whether the like was accidental or intentional.

Senator PRATT: So you would describe that finding as the outcome of the investigation, and that is that there was no evidence to show that it was the commissioner and there was no evidence to show who it was? Is there evidence to show that it could have been one of the six departmental staff who had access to the account?

CHAIR: I think Ms Noble has already answered that there was no evidence.

Ms Noble : There is no evidence. I said that ACLEI found no evidence of who had liked the tweet or whether the like was accidental or intentional.

Senator PRATT: So it could have been accidental. Has ACLEI been able to rule out access to the account from someone other the commissioner or those six people?

CHAIR: Repeat the same answer.

Senator PRATT: This is a different question.

Ms Noble : I can only repeat what ACLEI has advised us: that they found no evidence of that.

Senator PRATT: No evidence of—

Ms Noble : Of who had liked the tweet.

Senator PRATT: They could not tell which of the six people might have accidentally or purposely done it. That is not the same as ruling out whether the account had been hacked by someone else and someone had inappropriate access to it. Someone did have inappropriate access to it. What happens if a commissioner tweets that there's about to be a massive flood of boats, or a bomb scare or something inappropriate? How can you rule out that the account has not been inappropriately accessed?

Mr Pezzullo : You mean in a hack?

Senator PRATT: Yes. You've got to be able to rule that in or out.

Mr Pezzullo : I think the evidence is that it's not possible to determine who created the like.

Ms Noble : That's right.

Senator PRATT: Is it possible to rule out someone else getting into the account who did not have authority to do so?

Ms Noble : On the face of it, it's not possible to rule out the possibility that the account was hacked. What ACLEI have told us is that they have no evidence one way or the other.

Senator PRATT: So the commissioner was cleared of any wrongdoing. It's been finalised. Have those outcomes been made public, or are we in effect doing that now?

Ms Noble : I think we're in effect doing that now.

Proceedings suspended from 12:45 to 13:45

CHAIR: I will declare open again the Legal and Constitutional Affairs Legislation Committee's inquiry into the additional estimates for 2017-18. We are dealing with the Department of Home Affairs. We are dealing with cross-portfolio/corporate/general. Our schedule is to go to outcome 1, Protecting Australia's sovereignty et cetera, which is really Border Force, which we will do as soon as we have finished with cross-portfolio/corporate/general. I will now pass to Senator Pratt.

Senator PRATT: Thank you. Have ministers within the new Department of Home Affairs been provided with a charter letter outlining their responsibilities, following the December cabinet reshuffle?

Mr Pezzullo : I do have direct awareness of that but it's probably a question best directed through the minister to the ministers themselves. These letters are provided by the Prime Minister. I think it best that I seek counsel from the minister.

Senator PRATT: Surely that is something that you would know the answer to.

Mr Pezzullo : I do know the answer to it. I am just saying that it is a letter from the Prime Minister to the ministers, so I might just seek the ministers' counsel.

Senator PRATT: Surely that is within your purview, though.

Senator Fifield: As the secretary is indicating, charter letters are something between the minister and the Prime Minister. While I could certainly speak to my own portfolio, which isn't here before the committee at the moment, I would have to take on notice the question in relation to a charter letter to Minister Dutton.

Senator PRATT: How do you, Mr Pezzullo, know who has carriage of programs, services or portfolios if those charter letters are not within your knowledge?

Mr Pezzullo : I didn't say that they weren't within my knowledge. I just didn't presume to be speaking about a matter that is between the Prime Minister and his ministers. Secretaries are, either by direct provision of said correspondence or by some other means, advised of the division of programmatic responsibilities always between a cabinet minister, junior ministers and parliamentary secretaries or assistant ministers in the normal course of either a new ministry being sworn in or after a MOG change. I have a very clear view of the list of responsibilities that each minister is responsible for.

Senator PRATT: How have you acquired your knowledge about that list of responsibilities? How may I, as a member of this committee, know who is responsible for what?

CHAIR: Why don't we ask the secretary what each minister does and what the responsibilities are?

Mr Pezzullo : I am happy to oblige. You ask how did I come across this knowledge.

CHAIR: It doesn't matter. Just tell us what they do. That's what we're interested in.

Mr Pezzullo : Indeed. The cabinet minister, obviously—Mr Dutton—has overall responsibilities for the portfolio generally. As we discussed before the break, he is also the immigration minister in his own right. He has responsibilities for, in portfolio terms, each of the matters that I enumerated in my opening statement. He has a particular focus in those responsibilities on counterterrorism, serious transnational organised crime at the strategic level, and a number of other matters that I could articulate. But it is best to go to the two ministers by exception, because that will give you a sense of what they do. Mr Tudge is the Minister for Citizenship and Multicultural Affairs. He focuses on those areas of the list that I provided to this committee that have a bearing on citizenship, multiculturalism, social cohesion, the settlement of migrants and the like, and refugees.

CHAIR: Just to be helpful, that would be sort of akin to outcome 2 on our list. Are they Mr Tudge's responsibilities?

Mr Pezzullo : Particularly 2.1, and some bearing on 2.2, 2.3 and 2.4. Principally Mr Tudge would operate in the area of 2.1. Mr Taylor is the Minister for Law Enforcement and Cybersecurity. As the name implies, he focuses mainly on transnational crime, Commonwealth law enforcement and the criminal justice aspects of the Commonwealth's roles and responsibilities that fall within this portfolio, noting that they're shared with Attorney-General's. He is also the day-to-day minister responsible for cybersecurity. Mr Hawke is the Assistant Minister for Home Affairs and principally operates in the immigration visa area. He has other responsibilities, as I recall it, that pertain to trafficking and slavery.

Senator PRATT: How have you acquired your knowledge of where you work with?

Mr Pezzullo : Through a combination of the provision of documents from the minister himself; my awareness of what's in the charter letters; and direct conversations with the cabinet minister, the two ministers and the assistant minister.

Senator PRATT: The charter letters, I take from that, have been issued. I note that two weeks ago in parliament the Minister for Citizenship and Multicultural Affairs answered questions during question time about skilled migration, which is clearly an immigration matter. Has Minister Dutton, as the Minister for Home Affairs and minister for immigration, handed over immigration responsibilities to the junior minister, Mr Tudge?

Mr Pezzullo : He has delegated certain of his responsibilities. I do recall the answer in the House to which you refer. Mr Tudge has particular leadership in terms of the reforms to temporary skilled migration.

Senator PRATT: Is it a case of the immigration minister simply not being across his brief? Why does he not take ultimate accountability for answering those questions?

CHAIR: I do not know that that is a question that either of these—

Mr Pezzullo : I would prefer to refer that to the minister but, just as a matter of practice, the cabinet minister in a portfolio is always the senior minister and is always able, unless statute provides otherwise, to range across any matter. It is then a matter for that minister and his colleagues to divide up the workload and the various programs and subprograms.

Senator PRATT: Yes, and in your remarks, Mr Pezzullo, you stated, I think, that 2.3, 2.4 and 2.2 had some involvement from Minister Tudge—

Mr Pezzullo : In the way that they've divided up the work.

Senator PRATT: but that Minister Dutton is still the primary minister and therefore should be the one accountable in question time.

Senator Fifield: Just to draw an analogy, it has been common over the years to have a Treasurer and an Assistant Treasurer. There isn't presently the position of Assistant Treasurer but in the past there has been. The Assistant Treasurer has on some occasions been in the House of Representatives, as well as the Treasurer. In that circumstance, where there is an area of direct responsibility for the Assistant Treasurer they have answered those questions. The Treasurer remains the senior portfolio minister in that sort of circumstance, with overall responsibility for the portfolio. But where there are discrete areas of responsibility a junior minister can take and has taken questions in question time.

Senator PRATT: If we put questions on notice on migration and visas through this committee, who's responsible for signing off on those answers?

Mr Pezzullo : The responses come from the department, of course, and—

Senator PRATT: Yes but the minister has to sign off on them. I assume that's Minister Dutton.

Mr Pezzullo : To the extent that there's consultation with ministers or their offices, we'll consult in accordance with the division of responsibilities that I've been advised about.

Senator PRATT: I understand that, but ultimately the sign-off for that needs to come through the responsible ministers. Who will sign off on those answers? Will it be Minister Tudge, or Minister Dutton?

Mr Pezzullo : We will take that on notice. If either minister wishes to add to these remarks, I am sure they will. But I cannot really add much more to Minister Fifield's answer at the table. The cabinet minister is always ultimately responsible for all matters that arise within the portfolio, then, subject to the division of labour that's been agreed both in the charter letters and in terms of specific operational divisions of responsibilities, the relevant minister or his office or her office will get involved. It is pretty straightforward. In my 30 years of being in the Public Service or associated with the Public Service, the role of cabinet and junior ministers has been fairly clearly demarcated. It sometimes varies a little according to preference but it is a fairly well understood practice.

Senator PRATT: It might well be understood at times, but it was met with surprise that Minister Tudge was answering those questions instead of the cabinet minister.

Senator McKIM: Are either you, Minister, or Mr Pezzullo able to table for the committee which portfolio minister has responsibility for what?

Senator Fifield: We can take that on notice.

Senator PRATT: We'd appreciate that.

Senator Fifield: I'm sure it will be possible to table a document that outlines the allocation of portfolios.

Senator McKIM: It's not an unreasonable request. The doctrine of ministerial responsibility under—

CHAIR: It's been agreed. There is no need to argue. They've agree to do it.

Senator McKIM: The question is when will we get it?

Senator Fifield: That will be accommodated. Mr Pezzullo has already gone through the broad areas of portfolio responsibility, which he can do so again, but we are very happy to have that in a documentary form.

Senator PRATT: Has an incoming ministers briefing been provided to all new ministers in the new department?

Mr Pezzullo : Yes.

Senator PRATT: Can you provide a copy of those briefs on notice?

Mr Pezzullo : I'll take it on notice.

Senator PRATT: It is some two months into the job and ministers are still not sure of what they're doing.

Mr Pezzullo : Not only did I not say that, I don't see how you can possibly infer that. They are very clear on their responsibilities.

Senator Fifield: I can confirm that ministers have received their charter letters in this portfolio.

Senator PRATT: How are we supposed to hold people to account for their portfolios if we're not aware of who is responsible for doing what in the accountability mechanism of the parliament?

Mr Pezzullo : In these estimates proceedings, you're asking me questions as head of the department. The minister at the table will answer on political matters. How you hold ministers to account in the chambers is not a matter for a public servant. Minister Fifield has taken on notice the provision to this committee of whatever material we can provide. I might well be that there's material on my own website that articulates the broad division of responsibility. I need to get that checked. There might even be something that we can do this afternoon.

Senator PRATT: We need to be confident that people are meeting their statutory obligations.

Mr Pezzullo : Indeed.

Senator PRATT: We can't do that unless we know who is responsible for what. I look forward to that information in a timely manner. What I'm worried about is, in turn, if we don't know their responsibility transparently, how can we be sure about the validity of documents, letters and decisions made by multiple ministers and junior ministers that fall under the new Department of Home Affairs?

Mr Pezzullo : I suppose you can make that point in relation to any portfolio that has more than one minister, and most portfolios these days—ever since the significant megadepartment changes of 1987—have always had teams of ministers. It's an enduring issue that's been around for 30 years. It has a very straightforward, orthodox response: wait for the list of responsibilities and it'll become apparent.

CHAIR: Does anyone else have any questions on general cross-portfolio or budget?

Senator KIM CARR: Yes.

CHAIR: Let me check with others first.

Senator McKIM: Not since you unilaterally changed the rules this morning, Chair, no.

CHAIR: Yes, okay. Thank you. Senator Carr?

Senator KIM CARR: I want to return to your opening statement on page 7. 'The department's mission is to secure our nation's vital networks, systems and assets while at the same time facilitating legitimate movement of goods, people and data as well as a managed and orderly migration.' You've indicated as well to me today in regard to the administrative arrangements that you're looking at the integration of the IT systems.

Mr Pezzullo : No, I didn't say that. If you go to page 8, we are looking at the possibility of synergies in some of those areas. I draw your attention to the last page of that statement—point number 2.

Senator KIM CARR: Number 2 is to 'take advantage of the integration of a larger and more innovative portfolio or a build scale-up capability to exploit previously unattainable synergies'. So you're not looking at the integration of your IT systems.

Mr Pezzullo : Which systems?

Senator KIM CARR: Your IT systems.

Mr Pezzullo : But which ones?

Senator KIM CARR: For instance, in regard to visas.

Mr Pezzullo : Visas are within the department as an integrated platform.

Senator KIM CARR: Yes. Is there a proposal for visa services to be sought to be outsourced to the market?

Senator McKIM: Point of order, Chair. You ruled me out of order when I tried to ask questions about this earlier and said I'd have to wait. I'd just ask you for some consistency here.

CHAIR: You're quite right, Senator McKim. Thank you for raising the point of order. The point of order is—

Senator KIM CARR: You can ask what you like, Senator McKim. I've asked a direct question relating to the—

Senator McKIM: So did I, and it was ruled that I couldn't ask it and I had to wait.

Senator KIM CARR: Did you relate it directly to what the secretary said?

Senator McKIM: Yes, I did. It's the chair's ruling I'm on.

Senator KIM CARR: That's not what you did.

Senator McKIM: It's the chair's ruling.

Senator KIM CARR: No, that's not what you did.

Senator McKIM: It's the chair's ruling I'm on.

Senator KIM CARR: That's not what you did. I'm relating it directly to what the secretary has told this committee. I'm asking a question that goes directly to what has been put to this committee. I want to know whether or not the department is seeking—

Senator McKIM: I agree.

Senator KIM CARR: to outsource its visa arrangements in regard to its IT systems.

Senator McKIM: Well, what is it, Chair? Are we allowed to ask on this or not?

CHAIR: Sorry, was this mentioned in the secretary's point?

Mr Pezzullo : Not directly. Arguably, Senator Carr, with all due respect, those changes that both you and Senator McKim have started asking about are all within the ambit of the former DIBP. My statement relates to the transition to Home Affairs.

Senator KIM CARR: Yes. I want to know whether or not there's been an integration or attempt to integrate the IT services, and it's whether there's been any outsourcing of IT services.

Mr Pezzullo : The narrow answer to your question is: not strictly as a result of the creation of Home Affairs, which is what my statement is about.

Senator KIM CARR: The broader interpretation might well be that you are looking at outsourcing of IT services.

Senator McKIM: Of course he is.

Mr Pezzullo : In terms of visa service delivery, I can only rely on the guidance that the chair gave me, which is to address those matters under program 2.3.

Senator KIM CARR: So you're refusing to answer now, are you?

CHAIR: No, that's my ruling.

Mr Pezzullo : I'm just seeking to follow the chair's guidance.

CHAIR: Senator Carr, as soon as we finish this general cross-portfolio we'll be getting onto border protection and then to visas, which we've got a particular program for.

Senator KIM CARR: I want to know what the cost of any changes have been to the IT services provided in this area. Have there been estimates on cost changes?

Mr Pezzullo : In terms of visa service delivery reform? Mr Chairman, I would seek your guidance. Am I required—

CHAIR: Are you or your chief financial officer able to give that information, or is it something you need the—

Mr Pezzullo : We can certainly speak about the market testing of visa service delivery.

Senator KIM CARR: Oh, good. Great!

Mr Pezzullo : Previously, you'd indicated you wanted me to address that under 2.3.

Senator McKIM: That's right, you did. Changed your mind now.

Mr Pezzullo : I'd just seek your guidance.

CHAIR: I don't know what the answer's likely to be, but if it's general stuff and cross-portfolio budget related

CHAIR: Please, Senator Pratt, I'm just mentioning this. If it falls within those categories, yes, but if it's a specific thing relating to visas, which is program 2.3—you guys know where it comes. I would assume in detail would be 2.3.

Mr Pezzullo : My contention would be that the specific reform of the service delivery arrangements are quite specific to program 2.3.

CHAIR: Let's deal with it then. We've got plenty of time to do that later on. Anything on general, cross-portfolio or budget?

Senator KIM CARR: If that's the way you want to do it.

CHAIR: Yes, it is.

Senator KIM CARR: All you do is delay the inevitable; in fact, you delay the work of the committee.

CHAIR: What delay's the inevitable is you keep talking and not asking your question.

Senator KIM CARR: Yes, all right. Are you aware of an ARPANSA report into the operations of the department at airports?

Mr Pezzullo : ARPANSA being the nuclear safety regulator?

Senator KIM CARR: Yes, the Australian Radiation Protection and Nuclear Safety Agency.

Mr Pezzullo : There is something that's coming to mind, but I can't recall it with specificity. You might assist me. I'm not sure that it would certainly not be captured under cross-portfolio, but I'll leave that to one side. I do recall there has been an issue about possibly some of our examination or screening material, but perhaps you might assist me with more detail.

Senator KIM CARR: There's a question about the systemic failure. That's why I'm raising it here. ARPANSA is the primary authority for radiation protection and nuclear safety. It's responsible for the monitoring of the use of radiation. The quarterly report on page 8 lists the details of any breach of licence conditions for licensees. It says, 'One significant breach was identified: the Department of Immigration and Border Protection has possession of controlled apparatus without a licence'. Do you have an officer here that is responsible for that area?

Mr Pezzullo : They might be available under the relevant program, which would be border enforcement.

Senator KIM CARR: They're not here now?

Mr Pezzullo : I am not sure. It depends on the nature of the equipment in question. Apparently we do have an officer close by. There is a particular technology that the senator's question goes to and I'll need to get the expert, who I'm told is nearby in the room.

Senator KIM CARR: Thank you. While they're coming in perhaps I'll—

CHAIR: What area is that?

Mr Pezzullo : It would almost certainly be border enforcement technology I would suggest, so 1.1.

CHAIR: We're moving on to that.

Senator KIM CARR: No. I've asked for it here for a reason. You have an officer available?

Mr Pezzullo : I believe so.

Senator KIM CARR: Thank you. I'll perhaps move onto a question on FOIs while we're waiting.

CHAIR: Yes, please.

Senator KIM CARR: Have you got the FOI officer here?

Mr Pezzullo : Yes, I'm sure we do, because it is cross-portfolio and corporate.

Senator KIM CARR: Thank you. What's the longest time it's taken you to respond to an FOI?

Mr Pezzullo : I'll have get some assistance. Mr Groves, head of our corporate group, might come and assist me with that. The answer is: I don't now off the top of my head.

Senator KIM CARR: I wouldn't expect that you would.

Mr Pezzullo : Perhaps Mr Groves first and then if he needs to be assisted by Mr Wright.

Senator KIM CARR: What's the longest period it's taken for the department to process an FOI request?

Mr Groves : I have lots of information but I don't think I've got that. Unless Mr Wright can point me to the right figure?

Mr Wright : No. I couldn't tell you exactly what the longest FOI request of the department was historically. I'd have to take that on notice.

Mr Pezzullo : To assist the officer, Senator Carr, over what time period?

Senator KIM CARR: Let's take it over the last four years.

Mr Pezzullo : We will take that on notice going back to 2013-14.

Senator KIM CARR: Thank you. It was put to me that with a simple request for meeting minutes it was 426 days. What's the statutory obligation in terms of the period of time that you're allowed for responding to FOIs?

Mr Wright : Our standard time frame is 30 days and then, subject to other parts of the act, that can be extended for various reasons.

Senator KIM CARR: The Australian Information Commissioner has indicated that the department's conduct 'shows a disregard for the statutory processing time frames set out in the FOI Act and frustrated the FOI section's attempts to process the relevant requests in a timely manner'. Are you familiar with that finding?

Mr Wright : I am. That finding in that report relates to an incident that happened in October 2016. At the time, the department had around 6,000 overdue FOIs on hand. That's now been reduced to around 300. Our compliance rate went up from an average 26 per cent for the year. It's now 82 per cent, as of today, year to date. And our month—

Mr Pezzullo : It's a sterling performance, Mr Wright. Well done.

Mr Wright : Thank you, Secretary. Our monthly reporting rate is now around 93 per cent compliance with the act.

Senator KIM CARR: Is it the case that the report found that, in the particular example of four Nauru-related FOI requests, they were put on hold due to delays in internal consultation processes.

Mr Wright : That's what the report states, yes.

Senator KIM CARR: So that's an accurate—

Mr Wright : It's accurate in the sense that the FOI requests were not being progressed while the consultation was happening. The way that the process occurs for those being handled within the ACT is that the decision-maker is not part of my team; they're part of the business unit. We have decision-makers who go through quite a lengthy training process to be able to make that decision, and we assist them in that. When the business area is doing the consultation—be that with other parts of the business or with external parties, such as external governments and external agencies—they undertake that without assistance. While that's occurring it's probably fair to say that the FOI is not being progressed and is, as the words for the commissioner, 'on hold until that consultation is completed'.

Senator KIM CARR: How many FOI request are on hold?

Mr Wright : Technically, no requests are on hold.

Mr Pezzullo : They can't be on hold.

Mr Wright : Exactly, because we can't put them on hold.

Senator KIM CARR: It's a matter of law.

Mr Pezzullo : That's right. It'd be against the law, wouldn't it?

Mr Wright : They're not on hold in terms of the freeze. This relates to that FOI email that came out in 2016 about the use of the terminology 'freeze'.

Senator KIM CARR: Yes.

Mr Wright : And that was sent to the OAIC as a complaint, and I still stand by my previous evidence that there was never a freeze on any FOI request. Throughout the OAIC report, it relates to some instances where the consultation was occurring, but the actual FOI request, from a central administrative perspective, was waiting for the consultation to happen, so it was sitting there.

Mr Pezzullo : Was this the issue that you've given evidence on involving consultation with foreign governments, amongst others?

Mr Wright : Yes, Secretary.

Mr Pezzullo : Yes, I do recall that.

Senator KIM CARR: You'll correct me if I'm incorrect here, but I'm told the Australian Information Commissioner has found that at least four FOI requests were put on hold—four.

Mr Wright : Correct, and it relates to the October 2016 email that went out and the requests that were associated with that.

Senator KIM CARR: And the secretary has just told us that that's illegal.

Mr Pezzullo : It's not in conformance with the law. And, Mr Wright, I think when you're saying 'correct' to the senator, we want to be very precise in our comments. The commissioner found—in a way that to this day I certainly would not endorse, but he's the commissioner and he can find whatever he likes—and everything was put on hold, as Mr Wright—you've given hours of evidence on this.

Senator KIM CARR: I was just told that that's correct. Is it correct or not correct, Mr Wright?

Mr Wright : There was never a freeze put on the FOI requests—

Senator KIM CARR: I didn't ask that; they were put on hold.

Mr Wright : They were not put on hold from a departmental perspective or from a perspective under the law.

Mr Pezzullo : Thank you.

Mr Wright : What it's relating to was that there was a consultation process occurring within the department, and I think the words are that 'four interrelated FOI's were put on hold due to delays in the internal consultation process'.

Mr Pezzullo : Whose view is that, Mr Wright?

Mr Wright : That was the view of the OAIC commissioner—

Mr Pezzullo : He's entitled to that view, but I don't agree with it.

Senator KIM CARR: I see; you're disputing his view.

Mr Pezzullo : Yes, and we did at the time.

Mr Wright : I've never instructed that any FOIs go on hold. I know my staff have never gone out to frustrate the process, and I still categorically go against the fact that there was any freeze put on any FOI request.

Senator KIM CARR: Can you tell me this: is there a particular way in which FOI requests from MPs to minister's offices are treated? Are they treated differently?

Mr Wright : They're not treated differently in the respect that they're from a minister.

Senator KIM CARR: Obviously! I assume the government doesn't FOI itself.

Mr Wright : Sorry, Senator. The way that we've set up the process within the department is that what we refer to as the personal requests related to immigration type of matters, such as visas and citizenship, are all done interstate, in Sydney and in Melbourne. The non-visa-related requests, such as those coming from members of parliament, reporters, staff—staff looking to get their own personal records from a recruiting process or something else—or anyone else are done centrally within Canberra.

Senator KIM CARR: Right.

Mr Wright : That process, as I said before, is different in the sense that we have a decision-maker who is not part of the FOI team for the majority of them.

Senator KIM CARR: These are from public sources: members of parliament or the like. I would call those the public sources, and they're treated in a different way, are they?

Mr Wright : They're managed in a different way in the sense that they're generally more complex. They generally involve more areas within the department to obtain information. They're just more complex and generally more voluminous in their requests. They're treated differently in the way that they're not a standard request for personal information that we've got down quite pat, so we've got different reporting mechanisms in place. The report came out and made a couple of recommendations which we'd already put in place—things like escalation of FOI requests to try to get people to go through quicker—which I think is evident in the fact that now, as I said before, we're around 93 per cent compliant compared to where we were.

Senator KIM CARR: So there's been a review of the FOI processing policy within—

Mr Wright : Correct.

Mr Pezzullo : Was it after that report or more generally?

Mr Wright : No, this was done before that report. As part of the OAIC investigation, we provided two submissions back to the commissioner, and I think there were around 4,000 folios attached to those submissions about what happened and why. And in that same time, we actually started off looking at our own processes and procedures because we needed to get our compliance rate up. So one of the specific activities we did, which we have shared with the commission, was to look at the Canberra-based cohort of requests to identify where we can streamline the process better, where we're getting stovepipes and where we're getting blowouts in times to improve our compliance rate.

Senator KIM CARR: Is that response to the commissioner available to the committee?

Mr Wright : I would have to take that on notice. I don't see why not, but part of the response was provided in confidence—obviously because some of the information contained in the response we would claim was not for public consumption per se.

Senator KIM CARR: You will consider—

Mr Pezzullo : I do recall that we publish something, didn't we? I might be mistaken.

Senator KIM CARR: There may well be personal matters—

Mr Pezzullo : We might have redacted—

Senator KIM CARR: You might have to redact. I accept that that's a reasonable—

Mr Wright : We can.

Mr Pezzullo : I may be confusing that with a detailed response to a question on notice, but I do recall we have provided to this committee -

Senator KIM CARR: Will you take on notice that I'd like you to table the report to the committee or as much of it as can be done without identifying individuals?

Mr Wright : I'd like to clarify that: as I said, there were at least 4000 attachments to those two—

Senator KIM CARR: We are quite capable of handling large documents here. Thank you very much, Mr Wright. I know you're concerned.

Mr Pezzullo : Your concern for the senator is endearing to him, but he's indicated that he's not troubled.

Senator KIM CARR: I take it that you're going to adopt all seven recommendations by the Information Commissioner.

Mr Wright : We've already implemented everything within those recommendations anyway.

Senator KIM CARR: All of them?

Mr Wright : All of them, as best we can. There is one recommendation which talks about resourcing, and I believe we've had the discussion before about the allocation of resourcing within the department.

Mr Pezzullo : Sorry, Mr Wright, but did we fully agree or partially agree to all the recommendations?

Mr Wright : We partially agreed to them and we've got to come back to the commissioner in March about how we've implemented it.

Mr Pezzullo : I don't intend to respond in an area where we've partially agreed to the full recommendation.

Senator KIM CARR: That's what I'd like to know. What's your response to the Commissioner's seven recommendations? Can you indicate to the committee what you've accepted and what you've rejected? Can I ask you this as well: has the immigration minister or his staff ever requested any information be withheld from an FOI request?

Mr Pezzullo : It wouldn't be for the minister or his office to get officers to give directions.

Senator KIM CARR: Mr Pezzullo, I understand the law too, and that's why I'm asking the question. Is it the case?

Mr Pezzullo : Not to my knowledge. But in the stakeholder engagement that occurs with ministers when matters pertain personally to them or their staff, in the consultation process their views are taken on board. But as to the specifics, I prefer to take it on notice.

Senator KIM CARR: There may be FOI requests that relate directly to the minister's office. I understand that is one category, but there are many others that don't.

Mr Pezzullo : I understand the distinction you're drawing and I'm taking both elements on notice.

Senator KIM CARR: Is the officer responsible for the licensing questions available?

Mr Pezzullo : I gather that he is available. Mr Chair, am I given to understand that we are now moving into program 1.1?

CHAIR: Does anyone have any more cross-portfolio corporate or general questions? Nobody has. Senator Carr, would you be happy—

Senator KIM CARR: I want to deal with them now.

CHAIR: We are going onto that section—

Senator KIM CARR: I want to deal with them now.

CHAIR: Don't you want the Border Protection people give an opening statement?

Senator KIM CARR: No, I want to deal with ARPANSA now. That's what I asked for.

CHAIR: It's a matter of 15 minutes.

Senator KIM CARR: I've asked for this in cross-portfolio. I'm not quite certain why you'd want to avoid it.

Mr Pezzullo : If it assists the committee, the officer is at least 10 to 15 minutes away. I'm also seeking your guidance, chair, as to where we are in the program.


CHAIR: If the officer is 10 to 15 minutes away—we have finished with general and cross-portfolio. We are not going to sit here and wait 10 or 15 minutes to answer Senator Carr's question. So we will now go on to Outcome 1: Protection of Australia's sovereignty, security and safety through its national security. As we agreed earlier, I will call the Border Protection people to the table. I think we have an opening statement from the Border Protection officer. I think it's Mr Outram.

Mr Pezzullo : With your indulgence, Mr Chair, can the Acting Commissioner of the Border Force make his opening statement now?

CHAIR: That's what we agreed.

Senator McKIM: Can I just ask for a clarification. I understood you to say earlier that you were going to deal with all of outcome 1 as a group bar the last matter, which is program 1.10, Australian government disaster financial support payments.


Senator McKIM: So that is still the intent. So when you say we are moving on to 1.1, we are actually moving on to 1.1 to 1.9 inclusive.

CHAIR: I am in the committee's hands, but unless anyone objects I intended to do 1.1 to 1.9. They will be the same officers, I would assume, very often, and they can come in. It is generally a particular area of the department. So I think that would be convenient for the committee. If it is convenient to the department, then everyone will be happy. When we finish that, which we have set down until three o'clock—hopefully, optimistically, although I suspect that's not going to be met—then we will go on to disaster financial support payments. Mr Outram, over to you.

Mr Outram : Thank you, senators, and good afternoon. I have a short statement if that's okay, chair. Since the stand-up of Home Affairs in December last year, the Australian Border Force has been working as one of the portfolio's frontline independent operational agencies. Home Affairs builds on the gains we've made since 2015 which integrated the ABF's customs and migration enforcement and facilitation functions within the Department of Immigration and Border Protection, by creating greater strategic alignment with other law enforcement, intelligence and national security agencies, maximising our combined capabilities to protect the Australian community. Our ABF officers continue to adapt and contend successfully with ever-increasing threats at the border and volumes of travellers and goods at the border. Volumes are projected to grow by as much as 22 per cent for passengers and 34 per cent for air cargo in the years leading up to 2020-21. The scale of noncompliant and criminal behaviour, no doubt, will likely mirror that trend.

The transition to Home Affairs will enhance the ABF's ability to perform its role as Australia's customs service, including the dual and mutually complementary imperatives of travel and trade facilitation and enforcement of border laws, which are essential to Australia's security and prosperity. The ABF Commissioner remains the Comptroller-General of Customs, and the ABF continues to work closely with international partners, including through the World Customs Organization, to shape the global customs and border protection system. Through greater coordination and cooperation between Commonwealth agencies and our national and international networks, we can better target entities in Australia and overseas that represent the higher risk of transmission, while we develop and expand programs that facilitate legitimate trade and benefit Australian industry and consumers.

We continue to build the Australian Trusted Trader program, ATT, providing businesses with trade facilitation benefits and improving access to international markets. Since its inception in July 2016, Trusted Trader has accredited 138 businesses and service providers into the program, and we are expanding the benefits available to accredited traders. ATT is supported by mutual recognition arrangements with five key trading countries, including arrangements signed in November with China, our largest trading partner. These arrangements are expected to bring about half a billion dollars of benefit over 10 years through reduced customs delays in both countries. We continue to negotiate MRAs with other countries. Just last week in Seattle I signed a work plan with my US customs and border protection counterpart to progress an MRA with the United States.

The ABF is working within the Department of Home Affairs to address future trade facilitation initiatives, including a single-window environment for international trade to streamline how businesses interact with government and more seamless risk assessment of incoming and outgoing goods. Recent and emerging advances in analytics and technology are offering new opportunities to further enhance trade efficiency and security.

ABF officers do an incredible job in protecting our border and work well with our law enforcement partners. Consequently, we continue to make significant seizures of illicit drugs. I will give some brief examples. In December, a joint operation with Western Australian Joint Organised Crime Task Force resulted in the seizure of 1.2 tons of methamphetamine, the largest seizure of methamphetamine in Australian history, with an estimated street value of more than $1 billion. And just last month we concluded a nine-month operation in partnership with the Australian Federal Police and law enforcement and border protection agencies worldwide which resulted in the seizure of 1.28 tons of cocaine in Sydney with a potential street value nearing half a billion dollars. This was the second largest seizure of cocaine in Australian history. That followed separate seizures of 700 kilograms and 300 kilograms of cocaine, with a combined estimated street value of $350 million, in joint operations with law enforcement agencies in November last year.

Looking ahead, the ABF is very focused on achieving its mission of protecting Australian borders and enabling legitimate trade and travel. We will prioritise key threats, in particular people smuggling; terrorism; illicit drugs, tobacco and firearms; and any systemic exploitation of our visa programs. My leadership team, with support from the department, is also focused on developing our people, systems, facilities and technology. We will also ensure that the ABF is meeting the highest levels of personal, professional and ethical standards that the Australian public expect of us and that we expect of each other.

Finally the ABF is committed to cementing its place in the Home Affairs portfolio as a professional, disciplined and respected border enforcement agency which stands ready to meet the challenges and opportunities before us today and in the future.

CHAIR: I know I speak on behalf of the committee and indeed all parliamentarians and all Australians in taking this opportunity, when we can speak directly to you and your people, which we cannot do very often, to express our congratulations and thanks for what you have done. Your people are obviously at the front line, so I imagine that it is at times dangerous work. The results, some of which you have mentioned to us, are really incredible. We really thank you for your professionalism and what you have done—all of your team, the lot of them. I do hope they appreciate that we as Australians and particularly as parliamentarians appreciate what they do.

Mr Outram : Thank you.

Senator KIM CARR: Acting Commissioner, an incident occurred on 21 February in which seven boys aged between 14 and 15 were taken to hospital from Saint Stephen's College up in Coomera on the Gold Coast after consuming what is believed to be a drug imported from Russia, an anti-anxiety drug. Are you aware of this incident?

Mr Outram : I'm not aware of the details. I'm aware of the incident but not the great detail. Acting Deputy Commissioner Clive Murray may have more information.

Senator KIM CARR: The drug was imported illegally.

Mr Murray : I am aware of some detail I may be able to assist you with.

Senator KIM CARR: What is the Border Force able to tell me about it?

Mr Murray : In the first instance, the Australian Border Force continues to support the Queensland Police Service with their ongoing investigation. It relates to what appears to be the importation of a commodity called Phenibut.

Senator KIM CARR: That's a Russian drug, is it?

Mr Murray : I don't have that detail.

Senator KIM CARR: I'm told it is a Russian drug. It's not registered with the TGA; is that correct?

Mr Murray : I'm informed that it's now captured as part of the new psychoactive substance provisions and that the TGA have listed it now within the Poisons Standard in their measures as early as September of last year, 2017.

Senator KIM CARR: It was a prohibited substance, was it?

Mr Murray : I understand that it was scheduled for domestic control by TGA under the Poisons Standard, which took effect from 1 February of this year; but there was an interim measure as early as September 2017.

Senator KIM CARR: This event occurred on 21 February, so that was after that date?

Mr Murray : I understand so, yes.

Senator KIM CARR: When was Border Force made aware that this drug was in the country?

Mr Murray : I understand that it first came to our attention as a result of the incident that you referred to initially, at the school on the Gold Coast—the students at Saint Stephen's College. I understand that the Australian Border Force continues to support the Queensland Police Service with their inquiries.

Senator KIM CARR: I just want to know how it is that this stuff gets into the country.

Mr Outram : Senator, we obviously don't stop all drugs that come into Australia. We do what we can to suppress supply and we take an amazing amount of drugs out of the supply chain, but I would not seek to kid you or pretend that we get everything—far from it. Increasingly, criminal syndicates employ more sophisticated methods of concealing drugs, across the range of means by which they are getting them into the country, whether that be on passengers, in mail, in parcels, in air cargo, in sea cargo—you can imagine all the types of different consignments we get in which you can conceal narcotics, tobacco and a whole range of other things that we have to look for at a border.

Senator KIM CARR: Have you got any idea how this particular shipment got into the country?

Mr Murray : Senator, I think in forming your question you actually provided some of that detail. Again, I don't have anything further than that, other than that we continue to support the Queensland Police Service with their investigation.

Senator KIM CARR: What action are you taking to stop it happening again?

Mr Outram : What I can say is that we have an intelligence-led approach to dealing with all risks at the border, so any intelligence that is gleaned from this case in relation to the commodity itself and what we can find out about it will then feed into the way that we develop—and our intelligence area, in particular, develops—profiles in our systems. The profiles are the things we use to look for passengers and goods—cargo, in particular, and mail—that may do us harm.

Mr Pezzullo : I should add, at the risk of incurring Senator Watt's wrath, that that's an example of inserting yourself into supply chains. Thinking that we can open up every single container to slow down trade to find these—

Senator KIM CARR: This is online, Mr Pezzullo. This is not through containers. This was bought online.

Mr Pezzullo : Sorry—in any means of physical conveyance, unless you insert it into those supply chains, more of the stuff will get in, Senator Watt, so I'm just adding a postscript to my previous answer to you.

Mr Outram : Senator Carr, if something is bought online, of course, e-commerce is something that is of particular interest to us—and not just to us but to all our counterparts around the world; all the customs and border enforcement agencies around the world are watching very carefully what e-commerce is doing in terms of the volumes, and there are massive increases in volumes of commodities and goods coming to Australia; there is a lot of e-commerce. But they're not just coming in one way. They can come in surface mail. They can come in parcels. They can come in air cargo. They can come in sea cargo.

Senator KIM CARR: Sure. Australia Post has facilities in terms of importation of materials which you have access to. Is that the case?

Mr Outram : They have mail sortation facilities where we have officers permanently stationed.

Senator KIM CARR: The Victorian coroner handed down a report in December last year about the death in August 2015 of a person by the name of Danni Smith. The coroner found there that the department—that is, your department—had oversight and there was a systems failure. He ascribed that in terms of the department's failure to detect dangerous euthanasia drugs entering Australia. Are you familiar with that case?

Mr Outram : Deputy Commissioner Murray has a brief, as I understand it, in relation to that particular case.

Mr Murray : I can provide some detail about that.

Senator KIM CARR: Was there a test applied by the ABF officer to the item imported by Ms Smith?

Mr Murray : Firstly, it was obviously a very tragic incident, where we were working together with partners in that case, particularly the Victoria Police. A test was undertaken, and that initial test failed to identify the active constituent that was the subject of the coronial.

Mr Outram : You might just set out for the senator the things we've put in place since that coronial, because I know there are a number of measures that have been put in place since then.

Mr Murray : Following the outcomes of the coronial, the coroner made a number of recommendations, which we have fully complied with, and we provided a response to the coroner just last month. The critical point there, beyond when a mail stop was placed on what might be a suspect material, was to ensure that the ABF officers had the full detail of the context of why a mail stoppage might be required. On that first occasion, I think it's fair to say, as a result of the coronial, it pointed to the fact that the officers undertaking the test did not have the full information available to them. Since the incident that happened back in around August 2015—we didn't wait for the outcomes of the coronial—the Australian Border Force have put in new measures, to ensure, if there was a mail stoppage placed on suspect material, that the ABF officers would have that full detail.

Senator KIM CARR: Let's go back. It is put to me that the relevant officer applied a test to this particular product but it was the incorrect test. Is that correct?

Mr Murray : Not necessarily the incorrect test. If I could explain: on the occasion of 12 August 2015 the Australian Border Force undertook a test through—it's a form of capability; it's called the first defender. But, at that time, it did not contain testing capability for that particular active constituent, phenobarbital. Since that time, and immediately thereafter, the first defender substance catalogue was updated to include testing for phenobarbital.

Senator KIM CARR: Was it the case at the officer was not informed of what was required to be done?

Mr Murray : As I have attempted to explain, it wasn't the case that the officer wasn't informed of what was to be undertaken. The officer did not have the broader context of information for why the mail stoppage was placed on that address.

Senator KIM CARR: I see. Do you think that was, as the coroner found, a 'clear systems failure'?

Mr Murray : Not a system failure. No.

Senator KIM CARR: So the coroner was wrong?

Mr Murray : Not in the sense that it was systemic. What the coroner pointed to was that—

Senator KIM CARR: That's what he said, wasn't it? Is that an accurate quote? Did I quote it correctly? A 'clear systems failure'. What are you saying, that it's not a systemic failure?

Mr Murray : If I may refer to the outcome: the coroner in the coronial report said the Department of Immigration and Border Protection established processes to ensure that when a mail stopper is issued officers who examine items seized under the auspices of that mail stopper are aware of why it was issued. This would enable officers to focus their attention on known risks when examining items and select test and examination techniques that are appropriate to the risks. Therefore, I do not believe it was a systemic failure.

Senator KIM CARR: Okay, but that's not what the coroner said. He said, a 'clear systems failure'.

Mr Outram : If I could, a systemic failure and a systems failure are, I think, two different things. I would suggest that there is a breakdown in the system here that was applied in this particular individual case, and we fixed that, but I do not necessarily agree that that would be systemic, necessarily, across the entire regime that we've got in place to detect narcotics and other things to coming into our country.

Senator KIM CARR: Perhaps you can then tell me how this postal stopper process actually works?

Mr Murray : How it currently works?

Senator KIM CARR: Yes.

Mr Murray : In the case where we have information that may be from a partner agency, or from within the home affairs intelligence department or within Australian Border Force indices in our own holdings, a stopper may be placed on an address of interest. We have changed the process since August 2015. The details are known about the full context of why that mail stopper is placed. In the case of this very tragic situation it's fair to say the details behind it were that a potential recipient of that package may have been attempting to perform self-harm.

Senator KIM CARR: That's the point of why it's a systems failure, isn't it?

Mr Murray : As I've attempted to explain, I don't think it's a systems failure in its complete, but certainly there was a failure to provide the ABF officer undertaking the test with the full details and context of why the mail stopper was placed.

Senator PRATT: So they tested for narcotics but not for euthanasia drugs?

Mr Outram : I believe that's correct. Yes, I think that, of equipment that the deputy commissioner is referring to, we always have a catalogue that's fed into that electronically, so it knows what to look for. Constantly, we are getting new psychotic drugs and substance, analogues and synthetics, so that catalogue is actually evolving all the time. We rely a lot on our partners overseas for the information to create more code within that particular catalogue so he actually know what to look for and what to sniff out.

Senator KIM CARR: Are the findings of the review available to the committee?

Mr Murray : The colonial outcome?

Senator KIM CARR: No, your review.

Mr Murray : They're not publicly available, but we've certainly provided a response to the coroner to satisfy full implementation of the recommendation.

Senator KIM CARR: But you've launched a review into the postal stopper processes.

Mr Murray : We did, immediately after the event. We didn't wait for the coroner.

Senator KIM CARR: We understand that. You've made that evidence clear. Is that report available?

Mr Murray : It's an internal product. I'd have to take advice on that.

Senator KIM CARR: Take it on notice.

Mr Murray : I'll take it on notice.

Senator HUME: I'm now looking at this particular highlighter with a whole new level of suspicion. I went back to my office at lunchtime and heard the extraordinary news that you've uncovered 300 kilograms of ephedrine in highlighters, which I think is absolutely extraordinary. I don't know whether you want to mention that particular case.

Mr Pezzullo : We should comment on that, but, again, at the risk of incurring Senator Watt's wrath, only by inserting itself into supply chains, by detecting patterns of activity that are anomalous and by combining that with the human skills of officers can you ever hope to detect drugs in that series of quantities. Senator Watt and I perhaps need to have an ongoing dialogue about this and I need to improve my way of explaining to him how supply chain intelligence—

Senator WATT: I was only here for a little while. I certainly got under your skin, didn't I?

CHAIR: Mr Pezzullo, it's only you who keeps mentioning Senator Watt, not Senator Watt, and I'd ask you to desist.

Mr Pezzullo : Thank you, Mr Chairman. I'll of course follow your guidance.

CHAIR: Mr Outram, did you want to add to that?

Mr Outram : I just wanted to say that there are lots of examples like this of the great work that not only the Border Force officers do. Sometimes things go wrong, Senator Carr, but mostly we're getting it right. In this case, it was a close-held operation and a partnership with New South Wales police that led to that outcome, because, of course, detecting these things at the border is just one part of the story. You then have to get the evidence sufficient to prosecute the people involved. Within the Home Affairs construct, what we're looking to do now is move the fight offshore as much as we can, because there are obviously people in other countries involved in creating those highlighter pens and filling them up with, in this case, ephedrine, and other narcotics in other cases. So working with other countries is critical. Working with industry also is critical because the more we know about the industry supply chain and the more they share their data with us, the more we are able to identify the anomalies within their supply chains.

Senator HUME: Are you talking about deterrence measures as opposed to the work that you're doing at the border? Talk to us about the deterrence.

Mr Outram : I'd say more and more disruption. The deterrence is the criminal sanctions being imposed against people. That's primarily the deterrence we're looking for. Also, of course, if you take these commodities out of the supply chain, people are losing money. Things as simple as, for example, cancelling a licence or another country not letting somebody get on an aeroplane can disrupt criminality in quite significant ways. So we're looking at disruption in a broader context. We obviously don't lead the fight against transnational organised crime—the AFP do—but we very much want to support the AFP in that endeavour. We have a whole lot of capabilities in the Border Force, at the border, before the border and after the border, that we can bring to bear, whether they be in maritime border command, through our vessels on the ocean, through our officers at airports or through our officers in mail-sorting facilities, cargo facilities and field compliance teams, and we have airline liaison officers working in airports overseas. So we have a whole lot of ways that we can support the AFP in this fight against transnational organised crime. And, obviously, intelligence is the key to this particular operation succeeding.

Senator HUME: Obviously, that was an ingenious way of disguising the ephedrine. It was $120 million in street value, but you were talking earlier about the methamphetamine haul that was $1 billion in street value, which was quite extraordinary. Was that disguised in unusual ways similar to this? Is that something that you can speak about?

Mr Murray : On that occasion, the operation in WA, working together with other partners as part of the joint organised crime task force, was by maritime means. It was on a vessel, so there was no effort to disguise it by way of any complex concealment methodology.

Senator HUME: It's extraordinary—very brazen.

Mr Outram : Indeed. Look at the size of our coastline. It's obviously an area that we've got to be alive to. We have seen over the last two or three years a number of these either small vessels or larger vessels, in fact, bringing narcotics across, whether it be from the Pacific or from the west, to Australia. So it comes not only through air cargo and sea cargo and with passengers on aeroplanes and cruise ships and with crew of all of the above but also on vessels like this.

Senator HUME: We're hearing more and more about the seizures that are taking place thanks to the Border Force and the AFP and other agencies. Are we hearing more about it because there is more coming in? Are we hearing more about it because what you're doing is more effective? Where does the balance lie?

Mr Outram : That's hard to say, but I can tell you that, this year to date, we are about 150 per cent up in terms of total weight of seizures of narcotics at the border compared to this time last year. That's by weight. Unfortunately, Australia is a very lucrative market for narcotics suppliers. There's a high demand, therefore. You may be aware of the ACIC, the Criminal Intelligence Commission's, wastewater analysis, which sets out what that drug market looks like from the point of view of domestic consumption. It's quite a worrying picture, particularly with methamphetamine, I have to say, and the harm that that narcotic does, but there are others too, including fentanyls—there are a whole range of things that are coming at us. It's driven by the market demand and the price that these criminals can extract from the market here in Australia. That's part of the problem.

Senator HUME: Are you seeing a trend towards a particular illicit substance? Is it more methamphetamine than other substances?

Mr Outram : Methamphetamine's been rising steadily, I would say, in terms of the volumes we're seeing at the border, but, over the last couple of years, MDMA's seen a resurgence. You see fluctuations over years. Something might happen in another country—for example, a few years ago there was a heroin/opium drought because of a lot of enforcement action that was taken overseas. I think that MDMA, or ecstasy, has seen similar responses to actions taken in Europe, primarily, to suppress the supply of that out of source countries.

But what we see at the border, obviously, is those fluctuations over time. That is why I think the Criminal Intelligence Commission wastewater analysis is a valuable piece of work going forward, longitudinally, because we will get a sense of the consumption patterns of the various different drugs in various different states across the country over time. Then you can start to map that against the effectiveness of your ability not only to suppress supply but also to suppress demand.

Mr Pezzullo : Both the effluent work that ACIC does and other indicators that we have, including in terms of our classified intelligence programs, would lead us to conclude that in some parts of Australian society there is an unabated demand for illicit drugs for different types of hits—for different types of, shall we say, narcotic experiences. That is regrettable. Some sections of our society are into risk-taking behaviour. Some of the most dangerous cartels in the world recognise this. They are increasingly targeting this market because the margins, just in straight commercial terms, are attractive. Were it not for the efforts of the Australian Federal Police and the Australian Border Force, I don't know where we would be. But I think as a nation we need to have a very serious conversation about how to deal with this problem that, notwithstanding the efforts of our heroic frontline officers, potentially has the capacity to get away from us unless we engage in both traditional policing, that I referred to earlier in my opening statement, and very advanced techniques, which I also referred to. It is a constant struggle. Unless you are continually, in a sense, disrupting your own model, building new operating models to stay ahead of where the criminals are going, it is going to be a forlorn task. The bottom line is this: the most dangerous criminal cartels in the world are in surplus. Most advanced—

Senator MOLAN: Are in what, sorry?

Mr Outram : Surplus. Cash. They have—not quite unlimited—very deep pockets. Regrettably, those who are fighting them—the defenders of our community—work within the strictures of government operations where, typically across the Western world, governments are in deficit. So we're up against a well-cashed and well-resourced adversary. Unless we are willing to, in a sense, like every sector of the economy and society, disrupt our own way of thinking about how we go about the business, we will be fighting a losing battle. Thank God for the AFP and thank God for the Australian Border Force and the frontline officers who do so much to protect us.

Senator MOLAN: What is the manpower size—the personnel size—of the Border Force?

Mr Outram : Approximately 5,500.

Senator MOLAN: How many of those officers are trained to be armed or are armed at any one time?

Mr Outram : I might just have to come back to you quickly on that. I do not have it to hand. It is not all of them, by any means. In terms of officers who are fully use of force trained, around a thousand.

Senator MOLAN: Thank you. It follows on from the previous question, really. You mentioned that you are 150 per cent up by weight this year so far in relation to previous periods. I wondered how you express the success that you have in conducting all your functions. How can you assure us that generally you are doing better, or doing worse? Can you link extra manpower to extra results et cetera? How do you as the Acting Commissioner manage that?

Mr Outram : There are a number of ways that we try and measure what we are doing and the success of what we are doing. But ultimately in terms of deterrent effect these things are hard to measure. We can measure how many containers we open. We can measure how many parcels and packets come through the mail we open. From those we can measure how many lead to an inspection and from that we can measure how many of those lead to a detection. Then we can measure by weight what that amounts to in terms of illicit tobacco, illicit drug types and illicit commodities. So we can measure by weight and then the volume of detections what success we are having.

If you then take that to the next level, though, to the secretary's point, about saying 'How is that affecting the drug market in Australia?', that is a much more complex problem. There are obviously a lot of universities and a lot of other countries in the world that are looking at that sort of measurement. That's why I point to the ACIC wastewater analysis as being at least one potential input to allow policymakers and others to have a look at the effectiveness of various program elements around suppressing supply.

Senator MOLAN: Can you relate that survey to your actions?

Mr Outram : It's too soon yet. The ACIC have only been providing that report, I think, for just over 12 months. I think you'd need to see that run over a period of time to be able to extrapolate it in that way. I would expect that over time we will be able to do that. Of course, the price of narcotics is another potential input and monitoring the price. A lot of other organisations, particularly the AFP and the ACIC, do that; they monitor the street prices. You would expect that if we're being effective at the border the price would remain high, and the price is pretty high in Australia.

Senator MOLAN: Thank you.

CHAIR: I can come back to you later if you have more, Senator Molan. I am going to go to Senator Carr again now.

Senator KIM CARR: I want to go back to this issue of the postal stop of processes. Is it possible that you could indicate to the committee in each of the last five years how many attempts to import euthanasia drugs have the department stopped?

Mr Outram : We can provide that for you on notice. I don't think it would be very many.

Senator KIM CARR: We clearly have an example here with regard to Ms Denny Smith, where there was a failure to stop the importation. Are there any other incidences that you're aware of?

Mr Outram : Not that I am aware of, but we'll check for the record and to be doubly sure.

Senator KIM CARR: In response to this incident, and the coroner's report, has there been any additional resources applied to the screening of postal items?

Mr Outram : In general, postal items?

Senator KIM CARR: Yes.

Mr Outram : We have a finite number of resources, as you would know. We have an ASL cap like everyone else. We examine and screen a lot of items coming in in the mail. We have officers permanently stationed at the mail sortation facilities in Sydney at Clyde, down there at Melbourne near the airport and up in Brisbane. They're the three main places where the mail comes into the country, and to an extent over in Perth. Officers are permanently stationed there. I can let you know how many officers we have in those facilities. We can take that one on notice.

Senator KIM CARR: Yes, if you could please. I'm interested to know what changes have occurred as a result of this incident. Have there been any changes?

Mr Outram : Yes. In relation to that particular incident, as the deputy commissioner said, when there is a stopper on, now officers get more contextual information about why. If the equipment they've got for some reason hasn't got that particular drug type, or synthetic or whatever it is, loaded into the screening equipment, they at least know they need to take it to the next step. It's only a presumptive test. It isn't a test that's definitive in terms of saying it's a narcotic or it's prohibited. It's a presumptive test. We now give them more contextual information in order that they can make a decision about—

Senator KIM CARR: More discretion for the officer?

Mr Outram : More discretion to escalate and to take it further.

Senator KIM CARR: Okay. That makes sense. The training processes that have been in place have been improved, and you've explained how that's happened. You're not really able to tell me if there's been any additional resources allocated to postal services?

Mr Outram : We haven't significantly amped up the resources in that particular business line, because we have to split ourselves between screening mail, cargo, air cargo, sea cargo and passengers at airports; running detention centres; and doing investigations, compliance operations and Maritime Border Command. So we have to apportion our resources according to priority and threat. It's not as simple as just putting more people into the mail, because if we do that we've got to work out what the implication is for other threats. While I've been in either the deputy commissioner's role or the acting commissioner's role I have not increased the amount of resources available to our mail operations.

Senator KIM CARR: Is it possible then, over the last five years, to indicate what the budgetary allocation has been for the screening of postal items?

Mr Outram : I can do that. I can also add to that the number of items that we have screened.

Senator KIM CARR: Yes. That would be good.

Mr Outram : And, of those, the percentage that have led to an examination, and those that led to a detection.

Senator KIM CARR: I would've thought, given the growth in online sales, that there would have been an increase in the number of parcels coming into the country.

Mr Outram : It is an exponential increase.

Senator KIM CARR: Yes. And that's where I started this line of questioning concerning the students at Saint Stephen's College—

Mr Outram : I will approach that in a different way. We've talked about the volumes of mail, of cargo and of people, and those exponential increases across the board. So stopping more parcels and searching them; stopping more containers, opening them, tipping them out and searching those; and stopping more passengers isn't the answer. We're never going to have enough officers to do it that way. So with the mail, for example we've been working with Australia Post. We're also working with the World Customs Organization, the Universal Postal Union and our border force partners to see if we can't get a mail system where we get advance data. For example, if we were able to get more information out of the mail system around who's sending parcels and packets to Australia, where they're sending them to, the description of what's in them and the actual weight of them, and we could inject ourselves into the sortation process of Australia Post, then we could far improve our strike rate without necessarily having to significantly increase the number of people we've got. So intelligence and data is a big part of this equation.

Senator KIM CARR: I understand your argument but the practical effect needs to be examined as well.

Mr Outram : Yes.

Senator KIM CARR: You're only too happy to talk to us about the increase in seizures of illicit drugs. We have an exponential growth in parcels coming into the country. You've indicated that. But we have examples here of students being poisoned by drugs coming in through the post. It would appear the TGA has not told you about this poison till it's too late. Would that be a fair description?

Mr Outram : I don't know if that's a fair description or not. I'd have to go back to 2015 and see what the actual chronology of—

Senator KIM CARR: That was certainly the case with regard to the school on the Gold Coast. The event occurred in February and the poisons ban was put on on the first of that month. Were you told about it?

Mr Outram : I'd have to check whether we were told about that particular substance in advance.

Mr Murray : Senator, I do not have an exact response to that but I did explain that under the new psychoactive substance provisions it's fair to say that organised crime and those who are supplying these forms of illicit drugs constantly change the analogue structures—

Senator KIM CARR: I'm not saying to you that you don't have to be clever about it. But we need to know whether our bureaucratic responses need to be clever as well. If the TGA has found the importation of this poison, this drug, that's not registered and has been picked up by students, seven boys aged 14 and 15, and they can get it through the mail, I would have thought you'd be entitled to know about that.

Mr Outram : Absolutely.

Senator KIM CARR: Were you told, or not?

Mr Outram : I will have to take that on notice.

Senator KIM CARR: If you were told and these boys were poisoned, we'd be entitled to ask you why you didn't stop the stuff.

CHAIR: That's being taken on notice.

Mr Outram : Senator, you are right. We will take that on notice. We have a lot of information and intelligence coming in to us about a whole range of new substances—psychoactive substances, synthetic substances, drugs—all the time. It's our job to keep ahead of that and keep on top of it.

Senator KIM CARR: That's right. It was listed on 1 February but I think you indicated that you were advised in September that this product—

Mr Murray : The evidence was that I understand that TGA had taken an interim measure as early as September 2017. The detail I don't have is our ability to add that into our catalogue for—

Senator KIM CARR: This event occurred on 21 February this year.

Mr Outram : To be clear, though, Senator, I'd be keen to go back and look at why this was missed. If we knew about it, it doesn't necessarily mean that we'd find it. There are two separate questions—just to be clear.

Senator KIM CARR: I accept that detection is another issue.

Mr Outram : There is a question I am taking on notice about whether we knew and when we knew, and that is fair enough. My point is that, even had we known, the fact that we know that something is a prohibited import does not necessarily mean we'd find it.

Senator KIM CARR: I understand that. But I'm going to the question about your surveillance techniques. That's why I asked a series of questions about a previous incident regarding this Danni Smith who died. You've indicated that there was a failing. The coroner found—

Senator MOLAN: Was that the euthanasia case?

Senator KIM CARR: That's right. I've asked you a series of questions on that matter. You've indicated an exponential growth in this area of materials coming into the country. I want to know whether the resources have been applied to deal with this. Let me go to another example.

Mr Outram : Senator, there's been significant investment in resources, for example in relation to the X-ray screening technology that we use at the mail sortation centres. So there have been investments. We'll set all that out for you.

Senator KIM CARR: All right. Tell me this. On 16 August 2017, bomb components were successfully imported to Australia via post. Are you aware of that incident?

Mr Outram : I'm aware of what you're talking to. That wasn't by post. That was by air cargo.

Senator KIM CARR: So that's not post.

Mr Outram : No.

Senator KIM CARR: I'm told that the Prime Minister stated at a Home Affairs portfolio briefing, 'I've asked the Minister for Immigration and Border Protection, Mr Dutton, to undertake further work on cargo passenger security and screening at airports.' What further work has actually been undertaken as a result of that direction from the Prime Minister?

Mr Outram : I'll talk from Border Force, because clearly the Federal Police and the Office of Transport Security all have a role here. I'll confine my comments to that of the responsibility of Border Force.

Senator KIM CARR: I presume you would handle that job from the Minister for Immigration and Border Protection. Would that come down to you?

Mr Outram : Indeed.

Mr Pezzullo : If I may, it is divided into two parts, all within the department. Border Force is the at-border agency and then the other transport security measures—the screening et cetera—fall to another group in the department. Mr Grigson and his team are here and they can assist as well. Perhaps we might start with the Border Force component of the response.

Mr Outram : From the Border Force side of things, we increased real-time assessments, activity and passengers, including an increase in the number of our counterterrorism unit officers on the ground. We increased the presence of uniform and armed Border Force officers at international airports. We jointly coordinated the trials with the Federal Police at the major international airports. We increased our ABF detector dog units deployed to international airports and air cargo as well. We undertook saturation activities for outbound air cargo and also for inbound air cargo. During that time we detected no travellers or items of interest relevant to the incident to which you're referring. We still, to this date, have increased and maintained the increased level of screening of international mail and air cargo from high-risk countries of origin.

Mr Pezzullo : That is the at-the-border protection. The transport security regulations and techniques all fall to Mr Grigson and the Office of Transport Security under Ms Wimmer, so I might hand over at this point to Mr Grigson.

Mr Grigson : We work very closely with Border Force, of course. One of the advantages of the integration with Home Affairs is we work even more closely now. After that incident, the government asked the Inspector of Transport Security to review security across Australian airports, and we're now looking at these recommendations. We introduced a number of changes in the immediate aftermath, but we're also now looking at other changes we can make in a long-term. I'll ask Ms Wimmer to go to those.

Senator KIM CARR: I see. Can we get access to the procedures advice manuals or the guidelines for ABF officers used in the detection of illicit drugs, for instance?

Mr Pezzullo : We're going back to Border Force.

Senator KIM CARR: I've asked the same question. The officers here have been asked to deal with this matter. I would like to see what practical matters have been taken. What can you show me in documentary form that you have done?

Mr Outram : I can certainly share with you information about our operational practices. I just need to be careful that we don't get into disclosing operationally sensitive information.

Senator KIM CARR: I accept that. I'd like to see what changes you've made and what you can do without breaching security.

Mr Outram : I'll include information about additional investments that were made, particularly in screening technology during that time.

Senator KIM CARR: You've taken that on notice. What I really want to know—

CHAIR: We might leave it there.

Senator KIM CARR: I can finish this line of questioning pretty simply and you can assure this committee that you can now meet your statutory obligations as a result of these chambers. In terms of the procedures we just outlined—the failures that we've outlined here—you're confident the department can meet its statutory obligations in protecting Australia's borders.

Mr Pezzullo : If the burden of your question relates to the enforcement of the Customs Act, the Border Force commissioner can speak to that.

Senator KIM CARR: Are you adequately resourced?

Mr Outram : Yes. As I said to you, with the people we have, we are postured to the optimum in terms of dealing with the threats that are coming at us not just through air cargo but from mail, airports and all the other operations we have to conduct. With the intelligence capability that has been established within what was the Department of Immigration and Border Protection and is now Home Affairs, we are doing as much as we can around enhancing the performance of our profiles and works that we put into the system which informs our people about which things they should be worried about.

If you're asking me, 'Are there no further improvements that can be made?', the answer is, well, of course we are constantly seeking to improve how we do things. We're part of a global supply chain so we have to work with industry, we have to work with the Universal Postal Union, we have to work with the Customs organisation—a whole range of our organisations—to try and improve. There are two things; there is how we improve facilitation, the movement of people and goods, on the one hand; and, at the same time, how we actually get better at weeding out the people and the things that will do us harm. To do that, we need more data and we need more artificial intelligence based systems. It is not all about just putting more people on and opening more containers.

Senator KIM CARR: Okay. And—

CHAIR: Thanks, we will have to come back to you—

Senator KIM CARR: Can I just—

CHAIR: No, Senator Carr. You have important questions, but so does every other senator—

Senator KIM CARR: It's a simple question.

CHAIR: and they all want their time. So, no, you're finished. Senator Molan is next. And can I just indicate we will then be going to afternoon tea when Senator Molan finishes and we will come back to you, Senator McKim, then to Senator Hanson then to Senator Leyonhjelm. So you can work out, with 10 minutes each, when you will be needed and when you won't be.

Senator MOLAN: Chair, I may not go a full 10 minutes but—

CHAIR: That will be fine.

Senator MOLAN: I have two very quick questions, Acting Commissioner. Do you in fact express the volumes of checking that you do? It would seem to me that, if you say you only check a percentage of such-and-such, then you're inviting problems to go into certain areas. So how do you express that?

Mr Outram : These are actually expressed in the annual report. So, for example, in terms of passengers, we report in the volumes that we deal with passengers, but also the time it takes to facilitate them through the border. In terms of air cargo, it is the number of consignments received, and the number of the total of those received that we inspect. So, for example, in 2016-17, 41.88 million cargo consignments were received. Of those, we inspected 2.01 million, or 4.8 per cent. Of those inspections, 3.6 per cent, or 72,463, led to an examination. And, of those, 4.3 per cent, or 3,103, led to a detection. So we do express what we do in those terms, and across a whole range of things—obviously air cargo and sea cargo and other things. But we also then break it down into what we detect in terms of illicit tobacco, methamphetamines, ecstasy, cannabis, cocaine, heroin, et cetera.

Senator MOLAN: Can I be sent a copy of your annual report, please?

Mr Outram : Indeed.

Senator MOLAN: I should have it. The second question I think is fairly simple. I'm fully aware that euthanasia drugs going through e-commerce is increasing. There have been articles in the newspaper about it, and stories about people doing it. But surely there is a link between the number of coroner's reports that we get and the number of—or you can make decisions between the number of coroner's reports that say that a euthanasia drug was used and your success in pulling certain of those drugs off? Have you been able to link any of those two? Senator Carr brought up one example there, and I wondered if there were many other examples of the coroner coming out and saying euthanasia is common or not common?

Mr Outram : I'm not aware of any other cases involving euthanasia drugs, but in general our officers rely on intelligence to guide them to interdicting with particular parcels or consignments that are of concern. The more information we therefore get from the supply chain, in terms of our air cargo, sea cargo and mail, and the earlier we get that information, then the better it is for our intelligence practitioners to understand, for example, 'Are there anomalies in that that we should be worried about?' Is there a historical element, for example, looking backwards—'Oh, we've seen this before'?—or linking it with other intelligence that we might have. That then leads to a profile or an alert being put on the system that our officers respond to. So it is an entire system. To improve that system, what we get in terms of data through the air cargo system versus data from the sea cargo system is very different. We are working, for example, with partners—DHL, FedEx, UPS—to see if we can't get more data out of the air cargo system from those freight forwarders earlier in the piece and more information data to make our job easier.

Senator MOLAN: And do you see an increase in reported euthanasia cases in Australia?

Mr Outram : I have not seen an increase, nor have I seen an intelligence product that says, yes, there is an increase. There are other drugs that are worrying us at the moment, like fentanyl. They are incredibly potent narcotics.

Senator MOLAN: Is that a euthanasia drug?

Mr Outram : No, it's not. Fentanyl and its derivative carfentanyl are highly toxic. Carfentanyl is 5,000 times the toxicity of heroin, or the effects of it are 5,000 times more potent.

Senator MOLAN: Okay. Thank you.

CHAIR: Senator McKim, do you want to go for 10 minutes now and we will have a break for afternoon tea at twenty past?

Senator McKIM: I'm going to go to the matters I was trying to raise this morning around the closure of the Manus RPC. Just to confirm: it was Australia's decision to cut off the food, the medication, the drinking water and the electricity for over 600 people at the Lombrum RPC?

Mr Pezzullo : We work in close consultation with our PNG partners, and they make all the principal decisions. Deputy Commissioner Newton, who assists me in these matters—not as an ABF matter of command and control but to assist me with operational support—can amplify that answer.

Senator McKIM: Before Deputy Commissioner Newton does that—

Mr Pezzullo : The answer is no.

Senator McKIM: Whose decision was it?

Mr Pezzullo : Those facilities are all under the jurisdiction of the government of Papua New Guinea.

Senator McKIM: In fact, all of the contracts were with your department, were they not?

Mr Pezzullo : In support of those competent authorities—that's right. We've gone over this many, many times. The Australian government made a decision to support the two relevant jurisdictions—the government of Papua New Guinea and the government of Nauru—

Senator McKIM: I'm just asking about Manus Island.

Mr Pezzullo : So we'll limit ourselves to Papua New Guinea. That agreement dates back to 2013. Pursuant to the relevant agreement, Australia provides—you are right in suggesting—contracted services. Those contracted services are provided in support of a sovereign nation that then manages those facilities.

Senator McKIM: We'll come back to that, because I don't want to get hung up on that, but, when you last appeared before this committee with Ms Newton, the committee was assured that the new facilities would be ready by 29 October, but they weren't, were they?

Mr Pezzullo : They were sufficiently ready, I think, Deputy Commissioner Newton?

Senator McKIM: They weren't ready by 29 October, were they, Ms Newton?

Ms Newton : Those facilities were ready to take all available people that wanted to move into the facilities by the 31st.

Senator McKIM: If, as the Australian government wished, all of the men had left the Lombrum RPC, there would not have been room for them in the new facilities, would there?

Ms Newton : There would have been suitable accommodation made available to every one of those people that moved into the facilities.

Senator McKIM: Was West Lorengau House ready to go on the 29th, as the committee was assured it would be last time?

Ms Newton : Parts of that accommodation were ready for people to move into it on the 29th.

Senator McKIM: In fact, it did not have water connected on the 29th, did it?

Ms Newton : That's not correct.

Senator McKIM: So the UNHCR is wrong?

Ms Newton : There was water connected to a range of the facilities at that location on 29 October 2017.

Senator McKIM: Was electricity connected to that centre—to all of it?

Ms Newton : Yes. There was electricity available at a number of the facilities at that location.

Senator McKIM: West Lorengau House?

Ms Newton : West Lorengau House.

Senator McKIM: Was the whole of West Lorengau House wired up and had the power on?

Ms Newton : It wasn't at that time.

Senator McKIM: No.

Ms Newton : We provided advice at last Senate estimates that that wasn't anticipated until after the 31st—

Senator McKIM: No. I'm talking about 29 October.

CHAIR: Senator McKim, it'll help if you let the commissioner finish her answers before you interrupt. Please, Deputy Commissioner.

Ms Newton : There was sufficient accommodation at East Lorengau Regional Transit Centre, at Hillside Haus, as well as West Lorengau, for all of the people accommodated at the regional processing centre.

Senator McKIM: I'll just quote to you from the United Nations High Commissioner for Refugees report released on 2 November last year:

If all 600 individuals were to leave immediately—

I'll pause there and say they're obviously referring to the men who were at that stage still at the Lombrum RPC after Australia had ordered the cut-off of food, water, medication and electricity. I'll start again:

If all 600 individuals were to leave immediately, many would not find adequate or sufficient accommodation elsewhere.

Was the UNHCR right or wrong when it said that?

Ms Newton : They were wrong. PNG had suitable accommodation for every person that chose to leave the centre.

Senator McKIM: Where would those 600 have been accommodated, in your view?

Ms Newton : At the three locations that I've just articulated.

Senator McKIM: So West Lorengau, Hillside and East Lorengau?

Ms Newton : That's correct.

Senator McKIM: You have previously given evidence about East Lorengau. Could you just refresh the committee's memory about how many people that could accommodate.

Ms Newton : Normally, on a full-time basis 440. There was also an ability to have additional people accommodated there, if required for short-term arrangements.

Senator McKIM: But that was not a sustainable solution, was it?

Ms Newton : It wasn't required.

Senator McKIM: No, but if it had been it would not have been sustainable, would it?

Ms Newton : There was no requirement for a sustainable solution of accommodation there, because accommodation was available on 31 October.

Senator McKIM: This will go much more quickly and easily for everyone if you actually answer the questions you are being asked.

CHAIR: Ms Newton is answering the question very precisely.

Senator McKIM: She is not.

CHAIR: Very precisely.

Senator McKIM: I will ask it again, and we will see what answer we get. To move to that contingency number—can you just remind me what it was, Ms Newton, the higher number of the two you have just given?

Ms Newton : It was not a contingency. The full-time capability of East Lorengau was 440, plus the ability to be able to accommodate further people short term if required.

Senator McKIM: That's right. I'll call it by your language, then—short term. It was not sustainable in the long term, by definition, was it, Ms Newton?

Ms Newton : It was never intended to use that accommodation in the long term—

Senator McKIM: That is not the question I'm asking you.

Ms Newton : because suitable accommodation was available at the other two facilities at West Lorengau and Hillside Haus.

Senator McKIM: Please answer the question.

Senator Fifield: Chair—

Senator McKIM: Minister, if you don't mind.

Senator Fifield: I am directing my comment to the chair.

Senator McKIM: I want the questions answered.

Senator Fifield: Chair, I just should make the point that it is really not fair to witnesses if a senator seeks to provide a witness the form of words that they would like a witness to use. Witnesses answer questions in their own way, in their own words, and I don't think Senator McKim's approach is reasonable.

CHAIR: I can't direct Senator McKim's approach, but the Deputy Commissioner has given very precise evidence, and any fair person listening to this would understand it. Clearly, Senator McKim apparently doesn't. Senator McKim, it's over to you. It's your questioning.

Senator McKIM: Thanks. I will just try again. Would your short-term number have been sustainable in the long term?

Mr Pezzullo : A short-term measure, I suppose, of the picture is not long term, by definition.

Senator McKIM: By definition.

Ms Newton : No. By definition it is not in the long term.

Senator McKIM: Thanks, Mr Pezzullo! I appreciate that! So short term is not long term?

Ms Newton : That is correct.

CHAIR: It is very clear to even me.

Senator McKIM: Thank you. I appreciate, finally, an answer to my question. That is good. We can move on. What advice, and from whom, was the department receiving about the readiness of the alternative accommodation facilities?

Ms Newton : The contract providers that were managing the sites.

Senator McKIM: Who were contracted to the department.

Ms Newton : That's correct.

Senator McKIM: Minister Dutton said in the SMH on 8 November that all of the alternative accommodation on Manus Island was complete. Is that correct?

Ms Newton : On which date?

Senator McKIM: On 8 November. Was all of the alternative accommodation on Manus Island complete on 8 November?

Ms Newton : Yes, it was, to actually accommodate every person that moved from the regional processing centre.

Senator McKIM: That is not the question, again, Ms Newton. Was all of the alternative accommodation complete?

CHAIR: I think you have answered that.

Senator McKIM: No, Ms Newton has said it was complete just in order to accommodate all of the people. That is not the question. The question is: was all of the alternative accommodation complete or not on 8 November?

Ms Newton : Accommodation was available for every person that moved from the original processing centre to East Lorengau to Hillside Haus and to West Lorengau. West Lorengau still had further works being undertaken in another part of that facility that would provide additional accommodation, if required, to other people.

Senator McKIM: So why did over two dozen refugees have to sleep in the open on the first night after they were beaten out of the Lorengau RPC with metal rods by the notorious Papua New Guinean mobile squads? Why did they have to sleep in the open?

Mr Pezzullo : I don't know that we should accept the premises of the question, the way he has put the question.

Senator McKIM: Why did they have to sleep in the open, the first night after they left Lorengau RPC?

Ms Newton : I'm not aware that any person did sleep in the open. Accommodation was made available for a number of people where residents or refugees or non-refugees chose to lock the doors of the rooms they were in and not share their accommodation where there were two people able to be accommodated.

Senator McKIM: Did the Papua New Guinean government or any part thereof notify the department that they intended to go in and beat refugees with metal rods to get them out of the Lorengau RPC? I can provide you with links to the footage. It's all over YouTube if you want to see it. It did happen. It is beyond argument that they were beaten with metal rods.

CHAIR: What's your question?

Senator McKIM: My question was the one I just asked: did the Papua New Guinean government, or any part thereof, notify of their intention to do that?

Ms Newton : The Australian Border Force had no involvement—

Senator McKIM: That is not the question.

Ms Newton : in any of the removal of residents of the regional processing centre and were not involved in any of the decision-making.

Senator McKIM: That was not the question, Ms Newton. The question was: did the Papua New Guinean government, or any part thereof, notify your department of its intention to do that?

Ms Newton : Papua New Guinea advised the department that it intended to remove people from the centre.

Senator McKIM: Okay. Thank you. When did that happen?

Ms Newton : On 23 November.

Senator McKIM: Okay—

CHAIR: Okay, that might be a good chance and place to stop.

Proceedings suspended from 15:21 to 15 : 35

CHAIR: We'll resume the hearing of the Legal and Constitutional Affairs Legislation Committee's inquiry into additional estimates for 2017-18. We're dealing with outcome 1 and programs 1.1 to 1.9 together, principally Border Force. I'll go to Senator Hanson.

Senator HANSON: There have been comments about drugs coming into the country via all forms—cruise ships, foreign vessels and fishing vessels, which are a big problem. Are they coming in on foreign fishing vessels in our waters?

Mr Pezzullo : Small craft importation is certainly a problem, I know, that's on the department's mind but, more specifically, it's on Border Force's mind. The acting commissioner is at the table, so I might ask him to respond. Are you talking about small craft?

Senator HANSON: No, I'm talking about foreign fishing vessels that may be—

Mr Pezzullo : Acting Commissioner, drugs in particular.

Mr Outram : We've only had one or two incidents of foreign fishing vessels—in fact, we've got one in Sydney Harbour, as we speak; it's detained there—bringing narcotics into Australia. It's not an endemic or a huge problem, but it's a threat that were alive to and we're on the lookout for. We have a number of other small craft—yachts, for example—bringing narcotics into Australia, so it's not just fishing vessels; there are a range of different types of vessels that we're worried about. I wouldn't say there's a particular problem with regard to fishing vessels.

Senator HANSON: The government is looking at reducing marine park zones around the country and is in negotiations with foreign countries to allow foreign fishing vessels into Australia. Can you see that this might be a problem down the track?

Mr Pezzullo : We're not responsible for marine park—

Senator HANSON: If they're going to allow fishing vessels in, it could be. We're talking about large areas and, if you're having trouble with surveillance now, it's going to be an added problem for Border Force.

Mr Pezzullo : I see what you're saying—my apologies, Senator.

Mr Outram : It would potentially depend on the system that we build around that and whether they have to declare when they're coming, whether we're able to track them by satellite—we can monitor who's coming and going—and whether information about who the crew are and the owners are of the vessels. So, it would very much depend on the scheme that's in place and what information we can get as to how we can manage the risk.

Senator HANSON: You made a comment about high demand in Australia. Are the penalties for drug trafficking here severe enough compared to other countries?

Mr Outram : The penalties for commercial supply of narcotics are pretty severe. The question is: who do you apply them to? Obviously, most narcotics that come to Australia come from another country, and there are people in other countries—Central and South America, up through China into the Mekong, and Central and West Africa—that you'd like to see penalties being applied to. If we constantly deal with people in Australia who are lower down the supply chain, I think the penalties are pretty severe to be honest with you. When you look at the penalties the courts impose, they are pretty severe. However, if you look at the system, it's: how effective are we offshore, working with partners in other countries to disrupt the supply upstream through disruption activity offshore and leveraging, of course, the laws and the capabilities of other countries? There are complexities—and the AFP, primarily, have the lead in this, I should say—about whether the other countries have death penalties and those sorts of things that we have to take into consideration.

Senator HANSON: In today's papers there's an Iranian couple plus another Iranian who have been picked up peddling quite large amounts of drugs. They're asylum seekers who came here in 2013. If they're convicted, they may face deportation or end up in our prison system. Are you aware of the laws in Iran and if they can actually be sent back? Is this a problem?

Mr Outram : Yes. Generally speaking, Iran's a difficult country to involuntarily return somebody to. There have been a number of conversations, I know, between the Department of Foreign Affairs and Trade and Iran about that. It's difficult for us to return people involuntarily to Iran, or without travel documents and those sorts of things.

Senator HANSON: Are there other countries as well as Iran?

Mr Outram : Yes, there are. Other countries can be difficult to get people back to—not impossible, but difficult—like Afghanistan and Pakistan. There are a range of other countries where we have to go case by case, make our case to the other country and see if we can't effect an involuntary return. Returning people voluntarily is much easier when they've got travel documents. We have a team called a removals and returns team. All they do is engage with other missions here in Canberra to try and secure travel documents and try to put in place arrangements to return overstayers, and people who have breached their visa conditions, to other countries. Sometimes it's pretty seamless with some countries, and other countries are more difficult.

Senator HANSON: I want to ask—I don't know if you can answer this question—about foreign fighters, ISIS, and when they come back to Australia. Mid-last year was the female whose husband died fighting with ISIS—

Mr Pezzullo : I'm terribly sorry for interrupting, but Border Force has got a particular role to play. If you would like an answer on returning foreign fighters more generally, I would ask Mr Sheehan to come forward and assist me in dealing with that matter. Border Force plays a particular role at the border with a whole number of agencies that are involved in managing the return or, indeed, non-return of foreign fighters. Mr Sheehan is the Commonwealth Counter-Terrorism Coordinator.

Senator HANSON: I'll just ask a question of Border Force first. Can you explain to me about the Trusted Trader program? How does it work?

Mr Outram : The idea is, to become a trusted trader, these companies need to go through an accreditation process with us. We evaluate their supply chain, integrity and security, and their recruitment practices and processes. It's really about the integrity of their operations, and there's a standard.

Senator HANSON: Are they actually in the country themselves?

Mr Outram : They're Australian companies that are exporters or importers. It's primarily aimed at exporters. If you become a trusted trader—and I should say up-front that this is a part of a World Customs Organization initiative to do with what they call authorised economic operators. The idea is that if two countries have trusted traders, or AEO programs, and recognise each other's programs—so we're satisfied that country A has the same level of governance, audit assurance and risk mitigation that we do—then what happens is that the traders become trusted and accredited, and you can set up a secure trade lane. That means they can trade more quickly and there's less red tape at the border for them. Of course trust is not fixed forever in time, so we put in place processes to make sure that they retain trust.

The advantage here is that companies that are attracted to the program get a competitive advantage because they get less red tape and they can trade more quickly; there are a number of benefits and advantages to them. We have people here from the program who can give you far more detail than I can. But, if you think about it, it incentivises businesses to design integrity into their supply chain and to design out some of the risks we were talking about in terms of how does organised crime infiltrate the supply chain, because, at the end of the day, that's how they get things into the country—they're infiltrating the supply chains. It's to incentivise companies to do the right thing.

Senator HANSON: If you've got a company that doesn't go through the Trusted Trader program, and they've imported drugs into Australia, do you then stop allowing them to further import into the country? Are they banned from then on?

Mr Outram : No, we can't impose a blanket ban on companies for importing. What we can do—if it's, say, a customs broker who does the wrong thing—is remove licences. If company directors are convicted of criminal offences, then they can lose their directorships. There are other organisations, like ASIC, that can take regulatory action against companies that are doing the wrong thing. But we don't have the ability to prevent a company per se from issuing permits to import just because they, at one point in time, have done something incorrectly. I could probably get one of our colleagues in the department, if you want to get more detail about the regime that we put in place.

Senator HANSON: No, that sounds good. I'll just ask Mr Sheehan about the foreign fighters. Those ones who are actually coming back into the country: how many have been allowed back in?

Mr Sheehan : Around 40 people have returned to Australia after travelling to Syria and Iraq. Of those, the majority returned before the establishment of the so-called caliphate, and the rest have returned since that time.

Senator HANSON: The female who was returned about mid last year—and I can't give her name—with a child: was she solely an Australian citizen, or did she have dual citizenship?

Mr Sheehan : I can't comment on the details of individual cases. I can confirm that a woman and a child returned last year, but I can't comment on the detail of individual cases.

Senator HANSON: Have we got further requests from other people wishing to come back into the country at this moment?

Mr Sheehan : My role is not operational, so I'm not aware of such contact. It would be a question for operational agencies as to whether there's any detail at all that they can give you.

Senator HANSON: Can you tell me how many people are under surveillance at the moment to do with acts of terrorism or threats of it coming from them?

Mr Sheehan : I'm not able to, and I'd make the point that even if I had such detail I think you'd agree that it's the sort of information we would not want made available publicly to those who might be under surveillance. But if it's helpful, I might make the point that in each jurisdiction in Australia we have joint counterterrorism teams. They include the Federal Police, they include the state police force, they include ASIO, and they're highly professional in their work in the way they investigate terrorism matters, and they work right across the country.

Mr Pezzullo : I should add that Mr Dutton very clearly stated, as the minister for counterterrorism, last week at the Press Club that he has asked me and, through me, Mr Sheehan to review that framework to ensure that so-called foreign fighters who have left our shores are kept as far away from our shores as possible and that any return is made as difficult as possible, consistent of course with the law. And he mentioned last week at the Press Club that he'd asked us to review a number of areas, including in relation to the revocation of citizenship. And of course I wouldn't want to go further than what the minister said last week.

Senator HANSON: I just want to give you my congratulations on the job that you do. I think it's absolutely fantastic, regardless of the perception of some of the other senators in here. But I think you do a wonderful job protecting Australia. Thank you.

CHAIR: Thank you, Senator Hanson—and most senators share your view, I have to say, which I already mentioned beforehand.

Senator LEYONHJELM: I think my questions are for the acting commissioner. Can you offer an opinion as to what's prompted the rise in tobacco smuggling?

Mr Outram : I guess there'd be a number of factors at play. Obviously the price of tobacco would be one, and the ease with which people can illegally smuggle tobacco. It could be a number of factors. It could be the regulatory arrangements around retail outlets. There's a whole range of factors, I think, that contribute to the attractiveness of illicit tobacco as a market, both as a supplier and as a consumer.

Senator LEYONHJELM: Do you think demand for illicit tobacco, untaxed tobacco, has diversified the business model of organised crime?

Mr Outram : Yes. I think organised crime has become more involved in the supply and the wholesale level of illicit tobacco.

Senator LEYONHJELM: Roughly what share of your admin costs associated with preventing illegal imports would be related to the tobacco aspect of it?

Mr Outram : I don't know if we can talk about administrative costs, but certainly we established in 2015 a tobacco strike team, and the Tobacco Strike Team, for 20 FTE—20 investigators—was a lapsing measure that lapses at the end of this current financial year. Since its establishment they've seized in excess of 104 tonnes of smuggled tobacco and 233 million smuggled cigarettes, and that's the equivalent in revenue terms of $232 million. So the Tobacco Strike Team has been incredibly successful, but our seizures at the border are far in excess of that. That's just the strike team, but, as at 31 January 2018, we've actually seized 220 tonnes of undeclared tobacco by equivalent weight this financial year.

Senator LEYONHJELM: Staff normally have responsibility for stopping the import of illegal products like methamphetamine and heroin. How do you motivate them to stop the import of a legal product like tobacco? Is the motivation to stop illegal drugs different from the motivation to stop tax evasion?

Mr Outram : I guess it's core to the culture of the ABF in terms of our role as the customs service for Australia. Our role is obviously to prevent prohibited imports getting across our borders, whether they be drugs, tobacco, asbestos, childlike sex dolls. There are a whole range of things that we try and stop coming into Australia. There are also a whole range of things we try and stop getting out of Australia—cash smuggling, counterproliferation type activities to stop those sorts of commodities leaving our shores. Senator, I'd invite you to visit any of our sites. What you'll find with the Border Force when you go to any of our operational areas is the incredible commitment of our employees. They are just committed to the cause in protecting our border, but also as customs officers it's in our DNA that we're there to protect revenue and to raise revenue. After the tax office, we're the second-biggest collector of revenue at the border, and it's a big part of our mission to make sure that we collect revenue and maximise the collection of revenue. When there are those who seek to defraud us of revenue, underpay, underdeclare or circumvent their responsibility in terms of duty, then it's in our DNA to go after that as well. I don't find it difficult to motivate our officers. In fact, if you met the Tobacco Strike Team, you'd find they love what they do and they do a great job. They know also that, by taking out those wholesalers, they're actually making a dent in organised crime, because the profits from tobacco are being fed back into transnational crime syndicates, amongst others, so I don't think it's a hard sell.

Senator LEYONHJELM: I'm glad to hear that. I accept that you're probably not able to discuss details here, but Border Force officer Craig Richard Eakin was arrested in August 2017 for allegedly assisting the smuggling of tobacco. Can you tell me what Mr Eakin was charged with, the status of this court case and whether or not he has been dismissed from Border Force?

Mr Outram : I've got First Assistant Secretary Cheryl-anne Moy coming to the table. She runs our integrity and professional standards area, and she'll give you more detail. Obviously, it's very difficult for us to make too much comment given that it's in front of the courts.

Senator LEYONHJELM: Understood.

Ms Moy : Mr Eakin was charged with multiple charges that are with the AFP, so, as you would expect, we can't comment on the case. The case is still before the courts. He had a hearing last week. His bail was extended and he's due to appear in court on 18 April.

Senator LEYONHJELM: Is he still technically an employee of the department?

Ms Moy : Technically, he is an employee. He's on suspension without pay due to the criminal charges, and that will remain until such time as the court process has been finalised, so that we don't cut across in our investigations anything to do with the police investigations.

Senator LEYONHJELM: Leaving the issue of Mr Eakin to one side, are you confident that there are no current Border Force staff assisting tobacco smuggling?

Mr Outram : We are going to great lengths to make sure that we've got no people in our organisation who are doing the wrong thing. When I did a press conference in relation to Mr Eakin, I made the point that our officers do incredibly difficult work and they do an amazing job at the border. Just one corrupt officer affects all of us. It lets the whole side down and affects the reputation of the whole organisation. So, with the Department of Home Affairs, where Ms Moy works, we're going through very detailed vetting processes with our employees to make sure that we have no other people in our organisation doing the wrong thing. Can I give you a guarantee, any more than the federal police commissioner could or any more than any head of any other organisation could give you a guarantee, that there is nobody else in the organisation who is acting corruptly? No, I can't, but what I can give you a guarantee about is that we're absolutely committed to rooting it out, and we're doing everything we can to make sure that we're as corruption resistant as we can be.

Senator LEYONHJELM: This is my final question: from where I sit, it would seem that that corruption issue would be an order of magnitude different in thinking—between assisting a drug smuggler, with a product which is acknowledged to be harmful, and assisting a smuggler of tobacco, which is a legal product and the only sin, if you like, is evading excise on it. Do you see it that way?

Mr Outram : No, I absolutely do not see it that way, Senator. It's a criminal offence. And, to be honest with you, our employees are trusted with information that is our lifeblood. The sensitive information we hold about the supply chain, about companies, what they're bringing in, what criminals are doing—it goes right up to the 'top secret' national security level. We can't afford for people to think that it's okay to sell information to the enemy. And, if that enemy is bringing in tobacco, it could be the same person who is bringing in narcotics the next day, so I hold no distinction. Anybody in the Border Force who's doing the wrong thing will be dealt with the same, in my view, and it's corruption. It's intolerable.

Senator LEYONHJELM: Where I was coming from was whether they see them as equally significant.

Mr Pezzullo : Senator, if I may: the interconnection of crime means the very same criminal groups who are engaged in what you describe as a lesser sin are often using that as a cash vehicle to subsidise and cross-subsidise other activities including murder, extortion, drug trafficking, illicit weapons trafficking, et cetera. So we have a zero tolerance view of anyone who breaks any law, and we don't distinguish between the laws that you pass as parliamentarians as to which represent greater or lesser sins.

Mr Outram : Senator, I might just add a bit of context. My experience is nearly 40 years in policing and law-enforcement experience, including investigating corruption. Most police officers or Border Force officers joined their organisation and spent 30 years in their career, and did the right thing the entire time. There's a small percentage who become corrupt; generally speaking, they don't join corrupt. What happens is, there's an erosion of their value system because they start to, you know, buy drugs on a Friday night, and then somebody finds out they're a police officer or a Border Force officer and they've got their talons into them. And there's an erosion of that value system over time, and they become increasingly a bigger problem—because everything else becomes socialised as being okay: 'it's only tobacco,' 'it's okay; it's only a bit of ecstasy on Friday night'. So in my experience you've just got to have a zero-tolerance policy, as the secretary said. We do have random drug and alcohol testing, we have a whole lot of regimes in and across our organisation to try and make sure—from our recruitment practices onwards—that we're not bringing people into the organisation who are not going to do the right thing.

Senator PATRICK: There's a contract that Defence has awarded to Lendlease relating to an air combat capability for RAAF Tindal. I understand Defence have effectively subcontracted the job to Lendlease, and Lendlease then manage it. Lendlease have put out tenders, including for construction, that indicate that the material that will be used on this base will be coming from China, and it includes things like glass, aluminium, and thermal insulation. Obviously, you're not responsible for that contract, but in terms of the monitoring of that sort of building product as it comes into the country, I'm just wondering: you're not in a position to identify who the target of an import is, is that right?

Mr Pezzullo : Sorry, the target of an import?

Senator PATRICK: Where the import will go. The consignment note would—

Mr Pezzullo : There is a very sophisticated, long-established system for the management of Customs declarations that identify consignees and consignors. The Acting Comptroller-General can brief you at some length, I imagine, on how that system works—over to you, Mr Outram.

Mr Outram : Senator, yes: we get information in our Integrated Cargo System about the consigner and consignee details. So if there is a company in China who is exporting insulating products to Australia—building products, kids crayons, or whatever it is—then we know who the consignor is. And if we've got any previous information holdings about them then, obviously, that will be taken into account, because we have an intelligence area, the Border Intelligence Fusion Centre, who are constantly examining information in the Integrated Cargo System, looking for risk. That is based on, obviously, what we know intelligence-wise—it could be as simple as country of origin. Obviously, exports out of China and something like an insulating product would be pretty high risk. Our decisions about which containers we examine is then based on those profiles.

In relation to asbestos, at this point in time, from memory, we have got about 22 active profiles in the Integrated Cargo System. You might not be aware that—in terms of the number of profile alert matches within the system—in 2013-14 we had 157 relating to asbestos; in 2016-17, it was 8,643. The number of tests that we conducted in 2013-14 was 10; in 2016-17, it was 761. Positive detections have tracked up—not nearly as significantly in that light, by the way—from seven to 63. So, there has been a sort of diminishing return, if you like, on the additional effort we put in to examining containers that we think might contain asbestos and finding out they, in fact, don't. Nonetheless, we are very alert to the issues around asbestos. The fact that it is coming in through a defence contract is academic, frankly. If it triggers the alerts and the profiles within the system, then we will action them and examine the materials that are in there and, if we're worried, we'll get them tested.

Senator PATRICK: It's clear that asbestos is illegal as opposed to cladding and other imports, which are not illegal—

Mr Outram : Yes, that's right. There are restrictions around the importation—obviously, we have zero tolerance for asbestos; that is, zero per cent. Some countries say no asbestos, but they mean there is a tolerance of 0.05 per cent. However, we don't have any tolerance at all. In China, we've done a lot of work with China through both their embassy here and back in China and their various public administration bodies to educate the Chinese about our position on asbestos. They have been pretty proactive back in China, and you might be aware we've actually infringed and taken action against a number of companies who've been importing products that contain asbestos from China. We're trying to deter non-compliant behaviour as well as find products at the border.

Senator PATRICK: The difficulty for me in this instance is interested in protecting defence—making sure they get good quality products. Defence is the customer, there's Lendlease, the supplier, the individual builders, building surveyors, you guys—and we've have found in the non-conforming building products inquiry that it's just hard to pin down where to track this.

Mr Outram : Indeed, our role at the border is to look through the Integrated Cargo System to identify a risk through intelligence. We will examine commodities based on that but, of course, there is an onus and responsibility on industry—on importers—to do their due diligence with the people they're buying products from. They know the law. We're constantly engaged with industry in educating importers about our requirements around asbestos. A lot of Australian importers do, in fact, go to great lengths to make sure that their Chinese partners—who they are buying from—understand fully the need for zero asbestos. They're even putting it into contracts and things, so there are a lot of things that the industry itself can do to make sure that materials being imported are safe.

Senator PATRICK: Asbestos is in a sense different because, once again, it's illegal, and I know you have actually raided a couple of importers over the last couple of years. In circumstances where, ultimately, you get someone who's been provided with a product that is non-conforming as opposed to illegal, do you have any jurisdiction to then tackle that sort of problem or does it simply become a state jurisdictional issue?

Mr Outram : Unless something is prohibited or restricted under the Customs Act, we have no jurisdiction.

Senator PATRICK: Thank you, Chair. That's all I wanted to know.

CHAIR: I gather the Labor Party have agreed to give their time to Senator Steele-John.

Senator PRATT: To swap time, thank you, Chair.

Senator STEELE-JOHN: I've got questions mostly in relation to cybersecurity and counterterrorism, but before I go there, I want to pick the minister's brain once again and ask—what stage is the development at and what is the time frame for the introduction of the encryption legislation as foreshadowed by Mr Dutton in his National Press Club speech?

Senator Fifield: I'd be unable to add to what the secretary said earlier this morning. I don't have any knowledge separate to what he shared with the committee.

Senator STEELE-JOHN: What was your view earlier this morning?

Mr Pezzullo : Essentially, in two parts, for reasons to do with administrative convenience the staff who are working on that draft legislation and the policy intent behind it happen also to be experts in areas that best should be kept together until ASIO comes across. So, administratively, the work is being done by my colleague the secretary of the Attorney-General's Department, and within that department, but they will be handing it across soon. That is point 1. Under the administrative arrangements, Mr Dutton will take carriage of the legislation. We have not provided him with draft legislation or with advice. It is really a matter for the government and the cabinet at large as to what it decides about both the form of the legislation, when to put it forward and when to put it to the parliament. Then we will obviously operate under the government's directions.

Senator STEELE-JOHN: Could you give me a timeline as to when that handover will be completed?

Mr Pezzullo : I will seek counsel from Ms Noble. This is not about legal distinctions; it is about administrative convenience. I think that those staff will come to the department within the next month or so, but I will just check with Ms Noble. I might be wrong. I just want to be entirely accurate. Ms Noble.

Ms Noble : The transfer of those policy staff in the Attorney-General's Department will coincide, once the parliament considers and perhaps passes the home affairs bill.

Mr Pezzullo : So, referring to my earlier evidence and my statement at the very start of these proceedings, should it be the will of the parliament to amend relevant legislation such as would allow the transfer across of ASIO, save some matters that will remain the responsibility of the Attorney-General, we have decided for administrative reasons to then await that moment before we move the remaining staff from Attorney-General's, some of whom are working on that piece of legislation.

Senator STEELE-JOHN: So it will be contingent upon the timeframe of the passage of that particular piece of legislation?

Mr Pezzullo : That is right. And as the minister at the table said, once it considers the JPCIS report, which I gather is to be brought down imminently, if it hasn't already been brought down, it's the government's intention, as the minister and Prime Minister have indicated, to move swiftly on its recommendations and then to pursue the bill through both houses.

Senator STEELE-JOHN: Thank you. Now I will turn to the cyber security and terrorism related questions. Could we go back to a question I asked earlier about the NFBMC. I note that about 2½ years ago, when it was announced, the cost was $18.5 million projected. What is the updated projected cost for the completion of the scheme?

Mr Pezzullo : Ms Fernandez and her staff will assist me with that line of questioning. Ms Fernandez is the deputy secretary of the department responsible for intelligence and other technical systems. She can address your question.

Ms Fernandez : Your question went to the funding that has been provided for the National Driver Licence Facial Recognition Solution?

Senator STEELE-JOHN: Yes. More broadly, the facial recognition service scheme announced by Minister Tehan in 2015.

Ms Fernandez : It has several components, some already implemented. Mr Rice can address the questions in more detail. It has several components. The component that relates to the funding of $18.5 million is the national drivers licence component, which will enable us to connect a hub that is provided by the Department of Home Affairs that will interface with each of the states' drivers licence biometric systems. It will also interface with the Department of Home Affairs visa and citizenships system and the Australian Passport Office.

Mr Pezzullo : In Foreign Affairs and Trade.

Ms Fernandez : In Foreign Affairs and Trade. Correct.

Senator STEELE-JOHN: There is not an updated cost?

Ms Fernandez : There is an updated cost. That funding was allocated in 2014-15 and $2.5 million has since been provided by the Digital Transformation Authority to complete the capability's build. That has enabled also the greatest support from the states in their preparing their legislative changes that will be required by certain states to be able to connect up.

Senator STEELE-JOHN: When Minister Dutton introduced the Identity-matching Services Bill 2018, he said that robust safeguards must be maintained. What are these privacy safeguards and how will they differ from existing government systems, which, as we know, have been susceptible to breaches and hacks?

Mr Pezzullo : Mr Chairman—Senator, if you'll excuse me—can I seek your guidance, because the practice has been fairly consistent over the years that I've appeared before this committee. This is legislation that is currently before the parliament, the Identity-matching Services Bill. The senator's question goes directly to matters that are before the parliament and being scrutinised, I presume, by various committees, aren't they? I just seek your guidance as to whether you would wish this estimates committee to—

CHAIR: I don't think it's relevant, because it's really hypothetical, but I've had a talk to the secretary about this. He seems to think the advice from the Clerk is that it is relevant. It's not worth getting into a ditch over, but—I'm sorry; I didn't quite hear the question—if it's related to the policy or what it's intended to do with this thing, that would seem to be relevant, on the advice I've given. If it's asking for legal advice on what the act means and that sort of thing—

Mr Pezzullo : I think Senator Steele-John's question, as I heard it, probably is at the boundary of those issues. Partly it's policy, but also it's just about safeguards that pertain to privacy, Senator Steele-John, if I heard you right.

CHAIR: If you're capable of giving the answer, Mr Pezzullo—and I'm sure you and your officers are—let's—

Mr Pezzullo : We'll see how we go.

CHAIR: Within reason.

Mr Pezzullo : Ms Fernandez, we might not go into the detailed drafting issues, but maybe the policy intent.

Ms Fernandez : There are a range of safeguard and transparency measures, and they include an offence for unauthorised disclosure of information by officers and contractors of the Department of Home Affairs. They also include annual reporting on the use of services and a statutory review. There are also further safeguards in the intergovernmental agreement, which includes privacy impact statements and annual audits. There have been a range of privacy impact statements that have been completed and a number that are in progress.

Mr Pezzullo : It might assist the committee, Ms Fernandez, if literally in 60 seconds or less you could give the policy purpose of the legislation. It might give your answer more context. What is the purpose of the legislation?

Ms Fernandez : The purpose of the legislation is for us to be able to identify individuals. It is for the use of national security and law enforcement agencies in the identification of individuals of concern. If they come across an individual that they consider may be proposing to harm the community, they can use the capability to identify the individual.

Senator STEELE-JOHN: I am familiar with the overall aim, and, on that point, I'd like to take you to an example of this technology being used overseas. The FBI, the Federal Bureau of Investigation, in the US accepts an error rate of 15 per cent in its Next Generation Identification program that's been running since 2010. That's obviously one in six images that could falsely identify an individual, leading to quite serious consequences. Have you thought about an inaccuracy rate that would be acceptable under this scheme?

Mr Pezzullo : Unless, Mr Rice, you've got detailed knowledge, I'm not sure that we're aware of any official FBI metric of that character, but perhaps how do we deal with error rates, without referencing—

Senator STEELE-JOHN: Its publicly available information—

Mr Pezzullo : Unless it's been released by the bureau, though—there are lots of things that are publicly available that are not necessarily authorised or official. Unless you don't need to rely on the FBI standard—a general comment, Mr Rice, perhaps?

Mr Rice : We've been on this pathway for the last three years, and we've worked extensively with not the FBI per se but US authorities that go to the question of accuracy of provision of these kinds of services. We have also worked with the Defence Science and Technology Group on the accuracy of the services.

You probably know that biometric systems are improving considerably over time and the question of accuracy gets better every year. The systems are essentially probabilistic systems; they're not an absolute system, so there is a probability score that comes with the provision of an answer. There's a question for the user of the system, working with us as the provider of the system, about their risk tolerance as well. It's when it goes to the question of one-to-one checking verification of a known identity. It's particularly important when it comes to the question of identification of an unknown person, the one-to-many checking. That's why we've been very strong in the development of this system and insisting that there is a person in the loop. It's a specialised capability to resolve these queries.

As you point out, there are inaccuracies. We need to have appropriately qualified and trained people in the loop who are resolving those queries when they come back. So, in that way, through a combination of continually working with experts in the area around development of the system and working with user agents to be appropriately trained, we deal with some of those issues of inaccuracy that you've identified.

Senator STEELE-JOHN: Under the same Senate committee process in the US, it was also identified that the next generation program incorrectly identifies black people more frequently than it does white people due to inherent biases in the facial recognition systems being trained on datasets that underrepresent some demographics. What steps will you be taking to avoid discriminatory biases within the system?

Mr Pezzullo : I'm going to personally look into the evidence about the American program, because I'm interested and intrigued in any event—thank you for drawing it to our attention. But, without presuming that anything that we do is akin to this next generation program, perhaps—

Senator STEELE-JOHN: I understand. I think I'm running a little bit up against time, so I might just—

CHAIR: You're over time. Are you just about finished?

Senator STEELE-JOHN: I might just finish with one more, if that's okay, Chair. What are the implications for individuals if this system is hacked or breached, considering—and you can correct me if I'm wrong here—an Australian citizen cannot simply be issued with a new face in the same way that they would be issued a Medicare card?

Mr Pezzullo : All government agencies take their cybersecurity responsibilities very seriously. All government data, whether it's facial recognition or indeed any other sensitive biodata, including personal tax information and travel data—I could go on—is all constantly being reviewed as to—

Senator STEELE-JOHN: Forgive me, but a process would surely be in place should some of this information fall into the wrong hands through a breach?

Mr Pezzullo : The prior question is to ensure that we mitigate against that risk as best as we can, and perhaps Ms Fernandez or Mr Rice may wish to speak to that. I will make the more general point that, as sensitive as facial data certainly is—and it is, Senator, I absolutely agree with the premise in that regard—there's lots of very sensitive information that governments hold about individuals—

Senator STEELE-JOHN: Medicare data and all sorts of other things—

Mr Pezzullo : All sorts. Travel plans, tax—

Senator STEELE-JOHN: have also been breached, and that's my point. I'm just looking for proactive action here.

Mr Pezzullo : Mr Rice, what steps are we taking to mitigate that risk of hacking?

Mr Rice : One thing I would add about the design of the system is that it's been premised on a hub-and-spoke model. The images that the system is matching against are in the visa and citizenship system within the Department of Home Affairs and the passports system in the Department of Foreign Affairs and Trade. Those databases already exist. We are developing a database where driver licence images will be held. That will be the subject of stringent and robust security controls. That's enshrined in the intergovernmental agreement.

Senator STEELE-JOHN: Have you ensured that the systems you're using differ from the systems which have been breached in recent times in relation to Medicare and other personal information breaches that've been—

Ms Fernandez : I might address that from a cybersecurity perspective from the department. The systems that Mr Rice refers to—for example, the visa and citizenship systems, the biometric systems—are held behind our firewalls. Our cybersecurity measures are layered in the department. We have two internet gateways that are secure internet gateways. And then, beyond the gateways, we have cybersecurity software on the desktops, and in our software and in our service—

Mr Pezzullo : Inside the gateways, I think.

Ms Fernandez : Inside, yes.

Mr Pezzullo : We've also got a moat on the outside of the gateway, don't we?

Ms Fernandez : We do. So the cybersecurity arrangements for the Department of Home Affairs apply to these biometric systems.

Mr Pezzullo : Don't we also have forward posts ahead of the moat, as well, that detect through geoblocking and other—

Ms Fernandez : Added on to the gateway, yes.

Mr Pezzullo : Yes.

Senator STEELE-JOHN: Thank you for your time.

CHAIR: Thank you, Senator. Senator Moland.

Senator WATT: Chair, it has been quite some time. We ceded our time to the Greens so that we could get it back after that.

CHAIR: No, you gave the Greens your spot, I'm sorry. I made that clear. If you want to give the Greens things, that's fine. But you don't just rearrange the timetable to suit yourself and the Greens.

Senator PRATT: We have the call after that.

Senator MOLAN: Thank you, chair. My questions go to Manus, again, if I may. One of the reasons for the success of Operation Sovereign Borders very much went to the fact of turnbacks, TPVs and offshore processing, reducing the level of offshore processing by an amount. I wonder if you are confident that the retention of Manus as an offshore processing centre is sufficient to ensure that the overall strategy of border protection through Operation Sovereign Borders works.

Mr Pezzullo : It's the government's policy to in fact decommission our use of Manus as a regional processing site. You heard evidence earlier given by Deputy Commissioner Newton in response to questions from Senator McKim that effectively we are about the decommissioning of the Manus RPC. I think the burden of the evidence earlier was about sufficient arrangements put in place in transition as that decommissioning occurs to support those men as they were moved into different sites—and you had that evidence earlier. The government announced last year—and Deputy Commissioner Newton will refresh my memory on this—that it's not its intention to retain Manus RPC as a long-term asset, but it is the government's intention to maintain an ongoing relationship with the government of Nauru in respect of the regional processing capability afforded to Operation Sovereign Borders by Nauru.

Senator MOLAN: So it's more appropriate to say that we are not maintaining Nauru as an offshore processing centre; we are maintaining a relationship with the Nauru government.

Mr Pezzullo : For the purpose of regional processing, yes. Of course the whole purpose is, as you would well recall, in fact not to have to use those facilities. But, as in all deterrents, you need to have an asset that is credible so that you are deterring future eventualities. So the whole point of it is actually not to use it but to be willing to use it. That's how a deterrent is made credible.

Senator MOLAN: Thank you. I wonder if you could just very quickly refresh the numbers that I normally work on when I speak about these things. No-one is in detention in Nauru—that's correct, isn't it?

Ms Newton : No-one is in detention on Nauru or Manus.

Senator MOLAN: My apologies. Manus, I meant. I know Nauru. Manus, that is correct. The total number of males on Manus?

Ms Newton : On Manus at the moment? There are 756 in PNG in total.

Mr Pezzullo : Which shouldn't assume to be Manus province—is that right?

Ms Newton : No. There are a number in PNG community, in Port Moresby at the moment receiving medical treatment, and in the three centres on Manus. But the total number is 756.

Senator MOLAN: How many of those would have been found to have been refugees? All of them?

Ms Newton : There are 589 that have been determined to be refugees, and 167 that have been determined to be failed asylum seekers.

Senator MOLAN: The numbers that have gone to the US, please?

Ms Newton : The total numbers that have gone to the US are 197 from both Manus and Nauru. So from PNG—

Mr Pezzullo : As recently as yesterday, I think.

Ms Newton : Yes, as recently as yesterday we had 27 leave from Nauru, 84 from PNG and 113 from Nauru.

Senator MOLAN: They are totals.

Ms Newton : They are totals.

Senator MOLAN: Can you estimate the number likely to go the US, or is that too hard?

Mr Pezzullo : We've given evidence previously that the agreement that was struck by the Turnbull and Obama administrations—reaffirmed by the Trump administration—is for the US to endeavour to take 1,250 persons.

Senator MOLAN: Are there marked differences, if any, between medical facilities available for Papua New Guinean citizens and facilities on Manus?

Ms Newton : On Manus there's a specific clinic that is available at the East Lorengau centre—that's like a GP clinic. It's got mental health nurses, a psychological support provider, general GP doctors and other clinicians who support the local community—all of the people on Manus Island.

Senator MOLAN: All of them?

Ms Newton : Yes, on all three sites.

Senator MOLAN: But, all three refugee—or what we used to call IMAs—

Ms Newton : All three sites. They'll be transported to East Lorengau for general GP-related activity. There is also a Lorengau hospital so, if there's an out-of-hours incident, the hospital will be utilised. The PNG government and ICSA—their immigration authority—make a determination as to whether somebody might need additional care.

Mr Pezzullo : What does ICSA stand for again? I'm getting old.

Ms Newton : Immigration and Citizenship Service Authority—thanks for seeking clarification, Secretary.

Mr Pezzullo : There are so many acronyms in this job.

Ms Newton : There are a number of people who are transported to Port Moresby to receive medical attention, if it's not available on Manus.

Senator MOLAN: But, it is safe to say that there is no marked difference between what—what is the collective term for these good people? We used to call them IMAs, and that got us into trouble left, right and centre.

Ms Newton : They are transferees, but a number are refugees and nonrefugees.

Senator MOLAN: How many—

Mr Pezzullo : Just to be clear, IMA is an accepted term of art—in fact, program 1.4 speaks of illegal maritime arrivals, IMAs. It's a term of art.

Senator MOLAN: Thank you.

Mr Pezzullo : The subset of persons who arrived by illegal maritime means, who are then transferred, shorthandedly, we refer to as transferees. They seek asylum consistent with the laws of PNG or Nauru as the case may be, and then they are either refugees or failed asylum seekers. So, that's the kind of typology and the nomenclature tree, if I can describe it in those terms.

Senator MOLAN: That's good. Have many nonrefugees returned home?

Ms Newton : Yes, a substantial number of nonrefugees have returned.

Senator MOLAN: In the hundreds?

Ms Newton : I will just have to check the figures for you.

Senator MOLAN: And, while you're at it, have any refugees returned home?

Ms Newton : Yes, there have been quite a number of refugees as well. As of 31 January, 782 individuals from regional processing countries have voluntarily departed, including third-country resettlement—614 from PNG: 513 asylum seekers, 71 failed asylum seekers and 30 refugees; and 160 individuals from Nauru—153 asylum seekers and seven refugees have all voluntary departed.

Senator MOLAN: One final question, if I may? Have there been any substantiated claims of torture at either of the two offshore processing centres?

Ms Newton : Not that I am aware of.

Senator MOLAN: That's all, Chair.

Senator WATT: I just wanted to tidy up a couple of remaining things to do with that Gold Coast high school drug overdose, if the relevant officers could come back.

Mr Pezzullo : I think the acting commissioner was leading on that evidence.

Senator WATT: Can I just quickly confirm a couple of things from before? Has it actually been confirmed yet that the drug involved in this overdose at Saint Stephen's College was Phenibut?

Mr Murray : I understand from the information provided by the Queensland Police Service to the Australian Border Force that that is the case.

Senator WATT: What you told us earlier is that Border Force was advised by the TGA in September 2017 that there was an interim ruling that it was a prohibited substance. Is that correct?

Mr Murray : I will clarify that. I was attempting to explain that Phenibut was scheduled for domestic control by TGA under the Poisons Standard with effect from 1 February but that there was an interim measure taken by them from September 2017. The reason for my absence from the committee room is that we are still trying to establish whether the Australian Border Force or the Department of Home Affairs had been formally advised. We are still pursuing that, because there is some uncertainty.

Senator WATT: What's the effect of the interim order?

Mr Murray : As I understand it, it's a matter for the TGA in terms of the domestic controls, defining those under the poisons. In terms of the Australian Border Force and our provisions at the border, regardless of what the nature of the illicit commodity may or may not be, the new psychoactive substances provision is a bit of a catch-all to allow for any analogue derivative of what might be a form of illicit drug.

Senator WATT: It became a prohibited substance on 1 February this year?

Mr Murray : As I understand it, but I would like to come back to you and the committee with exact detail on that.

Senator WATT: Okay, and you're trying to clarify when the TGA advised Border Force of that.

Mr Murray : And whether they did advise the department.

Senator WATT: Do you know whether they advised Border Force of this interim ruling in September last year?

Mr Murray : I cannot provide the information.

Senator WATT: Are you checking that as well?

Mr Murray : Absolutely.

Senator WATT: What actually occurs within Border Force when an item is declared to be a prohibited substance? Assuming you were notified, or in other cases where you're notified by the TGA, what changes?

Mr Outram : A whole range of things. The first obvious thing is that if it's a narcotic we have to start to load up the profile of that in our trace detection technology. We have to advise our workforce, our people at the front line who are looking for these substances, from the investigators right through to the screeners, people looking at X-rays and all those sorts of things.

Senator WATT: So it essentially becomes something that people start looking for?

Mr Outram : Exactly. As I said earlier, if it's sea cargo in the integrated cargo system, our intelligence area that sits within the Department of Home Affairs will start loading up alerts and profiles based on intelligence. If we think there are particular people or companies or types of transactions that present that risk, they start loading those up into the system. If we think there are passengers who might be bringing those sorts of substances into the country, say on aircraft, they start loading up the profiles into that system. Air cargo is slightly different. We have to start working with DHL, UPS and those sorts of companies. Still we get information a couple of hours out to allow us to start profiling. The mail system is a work in progress. We don't get nearly enough advance data out of the mail system to enable us to profile in quite the same way. So we have a much bigger footprint of people doing X-raying and dogs and those sorts of things at the mail sortation centres.

Senator WATT: I understand that you're trying to get the facts of what occurred in this particular instance. But in general terms, if the TGA is planning to declare a substance prohibited, is Border Force or the department generally warned of that ahead of time so that you can start making preparations?

Mr Outram : I would have to consult with colleagues in the Department of Home Affairs in our policy area but my experience would be that, yes, we work very closely with TGA in relation to those sorts of issues.

Senator WATT: So it is reasonable to assume that you would have been given some warning before 1 February that this would be a prohibited substance?

Mr Outram : I'd like to be sure before answering that question. That's why we're making those inquiries.

Senator PRATT: Supplementary to that, when did you start looking for Phenibut in the mail system or coming through the border?

Mr Outram : Again, we are checking all those facts and dates.

Senator PRATT: So you don't know?

Mr Murray : At this point in time, no. But we have been joined by a colleague from the department who may. We have together been trying to ascertain some further details on this.

Mr Pezzullo : Mr Chandler is the subject matter expert and provides advice to the Comptroller-General on the applicable laws and regulations. He might well be able to cast some light on this.

Senator WATT: What we are specifically wondering is whether either the department or Border Force was made aware by the TGA of its intention to declare Phenibut to become a prohibited substance on 1 February. Do you know?

Mr Chandler : As the acting assistant commissioner said, we are in the process of trying to ascertain whether or not that information was provided to the department or to the ABF. We will get back to you with a response as soon as possible.

Senator WATT: Leaving aside this specific case, I think the acting commissioner essentially said that generally speaking you work with the TGA prior to the date of something being prohibited. Is that your experience as well?

Mr Chandler : Yes. Ordinarily, we would be working with the TGA or the Office of Drug Control with regard to classifications there—yes.

Senator WATT: When items are on the verge of being prohibited, in your experience is there ever a last-minute rush from importers attempting to get those items into the country before a ban comes into effect?

Mr Outram : I am not aware of any instance that comes to mind. We could reach back into our subject matter experts to see if they have any recollection of that occurring, but I'm not aware of any evidence of that occurring.

Senator WATT: Maybe that is something else to take on notice then.

Mr Murray : Certainly. With respect to the new psychoactive substance provisions under the Criminal Code, we can reverse the burden. If we identify and detect a suspect commodity we can actually reverse the burden on the importer and the consignee to determine whether it is an illicit good, and for its intended purpose.

Senator WATT: When you are preparing for a prohibition date, you are sort of saying that increased activity goes on with everyone from the post office to air cargo importers to ensure that things are ready for that date to stop—

Mr Outram : Mr Chandler may be able to assist here, but in terms of engagement with industry within Australia about our new regulatory system, I imagine TGA would be informing suppliers and importers of the new restrictions. From our point of view, we would obviously be making instruments under the Customs Act in terms of prohibition and then loading up our various trace detection technology to detect the actual substance itself, informing our officers and queueing our intelligence systems so that we can obviously start to look at these commodities through the data that is coming through, whether it is mail, cargo, sea or air.

Senator PRATT: So you can't confirm whether or not you were taking any action in relation to this substance prior to Wednesday, 21 February?

Mr Outram : We have taken that on notice and we are going to come back and confirm one way or the other.

Senator WATT: On a totally different topic: fast response boats, which is something I have asked about previously. These are the ones for Far North Queensland.

Mr Outram : Yes.

Senator WATT: As you know, this issue of the fast response boats being delivered to Cairns has come up a couple of times in estimates previously. In October the committee was advised that these boats would be delivered by the end of December. Have they been delivered to Cairns yet?

Mr Outram : Yes, they have. In fact, they are up in Torres Strait.

Senator WATT: When were they delivered?

Ms Newton : They were delivered on 3 January into Australia.

Senator WATT: I won't scald you too much for it being three days after December!

Ms Newton : They were due prior to that time but there was a delay with the ship.

Senator WATT: They were. They were due in March 2016, as I recall.

Ms Newton : We expected them on the 25 December.

Senator WATT: So they are in operation in Torres Strait.

Mr Outram : They are actually going through trials. They are not fully operational yet. We are obviously testing them and working out our operational posture in relation to them—where we are going to moor them, where we are going to use them, how we are going to use them and those sorts of things, and getting our crew familiar with them.

Senator WATT: When do you expect them to be operational?

Ms Newton : Currently, they are up in Thursday Island. They're expected to be fully operational by 31 March.

Senator WATT: 31 March—okay. So that will be two years after they were originally proposed for introduction?

Ms Newton : That's correct.

Senator WATT: Some of the information we were given at previous estimates turned out not to be correct on this. At previous estimates I think we were told a particular number of boats, but that was changed. And they're actually going to be aluminium rather than steel. Is that right?

Ms Newton : Yes, that's correct.

Senator WATT: I noticed that in correcting some of your evidence at the last estimates, you said that they would be fully operational in the Torres Strait and Cairns from March 2018. But you corrected your evidence to remove the reference to Cairns, so they will be fully operational in the Torres Strait. So they are not going to be operational around Cairns?

Mr Outram : It's not the intention at this point in time. They were designed for operations in the Torres Strait. They are very low draught, made for the conditions up in the Torres Strait. That's where we intend to use them.

Senator WATT: Is that a change from the original intention?

Mr Outram : No, they were originally intended for the Torres Strait, but of course we may have to base them out of Cairns for various repairs and servicing-type issues. We do have two of our Bay class vessels that have been repurposed as well and that are operating out of Cairns. Again, they are primarily focused on the Torres Strait and down the coast around the Cape.

Senator WATT: Okay.

Mr Outram : They're fast response boats to enhance our posture up there, primarily in the Torres.

Senator WATT: Where will they actually be based?

Mr Outram : Thursday Island.

Senator WATT: The other questions I have concern Cape class patrol boats. You probably saw that there was a bit of media coverage about this in December, with some concerns regarding lead poisoning and Legionnaires' disease on these boats. Can you tell us when the department or Border Force was first made aware of the issue of lead and legionella bacteria contamination on these Cape class patrol boats?

Ms Newton : We became aware in October.

Senator WATT: October 2017?

Ms Newton : Yes, 2017. This was when we undertook quality assurance of the water on the vessels as they came in for refurbs.

Senator WATT: And for those who aren't familiar with the background, it was found was that there was drinking water on board some boats which contained elevated levels of lead and, in one case, legionella bacteria. That's correct?

Ms Newton : That's correct.

Senator WATT: When did either Border Force or the department advise the Border Force officers who were working on these boats about the contamination?

Ms Newton : We advised staff about potential contamination of water issues as soon as we found out when we were undertaking testing. So, on a number of occasions those ships didn't go to sea until such time as adequate cleansing and dosing of the water systems had been completed.

Senator WATT: When you said that you told them straight away, was that the day you found out, or the next day or a couple of weeks?

Ms Newton : I will just have to check as to whether it was hours or within 24 hours. My understanding is that the first boat was undergoing its normal turnaround process before crew went out.

Senator WATT: Okay. If you could take that on notice that would be great—the time frame for advising staff. And what processes were put in place to deal with staff concerns about the contamination?

Ms Newton : Maybe I could just run through a couple of the issues? Comcare were notified of the contamination in Cape York's freshwater system.

Senator WATT: When was that?

Ms Newton : That was on 3 October 2017. On 10 November 2017 the inspection was closed, based on Comcare's findings. Comcare advised of a planned verification visit in February 2018 to review remedial action taken in relation to Cape York, and other measures taken to address the corresponding systems in other fleet vessels.

Senator WATT: Has the source of the contamination been identified?

Ms Newton : Predominantly, the source of contamination had been water that was put onto the ships from the shore.

Senator WATT: From the shore—right.

Ms Newton : Testing was undertaken of the supply of water going onto each of the ships, to assess for lead and for other contaminants.

Senator WATT: Was it water that came from an Australian source or was this overseas?

Ms Newton : All Australian sources.

Senator WATT: What's the testing regime now in place to prevent this kind of thing happening again?

Ms Newton : We are undertaking regular testing when the boats come back into shore and we have a plan that will be completed by March that will be an ongoing plan for ensuring that complete testing is undertaken. We also offered blood tests to all of the staff that were on board those ships, so 245 blood lead tests have been undertaken—most of the crew members who are currently working or have recently worked on Cape class vessels. Approximately six tests have been undertaken for contracted interpreters who have been on board Cape class vessels, and all results for vessel crew have proven to be below population levels for lead blood.

Senator WATT: Could you also take on notice for us the date that health and safety representatives among the staff were notified and the date that union representatives were notified?

Ms Newton : Yes, we will take that on notice.

Senator WATT: You said that the Comcare inspection was closed in November. Does that essentially mean their investigation concluded then?

Ms Newton : They were satisfied with the ongoing results that we had undertaken for the testing, with both dosing that we had undertaken and also filtering that was in place.

Senator WATT: Has any sort of internal review into this contamination been conducted?

Ms Newton : We've been undertaking a review on an ongoing basis. We have received additional medical advice from doctors that have actually also done video hook-ups with our staff, to assure them of what that testing actually means in terms of the amount of lead within the system that would be in a normal system anyway. The acceptable range of lead in the blood for the general population is less than 0.24 umo per litre, or five oug per litre. All test results for the crew were substantially below that level, the highest being 0.19.

Senator WATT: Could you take on notice for us the recommendations of this internal review, what they have been and what strategies have been put in place to prevent similar contamination occurring again?

Ms Newton : We have completed undertaking the review and continue to assess all of the ships. A fleet-wide water management plan is being developed and will be implemented, with the assistance of external water management experts. The water management plan is due to be completed by 31 March.

Senator HUME: My questions are also about vessels, but slightly different kinds of ones. I've got some questions about the boat turn-back program.

CHAIR: Before you do that, can I just interrupt part of your time, which I haven't started yet?

Senator HUME: Please do.

CHAIR: Perhaps I should ask the minister this, or the Border Force people. If parliamentarians wanted to have an investigatory look, on the water, on those patrol boats in Thursday Island, how do we go about that?

Mr Pezzullo : I think you've just asked, Mr Chairman!

Mr Outram : We'll come back to you, Chair, out of session of the committee. Perhaps we'd have to work out logistically how we would do that, but we are more than happy—

CHAIR: Is it something that we should ask the minister about?

Mr Pezzullo : Through the minister, but I'm sure—

CHAIR: Not this—

Senator Fifield: No, but through me to Minister Dutton.

Mr Pezzullo : I'm sure Minister Dutton would be delighted.

Senator Fifield: I'm sure that would be possible. In fact, going back to the Howard government, I remember, as part of the parliamentary defence program, when there were aspects that covered some of the old Customs, there were options that people could pick to look at some of those sorts of activities, so I'm sure it can be facilitated in other ways.

CHAIR: I'd just be interested in having a look at them, and I'm sure there'd be other senators here who would be. Just to pre-empt Senator McKim from the rude interruption he made, this wouldn't be a sort of a day-long fishing trip but perhaps half an hour—

Senator McKIM: 'Junket', I think, is the word you're looking for, Chair.

CHAIR: Well, you'd know about those sorts of things.

Senator McKIM: No, I don't actually.

CHAIR: No, you don't; it's your colleague Senator Whish-Wilson. Senator Whish-Wilson was wanting to go diving at Commonwealth expense. But this would be really seriously for half an hour, to have a look at the boats and see how they work.

Mr Outram : It's a good idea, and for any of the senators, obviously, in doing so you'd be able to engage with the people who are crewing those vessels. More importantly, then you'd get a sense of the use to which they're being put and some of the operational challenges and some of the mission that they have and how they go about that mission.

CHAIR: Do you have local people on those boats?

Mr Outram : Not local people. In terms of the Torres Strait, we tend to rotate staff through. It's hard to get people who are willing to go up there for long periods of time. We do have one or two staff who are local. You would recall—although this is not necessarily in terms of the craft—that we have border management officers. We have 15 positions up there in the Torres Strait who are locally engaged. Of course they help us manage the movement of people under the treaty and identify that we should be coming. So we do engage locally. But in terms of the crew on those vessels, they are by and large brought in from other parts of Australia for periods of time.

CHAIR: Thanks. Senator Hume.

Senator HUME: I wanted to ask about a couple of the aspects of Operation Sovereign Borders, particularly the boat turnback program.

Mr Pezzullo : If I can assist, I will take questions of policy. Noting the stipulations that the minister has laid down in relation to the public interest immunity and the secrecy that necessarily surrounds some of those operations, to the extent that operational matters can be canvassed Air Vice Marshal Osborne will join us. So I will take questions of policy. Chair, as is customary practice, it might be an opportunity for the air vice marshal to make a brief statement about the status of Operation Sovereign Borders, if that pleases the committee.

Senator HUME: That would be terrific.

Air Vice Marshal Osborne : I will be brief. I will just make a couple of comments in terms of updating the committee on the status of Operation Sovereign Borders. Since December 2013, our counter-people-smuggling operations have resulted in the interception of 32 vessels and the safe return of 800 people to their country of departure or origin. This includes three ventures since I commenced as commander of Operation Sovereign Borders in January last year. The last people-smuggling venture intercepted was in December of last year. Twenty-nine Sri Lankan nationals were on board, and all of them were returned to Sri Lanka.

That said, our success in preventing boat arrivals—as I know I have said a number of times—should not be interpreted as a sign that the smuggling has passed or that our border protection posture can be relaxed. To do so would invite a resurgence in people-smuggling activity. The people smugglers do remain active in our region, and they are constantly seeking to re-enliven the trade. In recent months, we have observed an elevated level of reporting in source and transit countries for illegal maritime migration to Australia. The media reporting on events and issues such as the closure of the Manus regional processing centre and New Zealand's offer to resettle refugees are used by the people smugglers to fuel rumours that Australia's border protection policies will inevitably change or soften and that new illegal migration pathways will be opening up.

I'll leave the update there, other than just to finish, as I usually do, by noting that the professionalism and hard work of the people across all the 16 agencies and departments that contribute to Operation Sovereign Borders has now delivered a period of over 3½ years without a successful people-smuggling venture. But, as I said before, there is certainly no room for complacency, and we continue to remain vigilant. Thank you. I'm happy to take questions.

Senator HUME: Thank you, Air Vice Marshal. You actually answered a lot of my questions, which is terrific. But I do just want to follow up on your comments about New Zealand. Have any of the boats that you have intercepted been on their way to New Zealand? Or do the passengers on those boats believe that they are on their way to New Zealand?

Air Vice Marshal Osborne : That last distinction that you draw is an important one. Obviously, New Zealand has figured prominently in recent months in the media. I can only repeat what the Prime Minister and minister have said on a number of occasions: it does not matter whether the people, when they get on board those vessels, genuinely think they are heading to New Zealand. The reality is that it's given people smugglers—and the people themselves, frankly—a queue that they think New Zealand might be an option and that it's a marketing tool, at the very least, for the people smugglers.

Senator HUME: The people smugglers are selling New Zealand as a destination?

Air Vice Marshal Osborne : Fundamentally, yes.

Senator HUME: New Zealand is essentially benefiting from our operations, from our boat turn back program, from Operation Sovereign Borders?

Mr Pezzullo : I'm not sure that that's a question fairly directed to the operational commander. I am happy to give it some contemplation. The air vice marshal is responsible for the execution of Australian policy.

Senator HUME: You don't feel like you can answer the question either, Mr Pezzullo?

Mr Pezzullo : I might be able to. I am just giving it some contemplation, as I am considering—

Senator HUME: Please, take your time.

CHAIR: If it's just an opinion or a guess it's not relevant. But if you've been told something by New Zealand officials—

Mr Pezzullo : I will put it in these terms, I think it's fair to say that New Zealand officials, and, indeed ministers, given the distances involved and the extensive nature of Australia's border protection capabilities in the maritime and aerial sphere, are appreciative of the buffer or the protection that they derive from that, yes.

Senator HUME: My understanding is that it's about 3½ years or so that we have not seen a boat arrive in Australia, is that about right?

Mr Pezzullo : I think I heard the commander express it in those terms. Three and a half years, is that right, Air Vice Marshal?

Air Vice Marshal Osborne : That's correct.

Senator HUME: Are there any particular regions that you're targeting with the program at the moment?

Air Vice Marshal Osborne : As I've said before to this committee, we're interested very much in our region, which arcs around the Indian Ocean round through to South-East Asia—noting that the Middle East area also serves as a source country for people moving on. I guess it would be obvious from the facts that we've seen that Sri Lanka is an area that continues a low level, but is nevertheless persistent. Every now and again we'll get an attempt or hear of one but, fortunately, we work very closely with the Sri Lankan authorities. They're very good at their job too. I'm happy to say that in many cases they're able to head off those ventures before people put their lives at risk on those dangerous voyages to Australia.

Senator HUME: So, because they've headed off those ventures at the source, you're finding that there are fewer people pooled in those transit centres closer to Australia?

Air Vice Marshal Osborne : No. I wouldn't go that far. Even by the UN numbers themselves there's what they call a 'population of concern' in our immediate region, which is in the order of over 2½ million people—either displaced people, asylum seekers or refugees. As I started to say in my opening comments, I wouldn't want to be complacent about the potential for people smugglers to get back into business. Those push factors still exist. Australia is still seen, as many western countries are, as a desirable place to be.

Senator HUME: The people smugglers are dormant but they haven't disappeared?

Air Vice Marshal Osborne : I've used the term 'suppressed' in the past.

Senator McKIM: When I was last questioning, Ms Newton informed the committee that the Papua New Guinean government advised the department on 23 November that they intended to move people out of the Lorengau RPC . Who from Papua New Guinea informed who from Australia about that?

Mr Pezzullo : We'll see if the Deputy Commissioner can add to her previous evidence.

Senator McKIM: Thank you.

Ms Newton : I don't have the detail of the exact person that provided the advice, but they provided advice to our commander that was still on Manus Island.

Senator McKIM: The Border Force commander?

Ms Newton : Yes.

Senator McKIM: There was a Border Force commander on Manus Island on 23 November?

Ms Newton : That's correct, but they were not at the regional processing centre.

Senator McKIM: Where were they?

Ms Newton : They were in Lorengau township.

Senator McKIM: They never went to the RPC after the services were withdrawn?

Ms Newton : My recollection is, no, they didn't, but I'd have to check that for you.

Senator McKIM: Thank you. Can I ask you to take on notice my previous question about who notified who.

Ms Newton : We'll take it on notice.

Senator McKIM: Also the form of notification—was it an email, text message or letter? Could you provide that for the committee or at least take it on notice.

Mr Pezzullo : We'll take those questions on notice.

Senator McKIM: Thank you. I think you said it was the commander on Manus Island, in Lorengau. Is that right?

Ms Newton : That's correct.

Senator McKIM: Did your commander notify up the chain of command within Border Force that the PNG police advised that they intended to move people out?

Ms Newton : It was ICSA, the immigration and citizenship authority, that provided advice, but I'm not sure exactly who. They advised the department—

Senator McKIM: They advised the commander on Manus Island.

Ms Newton : not Royal Papua New Guinea police.

Senator McKIM: Sorry, could you say that again please?

Ms Newton : It was ICSA staff that provided advice, not the Papua New Guinean police force.

Senator McKIM: Once that advice was passed to the Border Force commander on Manus Island, did that advice then get transmitted by your commander up through the chain of command here in Canberra?

Ms Newton : Yes, it did.

Senator McKIM: Presumably that appeared on your desk at some stage, Ms Newton?

Ms Newton : I became aware that they were choosing on that day to move people from the centre as a result of a health decision whereby the health authority had determined that it was no longer suitable for people to occupy.

Senator McKIM: Yes, but that was after the Royal Papua New Guinea Constabulary went in and overturned all the water containers, isn't it, Ms Newton?

Ms Newton : No. My understanding is that that was as a result of a variety of issues about suitable accommodation with sanitation issues and also water supply.

Senator McKIM: That's right, but the water supply was cut off prior to all this happening, wasn't it? As was the food, medication and electricity. They were all cut off because your department made the decision not to roll the contracts over for the provision of those services.

Ms Newton : That was a matter for PNG to determine that they were closing the regional processing centre on 31 October. They started informing residents at the centre on 15 May that that closure would take place by 31 October.

Senator McKIM: By the way, I believe it was Australia's decision. However, on your evidence, it wasn't; it was the PNG's decision. When did the department first become aware that Papua New Guinea, in your version of events, was going to close down the Lorengau RPC?

Mr Pezzullo : Do you mean the decommissioning of the centre?

Senator McKIM: Yes.

Mr Pezzullo : It would certainly have been before 15 May. Was it March or April, Ms Newton?

Ms Newton : April.

Mr Pezzullo : We've given evidence on this before. I'm just trying to refresh my memory. It'll be in the March to April timeframe.

Senator McKIM: Do you have any plans to close the Nauru RPC?

Mr Pezzullo : No. As I said to Senator Molan, it's the government's intention to maintain a relationship with Nauru. I didn't say the centre; I said a relationship with Nauru as part of the ongoing policy of deterrence.

Senator McKIM: Yes, but my specific question is: do you have an intention to close the RPC on Nauru?

Mr Pezzullo : It wouldn't logically follow from that government policy, no.

Senator McKIM: Again, that's not the question I'm asking. Have you got a plan or are you contemplating closing the Nauru RPC?

Mr Pezzullo : As I said to Senator Molan, it's important as part of OSB to maintain some latent capability to deal with future arrivals who might regrettably come through the Border Force maritime net and so there's no intention to do so.

Senator McKIM: So there are no intentions to close the Nauru RPC?

Mr Pezzullo : No. The government's intention is to maintain an ongoing relationship with the government of Nauru for the purpose of regional processing.

Senator McKIM: Ms Newton, we've established that prior to the mobile squad moving in on 23 November that you were aware of they were going to move in.

Ms Newton : No, not prior to the 23rd.

Senator McKIM: What about on the 23rd?

Ms Newton : We were informed on the 23rd and our post-understanding of that was that they were already commencing the action for people to move from the centre.

Senator McKIM: You knew at that stage that there were many hundreds of refugees and people seeking asylum who were resisting being moved.

Ms Newton : I was aware of that, yes. That's correct.

Senator McKIM: Did you ask the PNG government, ICSA, or were you informed by ICSA how they intended to move people out of the centre, given that it was known by you that there was resistance to being moved?

Ms Newton : I understood that they were preparing plans to remove people from the centre, but were not involved in any planning process associated with any removal.

Senator McKIM: Yes, but did you know how they were going to try to remove people from the centre?

Ms Newton : Not how they were going to try to remove people, no.

Senator McKIM: You didn't know that. You didn't—

Ms Newton : Not the methodology of removal.

Senator McKIM: Did you ask?

Ms Newton : No, I didn't ask.