News & Current Affairs
15 October 2014
The case for a Federal ICAC
On May 15 this year, the Australian Greens Leader, Senator Christine Milne, unsuccessfully introduced a bill to create a national anti-corruption body. She makes a powerful case, raising many very concerning examples. Every Australian should read what she had to say.
“The federal government is the only jurisdiction without the infrastructure to confront corruption. Every time wrongdoing is exposed, one-off reviews or ad hoc investigations are launched.
I want to take this opportunity to congratulate the people blockading at Bentley against Metgasco because today the New South Wales government has suspended the licence that was granted because there was no consultation with local people and because, through the Independent Commission Against Corruption investigations, it is pretty obvious that the licences were given wrongly. But it should not take ordinary citizens taking the action that they have to hold governments to account, to make sure that licences are not given as a result of money paid behind the scenes or undue influence or favours in any other way.
And now for the third time the Greens have this bill before the parliament to create this office to crack down on public sector corruption and promote integrity in our public institutions. In fact I cannot see why anybody would oppose setting up a national ICAC, and I will be very interested to hear what excuses are offered. It is pretty obvious that corruption does not end at the border of New South Wales; it does not end at any other state border. When you consider the likelihood of corruption in the federal arena, it is pretty overwhelming. So many major projects are dependent on some federal licence being given, some engagement with a federal agency. Therefore, there is a huge temptation for people, both at the political level and in the bureaucracy, to engage in talking with lobbyists-and who knows where it will end up.
I want to give an example that is on the go right now. You have the financial services industry, which did not like one little bit the fact that in the last government Labor and the Greens moved to change the law to require those people in the financial services industry to act in the best interests of their client. Now what is wrong with someone being required to act in the best interests of their client? You would expect that to be the case. But what has been revealed is that in a whole lot of the managed investment schemes, for example, the financial advisers were not telling the people they were selling the products to of the massive kickbacks that they, the financial advisers, were getting as a result of recommending that product. So what happened? The financial advisers became rich, but the people who bought the product, well those people lost and lost out badly.
When I think of the tragedy of the people who were sucked into buying from Great Southern Plantations, Gunns and the rest, you have to ask the question: how on earth did the financial services industry get to the point where it was able to con the parliament into agreeing that it could sell a product without having to act in the communities’ or its clients’ best interest?
Now we have a situation where the financial services industry has persuaded Prime Minister Tony Abbott’s government to change the act back to remove the need for financial advisers to act in the best interests of the client. And we what do we find? We find that the financial services industry is part of the North Sydney Forum, which is a fundraiser for the federal Liberal Party-in particular, Treasurer Joe Hockey. What does that tell you about the influence of lobbyists-the way that lobbying groups get involved in private fundraising engagement with political parties? The delivery is given here in parliament in terms of outcomes. And it is entirely secret. Until this was forced out recently, nobody would have known about that backroom dealing that was going on.
That is why it is critical. The same thing goes with novated leasing and a whole range of things, including the salary packaging industry. That industry is in there with the car industry to set up a situation where you can minimise your taxable income by going through this lurk of novated leases. We got rid of it in the last period of government, and I see that the current Liberal Party is about to restore the rort.
That is the kind of thing that goes on, and that is why the community is getting increasingly frustrated and wants to have some reassurance that there is some way of investigating what they can clearly see is on the verge of corruption, if not corruption.
In this Greens legislation, the National Office of Integrity Commissioner is modelled on the successful New South Wales Independent Commission Against Corruption. It is based on provisions in the Law Enforcement Integrity Commissioner Act 2006. The first part of it is about the National Integrity Commissioner, and that is concerned with corruption in relation to public officials and Commonwealth agencies, and has full investigative powers, including public and private hearings and summoning any person or agency to produce documents and appear before the commissioner.
I think that is fair enough. Why shouldn’t public officials, Commonwealth agencies and parliamentarians be subject to that kind of oversight in the federal parliament? I will give you an example-it happened recently-which many people will have read about. Just in this last month we saw two men-one from the Australian Bureau of Statistics and another working with the National Australia Bank-using unpublished unemployment, retail and trade data at the Bureau of Statistics to trade in foreign exchange derivatives. Somebody working in a government agency was working with someone in the private sector and using that information. That insider trading brought in millions of dollars to the two men, but in this case it has been picked up by our criminal justice system. I am glad it has been picked up by our criminal justice system, but it may not have been. What pathways do members of the community have to put forward matters and have them investigated?
I want to go to another example-the issue of Securency, a subsidiary of the Reserve Bank. Mr Warburton has been appointed by Prime Minister Abbott to review Australia’s renewable energy target. We know that he has been the subject of a secret internal investigation into his role as a former director of a firm involved in Australia’s worst foreign bribery scandal. That investigation and those findings by KPMG were sent, in February, to the Reserve Bank Board. They deal not only with Mr Warburton and his fellow former Note Printing Australia directors but go to the knowledge of, and handling by, Note Printing Australia’s sanctions-busting trip to Iraq in 1998. Yet yesterday, when I sought the parliament’s approval to put that document on the table of the parliament so that we can know what exactly went on and what KPMG found out about those directors-in particular, Mr Warburton-the government and the opposition voted together to prevent the Senate order that would have required that report to be tabled in the parliament. I put the question: why shouldn’t the parliament have access to that KPMG report on what has gone on?
I want to give another example. One of my constituents, who I will not name, is a fisherman in Tasmania. He was approached by two Austrade officials in Japan. He was asked to provide fish to this supposedly Japanese businessman who they vouched for. They said he was a credible person and that they had done the due diligence. They said that the government wanted this trade in order to develop the relationship with Japan in high-quality seafood. So this fisherman went ahead and did it, at the request of Austrade. He was quite happy with his own business. He did not need this business but he went ahead with it because they asked him to.
The long and the short of it is that he provided the fish to this place in Japan-to the businessman whose bona fides Austrade vouched for. After a while the fish were collected but no payment was made. Later it was revealed that there was no such businessman. The person that Austrade had vouched for did not exist. Austrade had invited my constituent to get involved with a shonk. Why? In order to justify the Austrade office in Nagoya they had to show that they were turning over a certain amount of business. So they set up this whole thing. The result of it is that my constituent went broke, and the department backed their two officers to the hilt.
There was no natural justice in this. As far as I know, those two officials remain employed in Austrade. I think it is totally wrong. I have pursued it every which way, seeking natural justice for this person. But the bigger question here is: how many other Austrade officials around the world are setting up similar kinds of scams and presenting figures to the federal government on the extent of the business that they are engaged in when, in fact, it has all been set up to secure their postings rather than the business that was supposedly there to be delivered?
I will give you another example, under the Green Loans scheme in the last period of government. It was riddled with incidents of inappropriate behaviour from some public servants, who favoured particular suppliers. They split contracts so that they did not have to go to competitive tender. The audit reports into the scheme make for deeply troubling reading, with systematic breaches of procurement policies and basic financial management regulations. The question is: was it just maladministration or sloppiness? Were they under pressure to get these Green Loans and audits out the door? Did they do this in order to facilitate a government policy, to get it out the door? Or were any kickbacks paid? What actually was done when the audit reports came in and showed there were serious questions to be answered?
The public does not know, and neither does this parliament. Those of us who have constituents bring these things to us have no mechanism to have them investigated. And if we cannot actually give enough evidence for a breach of a criminal kind it goes nowhere. Well, I think that if it is good enough for the states to recognise that there is a high risk of corruption and that they want to actually try to eradicate corruption, then at the very least the federal parliament should go there as well.
It also goes to our international standing. We are a signatory to two important anticorruption conventions: the United Nations Convention Against Corruption, which entered into force in December 2005, and the Organisation for Economic Cooperation and Development Convention on Combating the Bribery of Foreign Public Officials in International Business Transactions. This is another one where Transparency International has previously criticised Australian law for its low and ineffective penalties for corruption. It found, in its 2009 report, that Australia made little or no effort to enforce the OECD Convention on Combating the Bribery of Foreign Public Officials in International Business Transactions.
I will give you another example: in Zambia, as I stand here, there is an Australian mining company over there trying to get a licence to put a mine in one of their biggest national parks. It was refused by the environment agency in Zambia but then that was overturned by a minister in that country. International NGOs have alleged clearly that money changed hands. And yet you have an Australian state government backing this company to the hilt. What is the arrangement? Who is involved in this?
You have the United States currently investigating BHP in China in relation to corruption. This was one of the things referred to the Australian Federal Police. It was not taken up by the Federal Police, but I raised it at the last estimates and they now have.
Equally, in Macau, where the Chinese took action against a citizen there for bribery in relation to casino developments-in particular, Crown casino developments. The Chinese citizen was jailed there for taking a bribe of $100 million to free-up the land for the casinos and provide the licences. And yet when that was referred to the Federal Police to look at from our end, what was done? Zilch, zero-nothing! Now, why? Why are we allowing this to happen? I would like to have a very considered explanation from my parliamentary colleagues in other political parties here as to what they could possibly have against setting up a national integrity commission-a commission against corruption.
The other thing we need to do is to reassure the public that the entitlements we get are appropriately accessed and spent. That is why as part of this National Integrity Commission, the Greens are saying that we want a new Office of the Independent Parliamentary Adviser, to advise MPs and ministers on entitlement claims and the ethical running of their offices that the public rightly expects. That adviser that would be tasked with developing a legally-binding code of conduct for MPs for the parliament to adopt.
Of course, this goes to the heart of the recent wedding scandal, where people had claimed expenses to go to various weddings, functions and so on, and the question was really: were those really for parliamentary business or were they using an entitlement just because they could get access to it? There was the famous case here, many years ago, of an MP who flew to Perth and back and who did not leave the airport lounge, simply to get the entitlement in relation to frequent flyer points. This was using a public, taxpayer funded fare to fly from the eastern states to Perth, sit in a lounge, have lunch and come back in order to get the frequent flyer points. This is why we have had the awful scandal in the last parliament with the former Speaker, Peter Slipper, and allegations made about him and his use of entitlements. But he is not the only one by any means. There have been a lot of allegations. That is why it is actually to the benefit of parliamentarians that we get this, because it enables people to go and ask the question, ‘Is this an appropriate use of my entitlements or not?’ and actually to have that sorted by someone who is overseeing it.
So I implore the parliament: corruption is serious. It distorts our democracy and it hurts communities, communities who end up like those in the Bentley Blockade, having to take action because governments have colluded with business to get the outcomes that business wants against the community. So, come on: let’s get a national ICAC for Australia and let’s do it in this parliament to restore and maintain our reputation, and to help build trust in the parliament rather than the level of cynicism about the revolving door between big business and politics.”