Mandatory referrals: Intelligence agency heads

The heads of certain Commonwealth intelligence agencies have obligations under the National Anti-Corruption Commission Act 2022 (the NACC Act). They must refer certain issues to the Inspector-General of Intelligence and Security (IGIS) or the NACC Commissioner for potential investigation. These obligations are called mandatory referral obligations. These obligations are separate from the ability to make voluntary referrals under the NACC Act.

This factsheet provides guidance on the mandatory referral obligation for the head of a Commonwealth intelligence agency.

For mandatory referral obligations for heads of Commonwealth agencies other than intelligence agencies, see Mandatory referrals: Commonwealth agency heads.

For information about mandatory referral obligations for public officials with responsibilities under the Public Interest Disclosure Act 2013, see Mandatory referrals: PID officers.

What is an intelligence agency?

Certain intelligence agencies have different mandatory referral obligations under the NACC Act to other Commonwealth agencies. Under the NACC Act, the following organisations are 'intelligence agencies':

• Australian Geospatial-Intelligence Organisation (AGO)
• Defence Intelligence Organisation (DIO)
• Australian Secret Intelligence Service (ASIS)
• Australian Signals Directorate (ASD)
• Australian Security Intelligence Organisation (ASIO)
• Office of National Intelligence (ONI)

Who is an intelligence agency head?

The following persons are intelligence agency heads:

• Director of the AGO
• Director of the DIO
• Director-General of ASIS
• Director-General of ASD
• Director-General of Security (ASIO)
• Director-General of National Intelligence (ONI)

What are the mandatory referral obligations for intelligence agency heads?

If the head of an intelligence agency becomes aware of a corruption issue within their agency, they must tell either the NACC or the IGIS if all the following apply:

• the corruption issue concerns the conduct of a person who is, or was, a staff member of the agency while that person is, or was, a staff member of the agency
• the agency head suspects the issue could involve serious or systemic corrupt conduct.

The head of the intelligence agency must refer the corruption issue to either the IGIS or NACC as soon as reasonably practicable after becoming aware of it.

See National Anti-Corruption Commission Act 2022, section 34 and 38

Who is a staff member of an intelligence agency?

Many people are staff members of Commonwealth agencies under the NACC Act. For intelligence agencies, this includes all of the following:

• employees of the intelligence agency
• agency heads
• secondees to intelligence agencies
• goods and service providers who have contracted with the Commonwealth to provide something to the Commonwealth or an agency, or to provide something in connection with Commonwealth activities
• other people who exercise powers or perform functions under certain Commonwealth laws.

See National Anti-Corruption Commission Act 2022, section 12

For more information, see The NACC's jurisdiction: who can the NACC investigate?

What is a corruption issue?

A corruption issue is information, or an allegation, that raises a question of whether a person:

• has engaged in corrupt conduct in the past,
• is currently engaging in corrupt conduct, or
• will engage in corrupt conduct in the future.

See National Anti-Corruption Commission Act 2022, section 9

What is corrupt conduct?

While corrupt conduct can take many forms, the NACC Act defines it to mean situations where a public official:

• does something that breaches the public trust,
• abuses their office as a public official, or
• misuses information they gained access to in their capacity as a public official.

It also applies to any person (whether or not they are a public official) who does something, or tries to do something, that that could adversely affect a public official’s honesty or impartiality in their official capacity.

See National Anti-Corruption Commission Act 2022, section 8

To find out more about corrupt conduct, see What is corrupt conduct?

What is 'serious' or 'systemic' corrupt conduct?

An agency head must refer a corruption issue to the IGIS or the NACC if they suspect it could involve serious or systemic corrupt conduct. It will be up to the NACC Commissioner to decide if they think a particular allegation of corrupt conduct is serious or systemic.

The terms ‘serious’ and ‘systemic’ are not defined in the NACC Act and will take their ordinary meaning.

The agency head does not need firm evidence that the corruption issue could involve serious or systemic corrupt conduct. It is enough for the agency head to suspect that it could be serious or systemic.

However, when the agency head refers the corruption issue to the NACC they must explain why they suspect it could be serious or systemic.

Once operational, the NACC Commissioner may provide more detailed guidance on assessing what amounts to serious or systemic corrupt conduct.

The following information is intended to provide an indication of some factors that may be relevant.

Serious corrupt conduct

Many factors could be considered when assessing whether conduct could be serious corrupt conduct. The NACC Act does not specify what an agency head should consider.

An agency head may suspect that an incident involves 'serious' corrupt conduct for many reasons. For example, they might consider if the alleged conduct could involve any of the following:

• a criminal offence and, if so, the seriousness of the offence and maximum penalty if a person is found guilty
• a financial gain or loss and, if so, the amount of money gained or lost
• another benefit or detriment and, if so, the significance of the benefit or detriment
• misuse of information and, if so, the sensitivity of the information and potential harm from an improper disclosure or misuse of that information
• a person who holds a senior or trusted role and, if so, the seniority of the person; the level of trust or influence they exercise in their role; and whether the person should have understood their responsibilities and duties in that role
• a person trying to cause a public official to act dishonestly or in a biased way and, if so, the significance if the public official did behave dishonestly or showed an inappropriate preference.

Agency heads could also consider whether the conduct:

• involved deception or was done secretly
• was planned or deliberate
• occurred over a prolonged period of time.

Systemic corrupt conduct

'Systemic' means something that relates to a system, or affects a system (including an organisation) as a whole. Corrupt conduct could also be systemic if it formed part of a pattern. For example, a pattern of similar kinds of conduct in the agency.

Choosing to refer to the IGIS

Where the mandatory referral obligation is engaged, heads of intelligence agencies can choose whether to refer corruption issues to the IGIS or to the NACC. They should consider which organisation is the most appropriate to receive the initial referral, depending on the nature of the corruption issue.

For example, if the intelligence agency head believes the corruption issue also raises issues of whether their intelligence activities were lawful and proper, they may prefer to refer it to the IGIS in the first instance given its oversight role and extensive experience in these matters. There may also be circumstances where the head of an intelligence agency chooses to refer a corruption issue to the IGIS to express a view on whether it is likely to involve serious or systemic corrupt conduct.

If the intelligence agency head decides to refer the issue to the NACC, they must also notify the IGIS. If the intelligence agency head refers a corruption issue to the IGIS, the IGIS must refer it to the NACC if it is satisfied the issue is likely to involve serious or systemic corrupt conduct.

What information must be provided to the IGIS or the NACC?

An agency head must include the following information when making a mandatory referral to the NACC or the IGIS:

• all information relevant to the corruption issue in their possession or control when they make the referral
• the reason why they suspect the issue could involve corrupt conduct that is serious or systemic.

Information relevant to a corruption issue may include (but is not limited to):

• the names of any public officials who the agency head suspects have engaged in serious or systemic corrupt conduct
• the names of any private individuals or entities involved
• a description of the conduct
• the dates and timeframes of when the alleged corrupt conduct occurred or may occur
• how and when the agency head became aware of the issue
• any supporting documents or evidence
• any other relevant information.

Agency heads must make a referral as soon as practicable after becoming aware of a relevant issue.

If the agency head becomes aware of new information after making the referral, they must provide it to the NACC or the IGIS as soon as reasonably practicable.

Exceptions to information requirements

The agency head is not required to provide information about a corruption issue if any of the following apply:

• the agency head believes on reasonable grounds that the NACC Commissioner or the IGIS is already aware of the information
• the NACC Commissioner or the IGIS has advised the information is not required
• the information is subject to an exempt secrecy provision
• the Attorney-General has certified that disclosing the information would be contrary to the public interest because it would harm Australia’s international relations.

When do the mandatory referral obligations start?

After 28 July 2023, agency heads must start to make mandatory referrals of anything they become aware of from 1 July 2023 onwards. They can still voluntarily refer a corruption issue to the NACC within the first 28 days.

If an agency head becomes aware of a corruption issue they suspect could be serious or systemic after the 28-day grace period, they must refer it to the NACC as soon as reasonably practicable.

What about historical conduct?

After 1 July 2023, if the agency head becomes aware of a corruption issue that happened before the NACC commences, the mandatory referral obligations apply with the 28-day grace period. The agency head must refer the issue to the NACC as soon as reasonably practicable after 28 July, or later if the NACC Commissioner allows it.

After 28 July 2023, if the agency head becomes aware of a corruption issue that occurred before 1 July 2023, the mandatory referrals apply without the 28-day grace period. This means the agency head must refer the issue to the NACC as soon as reasonably practicable.

This obligation applies regardless of when the relevant conduct occurred, such as before:

• the agency head joined the agency
• they became the agency head
• the NACC commenced operations.

If the agency head was already aware of a corruption issue before 1 July 2023, they are not obligated to refer it to the NACC or the IGIS. However, they can still do so voluntarily.

Exceptions to mandatory referral obligations

An agency head is not required to refer a corruption issue to the NACC if:

• they believe on reasonable grounds that the NACC or the IGIS (as appropriate) is already aware of the corruption issue, or
• the NACC or IGIS tell them that a referral is not required in the circumstances.

What if sharing the information would breach a secrecy obligation?

The NACC Act requires agency heads to comply with the mandatory referral obligation, even if doing so would breach a secrecy obligation under another law.

However, there are some exceptions to this rule. If one of the following secrecy obligations (known as ‘exempt secrecy provisions’) applies to information about a corruption issue, the agency head is not required to provide that information in a referral to the NACC or the IGIS:

• Part 11 of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006
• Section 34 of the Inspector-General of Intelligence and Security Act 1986
• Secrecy provisions under the My Health Records Act 2012
• Sections 45 and 45B of the Surveillance Devices Act 2004
• Sections 63 and 133 of the Telecommunications (Interception and Access) Act 1979
• a secrecy provision that is a provision of a taxation law
• a secrecy provision in another law that says it still applies despite the NACC Act.

It is important to note that the mandatory referral obligation continues to apply in these circumstances. However, the agency head is not required to include the information subject to an exempt secrecy provision in their referral.

See National Anti-Corruption Commission Act 2022, section 36

What happens after making a mandatory referral to the IGIS?

If the agency head decides to refer the corruption issue to the IGIS instead of the NACC, the IGIS must consider the referral.

If the IGIS is satisfied the issue is likely to involve serious or systemic corrupt conduct, they must refer it to the NACC.

This means the IGIS needs more than just a suspicion that the corruption issue could involve serious or systemic corrupt conduct. Their extensive experience in the legality and propriety of the conduct of intelligence agencies makes them well-placed to assess the seriousness or systemic nature of corrupt conduct in the context of intelligence activities.

If the IGIS is not satisfied that the issue is likely to involve serious or systemic corrupt conduct, they do not have to refer it to the NACC.

What happens after making a mandatory referral to the NACC?

If an intelligence agency head decides to refer the corruption issue to the NACC instead of the IGIS, the agency head must also notify the IGIS as soon as reasonably practicable. This ensures the IGIS has visibility of allegations of corruption within the intelligence community, which is relevant to their oversight role.

If the NACC Commissioner is satisfied that the referral raises a corruption issue, they may deal with it in one or more of the following ways:

• commence a preliminary investigation
• investigate the issue alone or with the relevant Commonwealth agency or a state or territory government entity
• refer the issue back to the Commonwealth agency for them to investigate
• refer the issue to another Commonwealth agency or a state or territory government entity for consideration
• take no action.

The NACC Commissioner is not required to consider every referral they receive and may decide not to take any action in relation to a referral. The NACC Commissioner can only commence a NACC investigation if they are of the opinion that the issue could involve corrupt conduct that is serious or systemic.

Preliminary investigations

The NACC Commissioner may conduct a preliminary investigation if they are unsure:

• whether a referral raises a corruption issue
• about the nature of a corruption issue
• whether a corruption issue is serious or systemic.

A preliminary investigation helps the NACC Commissioner find out more information about the referral. They can then decide whether or how to deal with it. The NACC Commissioner can use some of their investigatory powers under the NACC Act to conduct a preliminary investigation, such as compelling persons to provide certain information, documents or things.

What if the intelligence agency is already doing something about the corruption issue?

Referring a corruption issue to the NACC or the IGIS does not prevent an agency from taking action, such as conducting an internal investigation.

If an agency has an obligation to handle a corruption issue under any other law, it is still required to meet this obligation unless the NACC Commissioner directs it to stop.

What is a stop action direction?

The NACC Commissioner is able to direct a Commonwealth agency to stop taking action in relation to a corruption issue, after consulting with the agency head. This direction is called a stop action direction. A stop action direction can prevent an agency from taking particular action in relation to the issue or from taking any action at all.

In consultation with the agency head, the NACC Commissioner can only direct an agency to stop taking action where the direction is required to ensure the effectiveness of any action the NACC Commissioner has taken, or might take, in relation to the corruption issue. For example, to avoid prejudicing the NACC’s corruption investigation. The NACC Commissioner must withdraw the direction as soon as it is no longer required.

See National Anti-Corruption Commission Act 2022, section 43