Getting the NACC

On 1 July 2023, the federal government established the National Anti-Corruption Commission (NACC) as Australia’s new federal anti-corruption body. The creation of this new body with wide-ranging powers was the fulfilment of the Albanese government’s election promise to address transparency and corruption issues within the federal government and its various agencies and institutions.

The NACC was established in response to growing concerns and research conducted with the Australian community which showed declining public trust in Australian government and public institutions in recent years. This research indicated that potential corruption within the government significantly contributed to this decline in trust. Such corruption could and has resulted in the misuse of government resources, impacting essential services including health care, education, and national security.

The NACC possesses a wide range of investigative powers and its jurisdiction is broader than its predecessor agency, the Australian Commission for Law Enforcement Integrity (ACLEI).

Purpose of the NACC

The NACC has been set up to have the power and capabilities to thoroughly investigate corruption and ensure that the public is informed about any discoveries made. It will also serve to educate the public sector, and the general public, on corruption risks and prevention measures.

The key piece of legislation establishing the NACC, the National Anti-Corruption Commission Act 2022 (NACC Act) underlines the institution’s objectives, which include:

• facilitating the detection of corrupt conduct;
• timely investigation of issues that could involve serious or systemic corruption;
• referring persons for criminal prosecution, civil proceedings, or disciplinary actions after investigations; and
• educating and informing the public about corruption and its detrimental effects on public administration and the Australian community.

Powers and operation

The NACC is designed to be an independent agency under the Attorney General’s portfolio, which means it will, at least in theory, operate without any governmental interference. The government cannot dictate what the NACC should or should not investigate, nor how it conducts its work.

The NACC’s broad scope of operation encompasses the investigation of allegations of serious or systemic corrupt conduct within the Australian government public sector. Readers should note however, that the terms ‘serious’ and ‘systemic’ are not strictly defined within the NACC Act. It is up to the NACC Commissioner’s (Commissioner) discretion to determine if a matter could involve such conduct.

Under the NACC Act, the institution can investigate any individual who may have adversely affected a public official’s honesty or impartiality. This includes investigations into public officials who might breach public trust, misuse their office, or misuse information they obtained while carrying out their official duties.

The NACC can exercise the following powers:

• enter Commonwealth premises and access Commonwealth information without a warrant;
• compel individuals and organizations to produce documents by issuing a Notice to Produce;
• apply for search warrants to search other places, vehicles and people;
• issue a summons requiring any person to appear and give evidence at a hearing;
• access covert investigative capabilities, such as intercepting telecommunications, obtaining surveillance device warrants and computer access warrants; and
• in exceptional circumstances and in the best interest of the public, conduct public hearings.

However, the NACC is not obliged to investigate every issue that arises. If an issue is deemed neither serious nor systemic, the NACC may redirect it to another agency better suited to handle the situation.

Scope of application of the NACC

Under the NACC Act, the definition of a public official is very broad and includes most people who work for, exercise the powers of, or perform functions for, the Australian government or the Australian Parliament.

This includes members and senators of the Australian Parliament and their staff, staff members of Commonwealth agencies, Commonwealth companies and Commonwealth statutory bodies.

The NACC Act also includes contracted service providers including consultants, independent contractors, labour-hire contractors and others providing contracted services to the government within the definition of a public official.

Definition of corrupt conduct

Corrupt conduct, as defined by the NACC Act, can take multiple forms, but in essence, it refers to situations where a public official breaches the public trust, abuses their office, or misuses information they access due to their official capacity.

The NACC will only be able to investigate alleged corrupt conduct if it is of the opinion that this conduct could be serious or systemic.

Corrupt conduct as defined by the NACC Act encompasses:

• breaching public trust by a public official;
• a public official abusing their office;
• a public official or an ex-public official misusing information obtained during their tenure; and
• actions that could lead a public official to act dishonestly or with bias during their official duties. Notably, this type of corrupt conduct is not limited to public officials; any individual can engage in such conduct.

A person is also engaging in corrupt conduct if they attempt or plot to undertake any of the above activities. A public official’s behaviour can embody one or several types of corrupt conduct simultaneously.

Cases of suspected corruption can be referred to the NACC via the following pathways:

1. Voluntary referrals

Any individual, including members of the public and public officials, can voluntarily refer a corruption issue or provide information about one to the NACC.

The NACC can also receive anonymous referrals. However, anonymous submissions will limit the NACC’s ability to follow-up, notify the individual of the investigation’s outcome, or ensure protective measures for the referrer.

2. Mandatory referrals

There are specific mandatory referral obligations for heads of Commonwealth agencies (with separate requirements for the heads of intelligence agencies), and Public Interest Disclosure (PID) officers.

Heads of Commonwealth agencies, including Members and Senators of the Australian Parliament and senior officers of various departments and entities, must refer corruption issues within their agency to the NACC if they suspect it involves serious or systemic corrupt conduct.

PID officers, individuals responsible under the Public Interest Disclosure Act 2013, also have mandatory referral obligations. They must notify the NACC of any corruption issues they become aware of in the course of their duties, especially if they suspect the conduct to be serious or systemic.

Protections

Typically, under Australian law, individuals can decline to provide evidence regarding an offence they might have committed due to the privilege against self-incrimination. However, the NACC Act generally mandates that people must supply information, documents, or items to the NACC even if it might incriminate them.

In addition, a person will not be excused from providing information, or a document required by a notice or direction to produce or at a hearing, on the grounds that doing so would disclose legal advice given to a person or a communication that is protected against disclosure by legal professional privilege.

However, the NACC Act does include a safeguard which ensures that such incriminating details will not be admissible as evidence against the individual in criminal proceedings, proceedings for the imposition or recovery of a penalty, or confiscation proceedings. There is also a protection against enforcement of contractual or other remedies or rights on the basis of the disclosure made to the NACC.

The NACC Act also makes it a criminal offence for anyone to take, or threaten to take, reprisal action against another person by causing detriment to them because they believe, or suspect, that the other person has, may or could, disclose a corruption issue to the NACC.

Outcome of a NACC investigation

After an investigation, the Commissioner is required to write a report detailing opinions, findings, and recommendations, which may include a determination as to whether serious or systemic corrupt conduct was found.

This report may indicate if a person was found to have engaged in corrupt conduct. However, it should be noted that such a finding is distinct from court-declared criminal guilt and criminal prosecution, and that it may or may not separately accompany the NACC report.

The NACC cannot finalise a report until those who are the subject of critical findings, opinions or recommendations have had an opportunity to respond in writing.

Some of the recommendations could range from suggesting specific actions against an individual, such as enhancing their performance or terminating their employment, to implementing measures to rectify weak policies that might have facilitated corruption.

The NACC will also be able to disclose certain evidence to the head of a police force or a director of public prosecutions if it has discovered evidence of a crime in its investigation.

The Commissioner will release the report, or parts of it, if it serves the public interest. However, certain sensitive information, such as national security details or personal private details, will be excluded from the main NACC report.

Commonwealth agencies must provide action details in response to the report’s recommendations within a specified timeframe. The Commissioner can ensure agencies are implementing recommended actions by liaising with the heads of the agencies and if responses are inadequate the Commissioner can escalate the matter to relevant higher authorities.

Takeaway for business

In the private sector, it should be highlighted that actions taken by private individuals or companies that could lead a public official to act dishonestly, or with bias, during their official duties, would be in contravention of the NACC Act.

For this reason, it is important that not only government employees and contractors, but also those in industry and the private sector are aware of the regulations of the NACC Act and the types of conduct it prohibits.

Prohibited conduct includes behaviour such as seeking to put pressure on, or entice, a government official in charge of a tender process with financial or other benefits, to grant the tender to a company which may not be the best qualified for the project.

It is recommended that businesses in the private sector educate their staff on the basic obligations of the NACC and the potentially serious consequences that breaches can lead to for businesses and individuals.

Andrew Hudson, Partner of Customs & Trade at Rigby Cooke Lawyers, will be presenting on the topic of the new NACC and its implications for licensed customs brokers and freight forwarders, via webinar on Monday 14 August 2023. If you would like to register, please e-mail the IFCBAA Training Department.

Contact us

If you are an Australian company or individual requiring advice on any aspect of the NACC Act, or would like to discuss the NACC in greater detail, please contact our Customs & Trade team.