Senate

Revised Explanatory Memorandum

(Circulated by authority of the Attorney-General, the Hon Mark Dreyfus KC MP)

PART 2 KEY CONCEPTS USED IN THIS ACT

2.1 This Part would set out the key concepts that would establish the Commissioner's jurisdiction to:

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deal with corruption issues (as defined in clause 9) concerning allegations of corrupt conduct (as defined in clause 8) by public officials (as defined in clause 10), as well as any person whose conduct adversely affects, or could adversely affect, the honest or impartial exercise by a public official of their powers, functions or duties; and

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where the Commissioner is of the opinion that a corruption issue could involve corrupt conduct that is serious or systemic-investigate the issue (as provided for in clause 41).

2.2 The definition of corrupt conduct would be central to the operation of the NACC Bill, and to the Commissioner's jurisdiction. The definition would incorporate elements drawn from the LEIC Act and legislation establishing State and Territory anti-corruption bodies, and would cover criminal and non-criminal forms of corrupt conduct.

2.3 The Commissioner would be able to deal with corruption issue s-being an issue of whether a person has engaged in, is engaging in, or will engage in corrupt conduct-in a number of ways (see clause 41).

2.4 The Commissioner would have broad jurisdiction to investigate corruption issues that could involve corrupt conduct that is serious or systemic by public officials-including Commonwealth ministers, parliamentarians, staff members of Commonwealth agencies (including staff members of parliamentarians), statutory office holders and contracted service providers. This broad jurisdiction would ensure that, where an individual exercises powers or performs functions on behalf of the Commonwealth in any capacity, they are likely to be within the Commission's jurisdiction, regardless of the exact nature of their role. There would only be very limited exceptions to this general principle (see paragraph 2.141).

2.5 The Commissioner would also have jurisdiction to investigate a corruption issue that could involve serious or systemic conduct by any person that could adversely affect the honesty or impartiality of a public official's conduct. This would ensure that the Commissioner could fully investigate serious or systemic corrupt conduct and transactions between public officials and third parties, as well as attempts by third parties to corrupt public officials.

2.6 The seriousness of particular instances of corrupt conduct or alleged corrupt conduct may vary significantly. The Commissioner would be able to deal with less serious corruption issues in other ways, for example, by referring the issue to the relevant Commonwealth agency for internal investigation. This would ensure that the Commissioner could focus their resources and capabilities on the investigation of serious or systemic corrupt conduct, while providing avenues for other corruption issues to be addressed by other agencies.

Division 1-Corrupt conduct and corruption issues

2.7 This Division would define corrupt conduct and corruption issue.

Clause 8 - Meaning of corrupt conduct

2.8 This clause would define corrupt conduct. This clause is not intended to establish a new standard of conduct by public officials or alter the relationship between those officials and the public as reflected in Australia's system of representative and responsible government. Rather, this clause is intended to reflect long-standing standards of conduct by public officials and their existing duty, including the duty to act in the public interest. This clause would enliven the NACC's jurisdiction to deal with alleged conduct that breaches those standards and duties and to investigate those allegations that concern serious or systemic conduct. Corrupt conduct within the NACC's jurisdiction would be defined in subclause 8(1) as follows:

(a)

any conduct of any person (whether or not a public official) that adversely affects, or could adversely affect, either directly or indirectly:

(i)

the honest or impartial exercise of any public official's powers as a public official; or

(ii)

the honest or impartial performance of any public official's functions or duties as a public official;

(b)

any conduct of a public official that constitutes or involves a breach of public trust;

(c)

any conduct of a public official that constitutes, involves, or is engaged in for the purpose of abuse of the person's office as a public official;

(d)

any conduct of a public official, or former public official, that constitutes or involves the misuse of information or documents acquired in the person's capacity as a public official.

2.9 Paragraphs 8(1)(a) to (d) of the definition of corrupt conduct are intended to be complementary and mutually reinforcing, rather than mutually exclusive. A particular instance of corrupt conduct may be covered by more than one of paragraphs 8(1)(a) to (d).

2.10 While the definition largely focuses on the conduct of public officials, the definition of corrupt conduct would extend to the conduct of other persons (third parties) in two ways:

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if their conduct adversely affects, or could adversely affect, the honest or impartial exercise of a public official's powers, or the honest or impartial performance of a public official's functions and duties (see paragraphs 2.11 to 2.29); and

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if they conspire with another person (whether or not a public official) for that other person to engage in corrupt conduct covered by subclause 8(1) (see paragraphs 2.58 to 2.59).

Conduct of any person - adversely affecting the honest and impartial exercise of powers or performance of functions.

2.11 Paragraph 8(1)(a) would provide that any person engages in corrupt conduct if they engage in conduct that does or could adversely affect the honest or impartial exercise or performance of official powers, functions or duties by a public official.

2.12 Honesty is a core and consistent requirement of a person performing functions or exercising powers as a public official. The term honest has its ordinary meaning and requires no elaboration.

2.13 The term impartial is intended to be understood in the context of Australia's system of representative and responsible government. Governments are elected to implement particular commitments, and to make policy and administrative decisions throughout a term of government. Some of those decisions will necessarily benefit some persons more than others. The New South Wales Court of Appeal considered the meaning of the term in the context of the definition of corrupt conduct in section 8 of the Independent Commission Against Corruption Act 1988 (NSW). In Greiner v Independent Commission Against Corruption (1992) 28 NSWLR 125 (in which the Court of Appeal provided declaratory relief nullifying the New South Wales Independent Commission Against Corruption's determination that the Premier of New South Wales, Mr Greiner, had engaged in corrupt conduct), Mahoney JA considered that partial conduct would only constitute corrupt conduct where there is an obligation to act in an impartial manner and a preference was given for a purpose extraneous to the power in question. Mahoney JA articulated (at 161) five elements to indicate partiality:

1. it occurs in the context in which two or more persons or interests are in contest, in the sense of having competing claims;

2. it indicates that a preference or advantage has been given to one of those persons or interests which has not been given to another;

3. the advantage must be given in circumstances where there was a duty or at least an expectation that no one would be advantaged in the particular way over the others but, in the relevant sense, all would be treated equally;

4. what was done in preferring one over the other was done for the purpose of giving a preference or advantage to that one; and

5. the preference was given for a purpose which was extraneous to the power in question.

Examples of conduct that would not be considered partial

2.14 In the context of Australia's representative democratic system of government, it would not be considered partial, in and of itself, for a Minister or public official to implement the election commitments or policy platform of the government of the day. For example:

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where a government has made a commitment to amend legislation in a particular way then, at face value, the third and fifth elements of Mahoney JA's concept of partiality listed above would not be satisfied-notwithstanding that some persons may benefit more than others, from the effect of the change to the legislation; and

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where a government has made an election commitment to provide a particular grant to a particular recipient then, subject to the rules of the grants program in question allowing the grant to be made in such a manner, at face value, the third or fifth elements of Mahoney JA's concept of partiality listed above would also not be satisfied.

2.15 A limited or single source tender may also be undertaken impartially. In situations where there is a compelling reason to adopt such an approach, there may be no reasonable expectation of equality. Where a limited or single source tender process is followed, the preference given to the sole-source contractor may be given for a proper purpose within the scope of the powers conferred on the official. For example, conducting a limited tender process to procure services that can only be provided by particular businesses on a panel, in compliance with the Commonwealth Procurement Rules, would likely not fall within Mahoney JA's concept of partiality and would be less likely to constitute corrupt conduct.

2.16 It may also be appropriate for a public official to employ staff in circumstances where there is not a merit-based recruitment requirement. For example, a Minister may appropriately employ ministerial staff under the Members of Parliament (Staff) Act 1984 without a merit-based recruitment process. Given the close relationship of trust or confidence, and the importance of political alignment, in such roles, there would be no expectation to undertake a merit-based recruitment process.

2.17 A Minister may exercise their discretion in recommending an appointment to a statutory office and can disagree with the advice of officials and reach a different conclusion as to the appropriate person for a role-provided their discretion is not exercised for an improper purpose.

Examples of conduct that could be considered partial

2.18 Failing to undertake a merits recruitment process in circumstances where such a process is required or expected could be considered partial and fall within the definition of corrupt conduct. In these circumstances, Mahoney JA's third limb of partiality may be satisfied as there would be an expectation that no one would be advantaged in a particular way. This could apply where, for example, a recruitment panel for an ongoing position within a department rated a candidate as suitable for engagement at a particular level because the candidate was a close friend or relative of a member of the panel. In that case, there would be a duty to treat all candidates equally, but one candidate would be given preference over other candidates, and that preference would be given for an improper purpose - namely, to advantage a friend or relative.

2.19 An allocation of grants for the purpose of gaining political advantage, or to provide a benefit to a political donor may also be considered partial and within the definition of corrupt conduct. Such a situation may meet Mahoney JA's third and fifth limbs of partiality. There would be an expectation that grants processes are generally conducted in the public interest and without regard to political considerations. A grants allocation that favours a political donor or confers another political advantage may also be extraneous to the power to give the grant. This situation should be distinguished from the situation where a decision-maker makes a grant in the public interest, in the expectation that they will receive acknowledgement or recognition-including political recognition- or exercising their powers in an effective manner, as discussed in greater detail at paragraph 2.36. It should also be distinguished from a situation where a government has made an election commitment to provide a grant to a particular recipient - in such circumstances there would be no duty or expectation of impartiality and the grant guidelines could provide for that outcome.

Corrupt conduct must be capable of adversely affecting the probity of a public official's conduct

2.20 Paragraph 8(1)(a) is limited to conduct that could adversely affect the honesty or impartiality (collectively, the probity) of a public official's conduct in their capacity as a public official. It is not intended to cover:

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conduct that merely affects the efficacy of the performance of a public official's functions, or

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conduct that adversely affects the honesty or impartiality of a public official's conduct in a private capacity.

2.21 This approach reflects the majority opinion of the High Court in Independent Commission Against Corruption v Cunneen (2015) 256 CLR 1. In that case, the Court considered the meaning of 'adversely affects' used in the definition of corrupt conduct in subsection 8(2) of the Independent Commission Against Corruption Act 1988 (NSW). The majority reasoned (at 10) that extending a definition of corrupt conduct to conduct (for example fraud) adversely affecting the efficacy of an official function would 'result in the inclusion in "corrupt conduct" of a broad array of criminal offences and other unlawful conduct having nothing to do with the ordinary understanding of corruption in public administration'.

2.22 It is also appropriate to ensure the Commissioner does not exercise their coercive powers with respect to conduct having nothing to do with the ordinary understanding of corruption in public administration. The more limited application of paragraph 8(1)(a) to conduct adversely affecting the probity of official decision-making, as opposed to its efficacy, helps to ensure the Commissioner exercises their powers appropriately. This would address a key concern the majority expressed in Cunneen.

2.23 In Australia's representative democratic system of government, it is expected that private citizens and businesses, among others, will engage with parliamentarians and other public officials to advocate on behalf of their own and other persons' interests. Paragraph 8(1)(a) would not cover partial conduct by a third party, unless that conduct could adversely affect the probity of a public official's conduct. For example, a person who merely vigorously lobbies a public official to present the merits of the person's position or those of their client would not be covered by the concept of corrupt conduct, where nothing in the conduct or the relevant circumstances could be expected to induce or influence a public official to exercise a power dishonestly or partially.

2.24 On the other hand, a person offering a payment or benefit conditional on a decision-maker exercising a power in a particular way would likely be considered to adversely affect the honest and impartial exercise of that decision-maker's power.

Conduct of one public official affecting the probity of a second public official's conduct

2.25 Paragraph 8(1)(a) would apply to the conduct of one public official that could adversely affect the probity of the conduct of a second public official-for example, a senior official using their influence to pressure a junior staff member to make a dishonest or partial decision could be captured under paragraph 8(1)(a). Such conduct could, depending on all of the circumstances, also constitute an abuse of office by the first public official, for the purposes of paragraph 8(1)(c).

Conduct of certain individuals is not covered by paragraph 8(1)(a)

2.26 Paragraph 8(1)(a) would not apply in relation to conduct of any of the following persons:

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the Governor-General and Deputy Governor-General;

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a Justice of the High Court or a judge of a court created by the Parliament;

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a judge of a court of a State or Territory;

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a member of a Royal Commission; or

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the Inspector or a person assisting the Inspector.

2.27 The definition of public official also does not apply to these persons (clause 12(5) and paragraph 2.141). The effect of these two carve-outs is that these persons are not capable of engaging in corrupt conduct within the NACC's jurisdiction. These carve-outs are appropriate to:

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ensure that Ministers alone are responsible for their decisions, including those given effect to by the Governor-General who, by constitutional convention, acts on the advice of Ministers (in the case of the Governor-General and Deputy Governor-General);

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maintain proper separation between the Executive and Judicial branches of government (in the case of a Justice of the High Court, a judge of a court created by the Parliament, or a judge of a court of a State or Territory);

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prevent improper interferences by a Commonwealth executive body in State and Territory judicial decision-making (in the case of a judge of a court of a State or Territory);

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prevent inappropriate interference with time-critical investigations and proceedings, and maintain proper independence from government (in the case of a Royal Commissioner); and

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preclude the NACC from interfering with the effective oversight of the exercise of its powers and performance of its functions (in the case of the Inspector or a person assisting the Inspector).

Conduct affecting public official's own powers or functions

2.28 Subclause 8(3) provides that paragraph 8(1)(a) would cover a public official's own conduct, if it has, or could have, the specified adverse effects in relation to the public official's powers, functions or duties. For example, if a public official attempts to solicit a bribe from a third party, but the third party refuses, the public official could still be found to have engaged in conduct that adversely affects their own honest or impartial exercise of its powers, functions, or duties.

Dishonest conduct that is in the proper performance of a public official's functions or duties

2.29 There are limited circumstances where it is within the functions or duties of certain public officials to engage in conduct that may involve dishonesty or partiality-for example, an undercover police officer using an assumed identity in accordance with Part IAC of the Crimes Act 1914 may mislead persons as to their identity, such as when undertaking an undercover police operation. Paragraph 8(1)(a) applies only to conduct that could adversely affect the honest or impartial exercise of powers, or the performance of functions or duties by a public official-it does not apply to conduct constituting the proper exercise of a power, or the proper performance of function or duty, merely because that conduct involves dishonesty or partiality.

2.30 A member of the AFP would not engage in corrupt conduct, within the meaning of paragraph 8(1)(a), where the member:

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works with an organised criminal group to purportedly import a controlled substance as part of a controlled operation under Part IAB of the Crimes Act 1914;

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authorises the use of, or uses an assumed identity in accordance with Part IAC of the Crimes Act 1914; or

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provides a payment or benefit to a human source in exchange for information as part of a criminal investigation.

Conduct of a public official-Breach of public trust

2.31 Paragraph 8(1)(b) would provide that conduct of a public official that constitutes or involves a breach of public trust would amount to corrupt conduct.

2.32 Public office is a public trust-public officials hold their official powers, functions and duties on trust for the public, and are expected to exercise their powers, and to perform their functions and duties, for the purpose for which those powers, functions and duties were conferred. Public officials are also expected to exercise official powers in the public interest.

2.33 If a public official exercises their official powers for an improper purpose, or exercises their powers or performs their functions and duties contrary to the purpose for which those powers, functions or duties were conferred, their conduct would amount to a breach of public trust (see Greiner v Independent Commission Against Corruption (1992) 28 NSWLR 125, 165 (Mahoney JA)). The concept of a breach of public trust does not require that the abuse of entrusted power or an official position be for personal gain or the benefit of a third party; the key feature of a breach of trust is the exercise of a power, or the performance of a function or duty, for an improper purpose.

2.34 Whether conduct can be characterised as a breach of the public trust will depend on the exact circumstances. Accordingly, breach of public trust could include the following conduct but it would not be limited to these examples:

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official misconduct or misconduct in public office;

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showing partiality in the exercise of official powers in order to advance a personal interest;

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using, applying, or awarding public resources to achieve a purpose for which those resources were not appropriated, designated or otherwise given.

2.35 Decision-making in public office, and the determination of the public interest, can involve the weighing of multiple competing factors and the exercise of judgment. In the absence of an improper purpose, it is not a breach of public trust for a decision-maker to disagree with the advice of officials or reach a different conclusion as to the public interest, and thereby make a different decision to that which has been recommended-provided that, in doing so, the decision-maker does not make the decision or exercise a power for an improper purpose.

2.36 Decisions may be made, and powers may be exercised, for multiple or 'mixed' purposes. It is possible for a public official to exercise their powers in a way that achieves both the legitimate purpose for which the power was granted, and another improper purpose. In these cases, if the public official would not have exercised their power but for the improper purpose, their conduct may still constitute or involve a breach of public trust. This is the case even if the improper exercise of powers, functions or duties produced a real public benefit. For a decision to amount to a breach of public trust, it would generally be necessary to establish the causative role of the improper purpose in motivating the decision, in the sense that the decision would not have occurred 'but for' the improper purpose (Maitland v R; Macdonald v R (2019) 99 NSWLR 376, [67]). In an administrative law context, see also: Klein v Domus Pty Ltd (1963) 109 CLR 467 at 473 (the improper purpose was the 'dominating, actuating reason for the decision') and Thompson v Randwick Municipal Council (1950) 81 CLR 87 at 106 (the improper purpose was 'a substantial purpose in the sense that no attempt would be made to act in the same way the decision required if that improper purpose had not existed').

2.37 Comparatively, it would not be a breach of public trust for a decision-maker to exercise a power for the purpose for which it has been conferred, in the hope that they will receive some acknowledgement, recognition or benefit for effectively performing their functions.

Conduct of a public official-Abuse of office

2.38 Paragraph 8(1)(c) would provide that conduct of a public official that constitutes, involves, or is engaged in for the purpose of abusing the person's office as a public official would constitute corrupt conduct.

2.39 The concept of an abuse of office by a public official involves the official engaging in improper acts or omissions in their official capacity, that the public official knows to be improper, with the intention of gaining a benefit for themselves or another person or causing a detriment to another person.

2.40 However, conduct may still constitute corrupt conduct even if it were not for the personal benefit of the public official or other persons involved in the conduct (see subclause 8(8) and further information at paragraph 2.54). In the context of an abuse of office, this means that a public official may still abuse their office if the public official intended to cause a benefit that was indirect, intangible, or several steps removed from themselves or the other persons involved in their conduct. An abuse of office can be committed through the exercise of influence arising from the person's public office or the use of information obtained in their capacity as a public official, along with any other conduct in that capacity.

2.41 For example, a senior public servant may engage in an abuse of office if they use their seniority to influence a decision-making panel comprised of more junior public servants to make a decision that benefits a friend or family member-notwithstanding that there is no direct benefit to the senior public servant from that outcome.

2.42 Further, an individual (the first person) responsible for processing claims for financial assistance, and who has obtained information concerning another individual's (the second person) financial situation, may engage in an abuse of office if they use that information to the detriment of the second person-such as by using that information to pressure the second person to agree to sell a property or asset on unfavourable terms.

Conduct of a public official-Misuse of information acquired in capacity as a public official

2.43 Paragraph 8(1)(d) would provide that conduct of a public official, or a former public official, that constitutes or involves the misuse of information or documents acquired in the person's capacity as a public official constitutes corrupt conduct.

2.44 The concept of a misuse of information or documents acquired in a person's capacity as a public official is intended to cover conduct ranging from, for example, simple unauthorised access to information through to the unlawful sale of classified information or documents to a third party. All conduct on this spectrum is capable of being characterised as corrupt conduct. The Commissioner would only be able to investigate a corruption issue after forming an opinion the relevant conduct could constitute serious or systemic corrupt conduct.

2.45 Corrupt conduct constituting or involving the misuse of information could encompass the following conduct, but would not be limited to these examples:

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a public servant in the ATO browsing through a celebrity's tax returns when they have no need to access that information;

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a public servant or law enforcement officer who is a domestic violence perpetrator using an official database to access a former partner's personal information;

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a Border Force officer disclosing sensitive information about their work practices to enable an organised crime syndicate to import illegal cargo into Australia; and

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a recently-resigned ministerial adviser disclosing market-sensitive and classified regulatory information gained in their capacity as a public official in exchange for a lucrative position with a participant in the regulated market.

Extensions, exclusions and clarifications

2.46 The definition of corrupt conduct would include provisions that:

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extend its application to corrupt conduct that occurred prior to the NACC's establishment and conduct amounting to a conspiracy or attempt to engage in corrupt conduct;

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exclude from its application conduct amounting to exercises of powers and functions of a judicial nature and conduct amounting to the use of public resources to conduct parliamentary business; and

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clarify its application to conduct that did not produce a direct personal benefit to the persons involved, and to conduct engaged in with the agreement or participation of others.

Extension to past corrupt conduct

2.47 The definition would extend to corrupt conduct that occurred before the NACC was established. This means:

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if a person engaged in conduct covered by the definition before the NACC's establishment, this conduct would be corrupt conduct within the NACC's jurisdiction; and

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if a former public official, who has ceased to be a public official before the NACC was established, had engaged in any conduct covered by the definition, their conduct would also be corrupt conduct within the NACC's jurisdiction.

2.48 It is appropriate that the Commissioner is able to investigate allegations of serious or systemic corrupt conduct that occurred before the NACC was established. This reflects the fact that the definition would not impose new standards of conduct in public administration, but would reflect long-standing community expectations of public officials, including the expectation to act in the public interest. It is possible that certain conduct involving public officials could have fallen short of these existing expectations before the NACC was established.

2.49 The definition would enable the Commissioner to investigate serious or systemic corrupt conduct that occurred prior to the NACC's establishment. The Commissioner would only be able to make a finding of corrupt conduct if the conduct fell within one of the limbs of the definition, at the time it occurred.

2.50 The definition would not establish a criminal offence, and so would not impose retrospective criminal liability for any conduct. Where the Commissioner conducts an investigation into past serious or systemic corrupt conduct and forms a view that the conduct could have constituted a criminal offence at the time it was committed, the Commissioner could refer that conduct and supporting evidence to the CDPP.

Exclusion of judicial powers, functions and duties

2.51 The definition of corrupt conduct would not include conduct engaged in by a staff member of the High Court or of a court created by the Parliament to exercise a power, or perform a function or duty of a judicial nature. Judges would also not be public officials within the NACC's jurisdiction (see clause 12 and paragraph 2.141). For example, court registrars' conduct would be excluded from the NACC's jurisdiction to the extent they are performing their judicial functions or duties. However, if a registrar engaged in corrupt conduct that was unconnected to their judicial functions or duties, their conduct would be within jurisdiction.

2.52 This exclusion is appropriate to maintain proper separation between the Executive and Judicial branches of government. The NACC would form part of the Executive. Accordingly, it should not interfere with the exercise of judicial power under Chapter III of the Constitution by investigating, referring, or making findings about conduct engaged in only to perform functions or duties, or exercise powers of a judicial nature.

2.53 Further, the definition would not extend to conduct of any person if it only affected the exercise of power, or the performance of a function or duty, of a judicial nature by a public official who is a staff member of the High Court or of a court created by the Parliament.

Clarifying that conduct need not be for personal benefit

2.54 A person does not need to gain a personal benefit in order to engage in corrupt conduct. In some cases, it will be unclear whether the person's conduct involves the person receiving a direct benefit. In other cases, the benefit may be intangible or several steps removed from the persons involved in the conduct. The definition clarifies that corrupt conduct would be within jurisdiction even if there is no direct benefit to the person or public official involved in the conduct.

2.55 For example, a third party could offer to give a benefit to a relative of a public official to induce the public official to make a decision that favours a friend of the third party. The fact that neither the public official nor the third party received a direct benefit from the conduct would not prevent the Commissioner from investigating this corruption issue, if they were of the opinion it was serious or systemic.

Conduct may be corrupt whether engaged in alone or with others

2.56 A person or public official would not need to be solely responsible or engage in corrupt conduct alone for their conduct to be within the NACC's jurisdiction. This clause would provide that a person may engage in corrupt conduct alone, or with the agreement or participation of other persons (whether or not those persons are public officials). Subclause 8(9) would clarify that a person still engages in corrupt conduct even if other people are participating in the conduct or have agreed to engage in the conduct.

2.57 This rule would not affect whether the other person engaged in corrupt conduct. That person's conduct would only be corrupt or give rise to a corruption issue concerning that person if it satisfied subclause 8(1) or if it constituted a conspiracy to engage in corrupt conduct (see paragraphs 2.58 to 2.59).

Extension to conduct amounting to conspiracy or attempt

2.58 This clause would provide that conduct comprising conspiracy or an attempt to commit or engage in conduct covered by subclause 8(1) is itself corrupt conduct. This would ensure that the Commissioner can investigate persons who attempt, but fail, to engage in corrupt conduct, as well as persons who do not directly engage in corrupt conduct but are nonetheless involved in another person's corrupt conduct.

2.59 A person may also engage in corrupt conduct through either planning or attempting to engage in conduct covered by subclause 8(1). However, there must still be a level moral impropriety, and an overt act, involved in the planning or attempt to engage in corrupt conduct. For example, a hypothetical one-off discussion between two public officials in a Commonwealth agency about engaging in corrupt conduct could not, without more, constitute corrupt conduct. On the other hand, an explicit agreement and plan between a public official and a third party to dishonestly exercise the public official's powers in exchange for benefits which would be shared between the public official and the third party may constitute corrupt conduct.

Clarification that conducting parliamentary business using public resources is not corrupt conduct

2.60 Subclauses 8(11) and (12) would provide that, to avoid doubt, the use of public resources by a parliamentarian to conduct parliamentary business in accordance with the Parliamentary Business Resources Act 2017 or the Members of Parliament (Staff) Act 1984 does not constitute corrupt conduct. This would be intended to clarify that the legitimate use of resources within these frameworks would not be considered corrupt conduct for the purposes of the NACC Bill.

2.61 The Parliamentary Business Resources Act 2017 is intended to remain as the central framework to govern the use of public resources by members of Parliament in connection with parliamentary business. It recognises that members of Parliament should be able to access public resources for reasonable costs incurred in conducting their parliamentary business, if they meet their obligations to the public in relation to the use of those resources. Under this framework, members of Parliament have obligations to use public resources for the dominant purpose of conducting parliamentary business and to ensure expenses provide value for money. Expenses provide value for money if they use public money efficiently, effectively and economically, consistent with the obligation on the proper use of public resources by Commonwealth officials under the PGPA Act.

2.62 The parliamentary business of a member includes:

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parliamentary duties (activities that relate directly to the member's role as a member of the Parliament);

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electorate duties (activities that support or serve the member's constituents);

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party political duties (activities that are connected with the member's political party and their membership of the Parliament); and

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official duties (activities that relate to the member's role as an officer holder or Minister of State).

2.63 Further detail on each of these terms is contained in the Parliamentary Business Resources (Parliamentary Business) Determination 2017.

2.64 An activity of a member is not the parliamentary business of a member if the member carries it out for the dominant purpose of either providing a personal benefit to another person or pursuing a commercial purpose of the member or another person.

2.65 Public resources under the Parliamentary Business Resources Act 2017 include expenses, allowances, and any goods, services, premises, equipment or facilities that are available to support a member in conducting parliamentary business. For example, that Act covers travel and accommodation costs, and allowances or the provision of an electorate office.

2.66 Political activities that do not involve the use of public resources would not fall within the scope of the NACC's jurisdiction.

2.67 IPEA is responsible for auditing and reporting on parliamentarian's work expenses and those of their staff. IPEA has a specific power to make a ruling determining that conduct engaged in by a particular member or any other person in relation to travel expenses of, or travel allowances for, was or was not in accordance with the Parliamentary Business Resources Act 2017.

2.68 Conduct that is not in accordance with the Parliamentary Business Resources Act 2017 could be considered corrupt conduct and form the basis of a corruption issue if it met other parts of the definition. In such circumstances, the Commissioner would be able to deal with the conduct under clause 40. However, the circumstances in which the Commissioner may decide to deal with such a corruption issue by commencing an investigation would be limited if it involves conduct that would fall within IPEA's jurisdiction (see clause 46). The Commissioner could only investigate such conduct if IPEA has referred the corruption issue to the Commissioner.

2.69 The Members of Parliament (Staff) Act 1984 provides a framework for the engagement of staff by parliamentarians including recruitment, duties and services during employment, and ceasing current employment.

2.70 Under the Members of Parliament (Staff) Act 1984 and other instruments made under that Act, parliamentarians are entitled to use public resources to employ persons as either personal or electorate office staff. Ministers may also engage consultants as contractors.

2.71 This framework is intended to provide a single, consistent source of guidance on the engagement of staff by parliamentarians. The Commissioner would only be able to deal with conduct that was not in accordance with this framework.

2.72 The intention of these subclauses is to provide clarity and certainty to members of parliament in relation to their legitimate use of business resources and engagement of staff, while still allowing the Commissioner to investigate conduct that does not comply with this framework that could involve serious or systemic corrupt conduct-such to the requirement for conduct to be referred by IPEA.

Clarification regarding political activities

2.73 Subclause 8(13) would provide that, to avoid doubt, conduct engaged in as part of a political activity does not constitute corrupt conduct if the conduct does not involve or affect either of the following:

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the exercise of power, or the performance of a function or duty, by a public official; or

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the use of public resources within the meaning of the PGPA Act.

2.74 The term 'political activity' would not be further defined, and is intended to refer to activity designed to attain a purpose by the use of political power or by activity in political channels. It is intended to include, for example:

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the internal affairs of political parties' and individual candidates' campaigns; and

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activities such as political campaigning or advertising, fundraising events, or campaign meetings, involving parliamentarians and candidates for political office, political parties, and third parties.

2.75 Such activities, where undertaken in a manner that does not involve or affect the exercise of power, or the performance of a function or duty, by a public official or the use of public resources would not involve corrupt conduct.

2.76 'Public resources' are defined under the PGPA Act as:

•

relevant money - which means money standing to the credit of any bank account of the Commonwealth or a corporate Commonwealth entity, or money held by the Commonwealth or a corporate Commonwealth entity;

•

relevant property - which means property (other than money) owned or held by the Commonwealth or a corporate Commonwealth entity; or

•

appropriations - being moneys appropriated from the Consolidated Revenue Fund to fund expenditure by the Government.

2.77 A political activity would not involve the use of public resources merely because it involves the use of funds:

•

that have previously been appropriated and provided to a political party or candidate following a previous election in accordance with Part XX of the Commonwealth Electoral Act 1918;

•

the political party or candidate expects to receive or claim under that Part of the Commonwealth Electoral Act 1918.

2.78 The expenditure of such funds, once received by a political party or candidate, would not involve 'expenditure by the Government'.

2.79 This subclause is intended to provide clarity and certainty regarding the circumstances in which political activities would not be characterised as corrupt, in the context of Australia's representative democratic system of government. For example, a parliamentarian, political party or third party interest group that publicly campaigns on a particular policy issue could not be regarded as corruption in a democratic society. Political activities would only be capable of constituting corrupt conduct if they do or could adversely affect the probity of a public official's conduct (see paragraph 2.20), or involve the use of public resources. It is not appropriate for the definition of corrupt conduct to extend to political activities that have no effect on the probity of public administration, or where no public resources have been used.

Clause 9 - Meaning of corruption issue

2.80 This clause would provide the definition of corruption issue. Corruption issues may be dealt with by the Commissioner in accordance with clause 40, including by investigating the issue where the Commissioner is of the opinion that the corruption issue could involve corrupt conduct that is serious or systemic.

2.81 A corruption issue would be an issue of whether a person:

•

has already, at some time in the past, engaged in corrupt conduct as defined in clause 8;

•

is currently engaging in corrupt conduct; or

•

will, at any time in the future, engage in corrupt conduct.

2.82 A corruption issue is a key concept that would establish the scope of the NACC's jurisdiction. The Commissioner would only be empowered to deal with a corruption issue. A corruption issue is a question about potential corrupt conduct (see clause 8) that arises for potential investigation on the basis of an allegation or other information that suggests a person may have engaged in corrupt conduct, or is engaging or will engage in that conduct. The purpose of the investigation would be to test any allegation and, where appropriate, make an assessment on the corruption issue, that is, to determine whether the person engaged in the alleged corrupt conduct or is engaging or will engage in that conduct.

When an allegation or information raises a corruption issue

2.83 For an allegation, or other information, to give rise to a corruption issue, the allegation or information would need to give rise to, bring up, or put forward all of the essential elements of a corruption issue, as defined. Central to the definition of a corruption issue is the related definition of corrupt conduct (see clause 8).

2.84 If an allegation or information concerns conduct that would not satisfy the definition of corrupt conduct, the allegation would not give rise to a corruption issue that is within the Commissioner's jurisdiction to investigate or otherwise deal with. This is the case even if an allegation raises an issue concerning some other form of misconduct. The NACC would be a specialised investigative body tasked specifically with investigating serious or systemic corruption, and would only be able to deal with corrupt conduct as defined. However, in these circumstances, the Commissioner may:

•

refer allegations of misconduct outside of their jurisdiction to a more appropriate person or entity to investigate (see paragraph 6.26); or

•

conduct a preliminary investigation to determine the existence of a corruption issue and determine whether it could involve serious or systemic corrupt conduct (see clause 42).

Probative value of allegation or information not relevant at this stage

2.85 The probative value of the allegation or information would not be relevant to the question of whether it raises a corruption issue. It would not be necessary for the allegation or information to prove that a person engaged in corrupt conduct. However, the allegation or information would need to coherently allege, either explicitly or implicitly, that each element of the definition of corrupt conduct was present in the alleged conduct of the relevant person.

2.86 The probative value of the allegation or information would be relevant at a later stage, specifically to whether and how a corruption issue that is raised may and should be dealt with under the NACC Bill. The Commissioner may conduct a corruption investigation (if the Commissioner is of the opinion that the corruption issue could involve serious or systemic corrupt conduct) or otherwise require an investigation of a corruption issue and, in doing so, test the accuracy of an allegation.

2.87 The Commissioner need not investigate or otherwise deal with every allegation that raises a corruption issue (see paragraph 6.30).

Corruption issues concerning future conduct

2.88 A corruption issue would generally relate to conduct that is alleged to have occurred or to be ongoing. A corruption issue could also arise in the form of a question about whether a person will engage in corrupt conduct at some time in the future. This question may arise, for example, because of concerns that the integrity of a public official has been compromised.

Division 2-Public officials

Clause 10 - Meaning of public official

2.89 This clause would provide the definition of public official. A public official would be defined as:

•

a parliamentarian-the extended definition of a parliamentarian in clause 7 includes a Minister, and means an individual will be treated as a parliamentarian and a public official even when the relevant House of Parliament is dissolved and the individual is not a senator or member (see paragraphs 1.119 to 1.123);

•

a staff member of a Commonwealth agency (see clauses 11 and 12); or

•

a staff member of the NACC (see clause 266).

2.90 A person who is acting for and on behalf of, or as a deputy or delegate of, any of the persons or bodies set out in this clause will also be a public official.

Division 3-Commonwealth agencies and the heads of those agencies

Clause 11-Commonwealth agencies and the heads of those agencies

2.91 This clause would specify particular bodies that are Commonwealth agencies for the purpose of the NACC's jurisdiction. This clause would also specify the persons who are the heads of those Commonwealth agencies.

Table 3-Commonwealth agencies and the heads of those agencies

2.92 The Governor-General would be able to prescribe additional Commonwealth agencies in the regulations. A prescribed Commonwealth agency would need to be:

•

established for a public purpose; and

•

established by, or under, a law of the Commonwealth (other than a general law allowing incorporation as a company or body corporate).

Parliamentary offices

2.93 A parliamentary office would consist of the staff of the office, primarily persons engaged under the Members of Parliament (Staff) Act 1984 (see paragraph 2.119).

2.94 A parliamentarian would be the head of a parliamentary office but would not be considered a staff member of the office (see paragraph 2.119). A parliamentarian would still be a public official subject to the NACC's jurisdiction.

2.95 The extended definition of a parliamentarian in clause 7 means that a parliamentary office may continue to exist even when the relevant House of Parliament is dissolved and the parliamentarian is not a senator or member (see paragraphs 1.119 to 1.121).

Commonwealth entities

2.96 A Commonwealth entity (as referenced at item 2 of Table 3) is:

•

a Department of State;

•

a parliamentary department established under the Parliamentary Service Act 1999, for example the Department of Parliamentary Services;

•

a listed entity, as prescribed by an Act or Schedule 1 to the PGPA Rule, for example the ATO or the AFP;

•

a body corporate that is established by a law of the Commonwealth, for example the Commonwealth Scientific and Industrial Research Organisation; or

•

a body corporate that is established under a law of the Commonwealth (other than a Commonwealth company) and is prescribed by an Act or the PGPA Rule to be a Commonwealth entity, for example Land Councils listed in section 7A of the PGPA Rule.

2.97 The accountable authorities of Commonwealth entities are listed in section 12 of the PGPA Act, and include the Secretary of a Department of State or Parliamentary Department, and the governing body of a body corporate (for example, the board). For listed entities, the law prescribing the listed entity will prescribe the accountable authority of the entity.

2.98 The High Court and the Future Fund Board of Guardians are not Commonwealth entities and their positions in relation to the NACC Bill are outlined in paragraphs 2.101 to 2.103, 2.112 and 2.113.

Commonwealth companies and subsidiaries

2.99 A Commonwealth company (as referenced in item 3 of Table 3) is a body corporate that is incorporated, or taken to be incorporated, under the Corporations Act 2001 that the Commonwealth controls directly (see section 89 of the PGPA Act). For example, NBN Co Limited is a Commonwealth company.

2.100 A subsidiary of a corporate Commonwealth entity or a Commonwealth company (as referenced at item 4 of Table 3) means an entity that is controlled by the corporate Commonwealth entity or Commonwealth company (see section 8 of the PGPA Act).

The High Court

2.101 The High Court (as referenced at item 5 of Table 3) is specifically listed as a Commonwealth agency for the purposes of the NACC Bill because the High Court is not a Commonwealth entity for the purposes of the PGPA Act.

2.102 The Chief Executive and Principal Registrar of the High Court is the head of the agency for the purposes of the NACC Bill.

2.103 For the purposes of the NACC Bill, the High Court does not include the Justices of the High Court, who do not fall within the NACC's jurisdiction (see paragraph 2.141).

The Australian Geospatial-Intelligence Organisation and the Defence Intelligence Organisation

2.104 The Australian Geospatial-Intelligence Organisation and the Defence Intelligence Organisation (as referenced at items 6 and 7 of Table 3) ordinarily form part of the Department of Defence, a Commonwealth entity and Commonwealth agency for the purposes of the NACC Bill. However, the organisations would be treated as separate Commonwealth agencies for the purposes of the NACC Bill.

2.105 The arrangements for the Australian Geospatial-Intelligence Organisation and the Defence Intelligence Organisation reflect the specialist intelligence functions of those Organisations and their oversight by the IGIS, and facilitate their classification as intelligence agencies for the purposes of the NACC Bill. Although the Organisations form part of the Defence Department for other purposes, the Organisations are organised in a way that is sufficiently separate from the Department to allow them to be treated as separate Commonwealth agencies for the purposes of the NACC Bill.

2.106 The Director of each organisation would be the head of the relevant Commonwealth agency for the purposes of the NACC Bill.

The Inspector-General of the Australian Defence Force

2.107 The Inspector-General of the Australian Defence Force (as referenced at item 8 of Table 3) ordinarily forms part of the Department of Defence, a Commonwealth entity and Commonwealth agency for the purposes of the NACC Bill. However, the Inspector-General would be treated as a separate Commonwealth agency for the purposes of the NACC Bill. This would ensure the Inspector-General maintains its independence from the Department of Defence, which it oversees.

2.108 The Inspector-General of the Australian Defence Force would be the head of the relevant Commonwealth agency for the purposes of the NACC Bill.

The Inspectors-General and the Department of Agriculture, Fisheries and Forestry

2.109 For the purposes of the NACC Bill, the Inspector-General of Biosecurity, the Inspector-General of Live Animal Exports and the Inspector-General of Water Compliance would each be taken to be Commonwealth agencies in their own right, and not to be part of the Department of Agriculture, Fisheries and Forestry. This would ensure the Inspectors-General maintain their independence from the Department of Agriculture, Fisheries and Forestry, which they oversee.

2.110 Each Inspector-General would be the head of the relevant Commonwealth agency for the purposes of the NACC Bill.

The National Anti-Corruption Commission

2.111 The NACC would not itself be a Commonwealth agency. However, NACC staff members would be public officials. The NACC and its staff would be subject to special oversight arrangements (see Part 10).

The Future Fund Board of Guardians

2.112 The Fund Board of Guardians is not a Commonwealth entity (subsection 10(2) of the PGPA Act) and would not be a Commonwealth agency in its own right for the purposes of the NACC Bill. However, the members of that Board would be staff members of the Future Fund Management Agency for the purposes of the NACC Bill because the purposes of the Agency include assisting the Board (see section 75 of the Future Fund Act 2006 and paragraph 2.133).

2.113 The Chair of the Board is the accountable authority for the Future Fund Management Agency and would be the head of the Agency for the purposes of the NACC Bill.

Division 4-Staff members of Commonwealth agencies

Clause 12-Meaning of staff member - Commonwealth agencies

2.114 This clause would specify which individuals are staff members of Commonwealth agencies.

2.115 This clause is intended to apply broadly. The majority of individuals carrying out official functions on behalf of the Commonwealth, in any capacity, will be designated as staff members of a Commonwealth agency under the NACC Bill. This means conduct of those individuals, if corrupt, would fall within the NACC's jurisdiction. Similarly, conduct that could affect the honesty or impartiality of those persons in their official capacity may also fall within the NACC's jurisdiction.

2.116 Only very limited exemptions would apply to the broad framing of staff member, for example judges, the Governor-General and Royal Commissioners.

2.117 The following paragraphs explain in detail the legal bases on which each class of individual is considered to be a staff member of a Commonwealth agency. This is primarily of importance to determine which agency or agencies an individual is working for as a staff member. That, in turn, determines which agency heads have responsibility for referring corrupt conduct of that individual (see for example clause 33). These considerations do not have a significant effect on how the Commissioner exercises their jurisdiction or conducts a corruption investigation.

2.118 Generally, an individual would be treated as being a staff member of a single Commonwealth agency. However, there may be some circumstances where it is appropriate that a staff member be a staff member of multiple agencies, for example:

•

a secondee who is both a staff member of their home agency and the host agency; and

•

an employee of a contracted service provider who provides services under a Commonwealth contract to multiple agencies.

2.119 The following would be staff members of a Commonwealth agency:

•

the head of the agency for the purposes of the NACC Bill (except for parliamentarians);

•

individuals employed or engaged as consultants by a parliamentarian under Part III, IV, or II of the Members of Parliament (Staff) Act 1984;

•

officials of a Commonwealth entity-generally a person who is in, or forms part of, the entity (see section 13 of the PGPA Act);

•

employees of the agency and employees of a staff member of the agency who are engaged on behalf of the Commonwealth;

•

officers and directors of a Commonwealth company or a subsidiary;

•

contracted service providers (see paragraph 2.147) who are individuals, and the employees and officers of contracted service providers who provide goods or services for a Commonwealth contract; and

•

secondees to the agency.

2.120 The reference to officials of a Commonwealth entity being 'officials' within the meaning of the PGPA Act, of the entity:

•

includes persons who are prescribed to be officials of a Commonwealth entity by an Act or the PGPA Rule, in accordance with paragraph 13(1)(c) of the PGPA Act-for example, the PGPA Rule prescribes that a member of the ADF is an official of the Department of Defence; and

•

excludes persons who are prescribed to not be officials of a Commonwealth entity by an Act or the PGPA Rule, in accordance with paragraph 13(2)(c) of the PGPA Act-for example, the PGPA Rule prescribes that an officer, instructor or cadet in the Australian Air Force Cadets, the Australian Army Cadets, or the Australian Navy Cadets is not an official of the Department of Defence.

The High Court

2.121 Special rules would apply to the High Court, which is not a Commonwealth entity under the PGPA Act, given its constitutional status. The staff members of the High Court would be:

•

the head of the agency (the Chief Executive and Principal Registrar of the High Court);

•

contracted service providers (see paragraph 2.147) who are individuals, and the employees and officers of contracted service providers who provide goods or services for a Commonwealth contract;

•

secondees to the High Court; and

•

individuals who are appointed or engaged as an officer or employee of the High Court under section 26 of the High Court of Australia Act 1979.

2.122 For the purposes of the NACC Bill, the High Court does not include the Justices of the High Court, who are beyond the NACC's jurisdiction (see paragraph 2.141).

The Australian Geospatial-Intelligence Organisation and the Defence Intelligence Organisation

2.123 Special rules would apply to the Australian Geospatial-Intelligence Organisation and the Defence Intelligence Organisation. The staff members of each organisation would be:

•

the head of the agency (the Director of the Australian Geospatial-Intelligence Organisation and the Director of the Defence Intelligence Organisation);

•

contracted service providers (see paragraph 2.147) who are individuals, and the employees and officers of contracted service providers who provide goods or services for a Commonwealth contract;

•

secondees to the relevant agency; and

•

individuals who are employed in the relevant organisation.

The Inspector-General of Biosecurity

2.124 Special rules would apply to the Inspector-General of Biosecurity. The staff members of the agency would be:

•

the head of the agency (the Inspector-General of Biosecurity);

•

contracted service providers (see paragraph 2.147) who are individuals, and the employees and officers of contracted service providers who provide goods or services for a Commonwealth contract;

•

secondees to the agency; and

•

individuals engaged under the Public Service Act 1999 who assist the Inspector-General of Biosecurity.

The Inspector-General of Live Animal Exports

2.125 Special rules would apply to the Inspector-General of Live Animal Exports. The staff members of the agency would be:

•

the head of the agency (the Inspector-General of Live Animal Exports);

•

contracted service providers (see paragraph 2.147) who are individuals, and the employees and officers of contracted service providers who provide goods or services for a Commonwealth contract;

•

secondees to the agency; and

•

individuals acting under the authority of the Inspector-General of Live Animal Exports.

The Inspector-General of Water Compliance

2.126 Special rules would apply to the Inspector-General of Water Compliance. The staff members of the agency would be:

•

the head of the agency (the Inspector-General of Water Compliance);

•

contracted service providers (see paragraph 2.147) who are individuals, and the employees and officers of contracted service providers who provide goods or services for a Commonwealth contract;

•

secondees to the agency; and

•

individuals engaged under the Public Service Act 1999 who assist the Inspector-General of Water Compliance.

The Inspector-General of the Australian Defence Force

2.127 Special rules would apply to the Inspector-General of the Australian Defence Force. The staff members of the agency would be:

•

the head of the agency (the Inspector-General of the Australian Defence Force);

•

contracted service providers (see paragraph 2.147) who are individuals, and the employees and officers of contracted service providers who provide goods or services for a Commonwealth contract;

•

secondees to the agency; and

•

members of the staff of the Inspector-General of the Australian Defence Force.

The Administrative Appeals Tribunal

2.128 Special rules would apply to the AAT. The staff members of the agency would be:

•

a member (within the meaning of the AAT Act) of the AAT who is not a judge of a court created by the Parliament; and

•

a member of staff of the AAT.

2.129 Special rules for the AAT are necessary to prevent non-judicial staff members of the AAT from being treated as staff members of the Attorney-General's Department because of the operation of subclause 12(3) (see paragraph 2.134). The Registrar of the AAT would be the agency head of the AAT as its accountable authority (see subclauses 11(1) and 12(1)).

2.130 Consistent with other provisions excluding judges and judicial functions from the NACC's jurisdiction, a member of the AAT who is a judge cannot be a staff member of the AAT in their non-judicial capacity (see subclauses 8(2) and 12(5) and paragraphs 2.27 and 2.141). This is appropriate to maintain the separation between the Executive and Judicial branches of government.

Special rules apply in place of normal rules

2.131 Staff members of agencies with special rules are generally not staff members of another Commonwealth agency. For example, a person who is a staff member of the Australian Geospatial-Intelligence Organisation or the Defence Intelligence Organisation is not a staff member of the Department of Defence even though, for other purposes, those individuals are employees of the Department. However, an individual who is a contracted service provider to one of those Organisations might also be a contracted service provider to the Department of Defence if they have contracts that relate to both an Organisation and another part of the Department.

Statutory office holders

2.132 Statutory office holders and other individuals exercising Commonwealth powers could be staff members of a Commonwealth agency for the purposes of the NACC Bill.

2.133 A statutory office holder could be a staff member of an agency for different reasons, including because:

•

the office holder is the head of an agency for the purposes of the NACC Bill (paragraph 12(1)(b));

•

the office holder is an official or officer of the agency (paragraphs 12(1)(c) and (e));

•

a purpose of the agency is to assist the office holder or a body of which the office holder is a member (paragraph (a) of item 1 of the table in subclause 12(3)); or

•

the primary function of the office holder is to assist the agency or another staff member of the agency in the performance of their functions (paragraph (b) of item 1 of the table in subclause 12(3)).

2.134 Alternatively, if the office holder is not a staff member of a particular agency on one of the bases outlined above, the office holder would be treated as a staff member of the department administered by the minister that administers the law by or under which the office is established (paragraph (c) of item 1 of the table in subclause 12(3)).

Persons with functions or powers under a Commonwealth law

2.135 A person may exercise powers or perform functions conferred by or under a Commonwealth law without being a statutory office holder. Similarly, an individual may be a director, officer, employee or contractor of a body corporate that exercises powers, or performs functions, conferred on the body corporate by or under a law of the Commonwealth.

2.136 Such an individual, whether the functions or powers are conferred directly on them or on the body corporate, would be a staff member of a Commonwealth agency. If the power is exercised, or the function is performed, for the purpose of assisting a Commonwealth agency or another staff member of the agency in the performance of their functions, the individual would be a staff member of that agency. Alternatively, if the function or power does not have that purpose, the individual would be treated as a staff member of the department that administers the law that confers the function or power. This is appropriate to ensure that persons who are exercising statutory powers, or performing statutory functions on behalf of the Commonwealth, are within the NACC's jurisdiction.

2.137 For the purposes of this clause, a power or function conferred by or under the following laws would be disregarded:

•

a general law allowing incorporation as a company or body corporate (for example the Corporations Act 2001);

•

the Australian Capital Territory (Self Government) Act 1988;

•

the Northern Territory (Self Government) Act 1978; or

•

a provision of a law prescribed in the regulations.

2.138 Functions and powers conferred under those laws (for example the functions of a director of a private company) are not functions or powers of a public nature that would be appropriate to bring within the NACC's jurisdiction. Similarly, individuals exercising powers or functions conferred by or under a Commonwealth law who are officials of registered industrial organisations would not be staff members of a Commonwealth agency. The functions and powers exercised by these individuals are also not of a public nature.

Persons appointed under section 67 of the Constitution

2.139 A person appointed under section 67 of the Constitution would be treated as a staff member of the Department of the Prime Minister and Cabinet for the purposes of the NACC Bill. Appointments under section 67 are not common but might be made where, for example, there is a need for the appointee to operate independently from the Secretary of a department, or where the appointee is to have functions relating to whole-of-government issues.

Providing for individuals to be staff members of a different agency

2.140 The NACC Bill would allow regulations to be made to provide that an individual who would otherwise be a staff member of a particular Commonwealth agency because of the operation of clause 12 is a staff member of a different Commonwealth agency. As discussed at paragraph 2.114 to 2.117, which agency a staff member is working for is primarily of importance for determining which agency head has mandatory obligations to refer corruption issues to the NACC. This regulation-making power is appropriate to ensure that, as circumstances and practices change, individuals are still treated as staff members of the Commonwealth agency that is best-placed to refer corruption issues involving those individuals to the NACC.

Certain individuals are not staff members

2.141 None of the following individuals would be staff members of a Commonwealth agency:

•

the Governor-General and Deputy Governor-General;

•

a parliamentarian (however, parliamentarians are still public officials, see clause 10 and paragraph 2.89);

•

a Justice of the High Court or a judge of a court created by the Parliament;

•

a judge of a court of a State or Territory;

•

a member of a Royal Commission;

•

a staff member of the NACC (however, staff members of the NACC are still public officials, see clause 10 and paragraph 2.89);

•

the Inspector, or a person assisting the Inspector.

2.142 An individual listed above could not be a staff member of a Commonwealth agency even in a different capacity of the individual. For example, a judge who is a member of the AAT would not be a staff member of the AAT even though a non-judicial member of the AAT would be a staff member of the AAT.

2.143 At the Commonwealth level, excluding Justices of the High Court and judges of courts created by the Parliament maintains proper separation between the Executive and Judicial branches of government. The exclusion would prevent the NACC from improperly interfering with exercises of judicial power and judicial functions and duties by using its coercive powers to investigate a judge's conduct.

2.144 Excluding judges of State and Territory courts would also maintain that separation between executive and judicial power. Further, it would prevent an executive body of the Commonwealth from improperly interfering with State and Territory judicial decisions. This would include judges of State or Territory courts performing Commonwealth functions in their personal capacity.

2.145 The NACC Bill would also exclude:

•

the Governor-General and any Deputy Governor-General. As discussed at paragraph 2.27, this is appropriate because of the Governor-General's constitutional position, including acting by convention on the advice of Ministers;

•

Royal Commissioners, whose role is time-limited and at arm's length from Government (see paragraph 2.27); and

•

the Inspector and persons assisting, because it would be inappropriate for the NACC to frustrate effective oversight of its performance of its functions and exercise of powers (see paragraph 2.27).

2.146 An essential element of these roles is their independence from government. This exclusion ensures the NACC does not interfere with the proper performance of those roles by those individuals.

Clause 13-Meaning of contracted service provider for a Commonwealth contract

2.147 This clause would define the related concepts of a contracted service provider and a Commonwealth contract. These concepts would be incorporated into the definition of a staff member of a Commonwealth agency (see clause 12).

Commonwealth contract

2.148 A Commonwealth contract is a contract, arrangement, agreement, deed or understanding:

•

to which the Commonwealth or a Commonwealth agency is a party; and

•

under which goods or services are to be, or were to be, provided to the Commonwealth, a Commonwealth agency, or in connection with the activities of the Commonwealth or an agency.

2.149 Clause 7 defines the term contract to include any arrangement, agreement, deed or understanding (see paragraph 1.56).

2.150 The definition of a Commonwealth contract may include procurement arrangements and certain grants, depending on the nature of the relevant arrangement (and regardless of the nomenclature adopted by the parties).

2.151 The test would be clearly satisfied where goods or services are provided to the Commonwealth or the relevant agency, for example, where the Commonwealth has procured the goods or services. If the Commonwealth or agency is not the recipient of the goods or services, the test is whether the contract would involve the provision of goods or services to another party in connection with the activities of the Commonwealth or the agency.

2.152 It would not be necessary that there be an agency relationship between the parties for the definition to apply.

Contracted service provider

2.153 There would be two categories of contracted service providers for the purposes of the NACC Bill.

2.154 The first category would be a person who is a party to the Commonwealth contract and is responsible for the provision of goods or services under or for the Commonwealth contract.

2.155 The second category would be a subcontractor. In this case, the person would be:

•

a party to a contract with a person who is a contracted service provider (as defined in the first category of the definition) for the Commonwealth contract; and

•

responsible for the provision of goods or services for the purposes (whether direct or indirect) of the Commonwealth contract.

2.156 If an individual is a contracted service provider, that individual would be a staff member of the Commonwealth agency responsible for administering the Commonwealth contract. This is intended to include, for example, individual independent contractors engaged in tripartite labour hire arrangements where they are not an employee of the labour hire firm or the Commonwealth agency (sometimes referred to as Odco arrangements).

2.157 Further, any officers or employees of a contracted service provider would be staff members of the agency if they provided goods or services for the purposes (whether direct or indirect) of the contract. This would apply, for example, if a Commonwealth agency entered into a contract with an incorporated labour hire firm for the supply of additional workers to the agency. While the firm's employees would not be contracted service providers to the Commonwealth, they would be treated as staff members of the Commonwealth agency under the NACC Bill because they would be assisting the agency in the performance of its functions, pursuant to the labour hire firm's contract with the agency.

Exceptions

2.158 The government of a State or Territory, the government of a foreign country or part of a foreign country, and a person in a class prescribed by the regulations, would not be a contracted service provider for a Commonwealth contract.

A subcontractor of any of these excluded entities would also not be a contracted service provider. That is, the exceptions mentioned above break the chain between the Commonwealth and the subcontractor, ensuring the subcontractor of a State, Territory or foreign government is not within the NACC's jurisdiction For example, if the Commonwealth enters into a contract with a foreign government for the provision of goods, any subcontractors engaged by the foreign government would not be contracted service providers for the purposes of the NACC Bill.

2.159 However, a person employed by the government of a State or Territory or the government of a foreign country or part of a foreign country, or by a subcontractor of one of those governments, may still engage in corrupt conduct under paragraph 8(1)(a) if it is found they have adversely affected the honest or impartial exercise or performance of a public official's powers or functions. Clause 240 would require the Commissioner and the Inspector to consult the Secretary of the Foreign Affairs Department in certain circumstances-including if they become aware that a corruption issue or public inquiry relates in any way to an official of a foreign country.

Clause 14-Meaning of statutory office holder

2.160 This clause would define a statutory office holder for the purposes of clause 12.

2.161 A statutory office holder would be an individual who holds an office or appointment under a law of the Commonwealth.

2.162 However, offices and appointments under the following laws would be excluded:

•

a general law allowing incorporation as a company or body corporate (for example the office of a company director under the Corporations Act 2001);

•

the Australian Capital Territory (Self Government) Act 1988; and

•

the Northern Territory (Self Government) Act 1978.

2.163 Most offices established under those laws (for example the office of a director of a private company) are not offices of a public nature that would be appropriate to bring within the NACC's jurisdiction.

2.164 Despite the exclusion of offices and appointments under general laws allowing incorporation, the following offices that have a public nature would be statutory office holders:

•

the office of Registrar, or Deputy Registrar, of Aboriginal and Torres Strait Islander Corporations under the Corporations (Aboriginal and Torres Strait Islander) Act 2006; and

•

the office of a member of a committee convened under Part 2 of Schedule 2 to the Corporations Act 2001 (concerning the professional regulation of liquidators).

2.165 The NACC Bill would allow regulations to be made excluding additional offices and appointments from being statutory office holders. Regulations could also be made to allow certain offices and appointments to be statutory office holders despite the office or appointment being made under a general law concerning incorporation. For example, if a new office that is of a public nature is established by the Corporations Act 2001, regulations may be made to ensure the office-holder is within the NACC's jurisdiction.

Division 5-Commonwealth integrity agencies

Clause 15-Meaning of Commonwealth integrity agency

2.166 This clause would define a Commonwealth integrity agency. This definition is relevant to clause 45, which would provide for an additional threshold to the commencement of a corruption investigation where the Commissioner is aware that a Commonwealth integrity agency has previously concluded an investigation into a matter regarding the conduct of a public official.

2.167 The following office holders, together with their staff, would be Commonwealth integrity agencies:

•

the Commonwealth Ombudsman, a Deputy Commonwealth Ombudsman, the Defence Force Ombudsman, the Postal Industry Ombudsman, the Overseas Students Ombudsman, the Private Health Insurance Ombudsman and the VET Student Loans Ombudsman;

•

the Australian Public Service Commissioner;

•

the Merit Protection Commissioner;

•

the Auditor-General;

•

the AFP Commissioner;

•

the Parliamentary Service Commissioner;

•

the Parliamentary Service Merit Protection Commissioner;

•

the Australian Information Commissioner;

•

the CEO of the ACC;

•

the IGIS;

•

the Inspector-General of Taxation;

•

the CEO of the Tertiary Education Quality and Standards Agency;

•

the Inspector-General of Biosecurity;

•

the Inspector-General of Live Animal Exports;

•

the Inspector-General of Water Compliance; and

•

the Inspector-General of the Australian Defence Force.

2.168 Regulations could be made to prescribe additional Commonwealth integrity office holders. A prescribed office holder would be required to have functions that include investigating or inquiring into action taken by public officials.