Rex Patrick (SA, Nick Xenophon Team) Share this | Hansard source

I rise to speak about aspects of Australia's national security, including parliamentary oversight of our intelligence agencies—an issue I briefly referred to in my first speech in the chamber yesterday. Uncertainty, risk, and even danger characterise Australia's emerging international circumstances. Prime Minister Turnbull used these words in his introduction to the government's recent foreign policy white paper. We are living in a time of rapid strategic change, as North Korea's latest ballistic missile test demonstrates. We are witnessing major shifts in regional power relationships and, arguably, the development of a more competitive and less predictable international environment. This is particularly the case in the Asia-Pacific region where, as the government's white paper observes:

… China's power and influence are growing to match, and in some cases exceed, that of the United States.

The potential risks of Australia's international positions have also been highlighted in an important paper by two distinguished strategists, Professor Paul Dibb and Dr Richard Brabin-Smith of the Australian National University's Strategic and Defence Studies Centre. Both former deputy secretaries of the Defence department, Dibb and Brabin-Smith observe:

Australia's strategic outlook is deteriorating and, for the first time since World War II, we face an increased prospect of threat from a major power. This means that a major change in Australia's approach to the management of strategic risk is needed. This means that a major change in Australia’s approach to the management of strategic risk is needed.

… Over recent decades, judgements in this area have relied heavily on the conclusion that the capabilities required for a serious assault on Australia simply didn't exist in our region. In contrast, in the years ahead, the level of capability able to be brought to bear against Australia will increase, so judgements relating to contingencies and the associated warning time will need to rely less on evidence of capability and more on assessments of motive and intent.

Dibb and Brabin-Smith rightly make the point that we should not see China as inevitably hostile to Australia, but they identify the rapid growth of China's economic and political influence, as well as Beijing's increasingly advanced military capabilities, as key strategic developments in our region.

While America's power projection capabilities and wider influence are likely to remain significant in the Western Pacific, we now face a much more complex set of security relationships in which China's strategic wake is likely to only grow. Although the US alliance will remain important to us, we may no longer be able to rely on our great and powerful friend to guarantee our security in the way that we have over the past seven decades. Building Australia's own defence capability will be a much more urgent and pressing task.

With that said, how do we mitigate the risks that we may face? Clearly a key factor is intelligence, which enables us to understand not only immediate threats but also the long-term capabilities and intentions of other powers. Intelligence is a vital foundation for diplomacy, strategy and national security. Just over a year ago, the Prime Minister announced an independent review of Australia's intelligence services. That review, completed last June, was conducted by former Foreign Affairs and Trade secretary Michael L'Estrange, and Stephen Merchant, who formerly held senior positions within the Australian intelligence community. With an annual budget now approaching $2 billion and about 7,000 staff spread across 10 intelligence and security agencies, a wide-ranging examination of Australia's intelligence community was certainly required in Australia's changing strategic circumstances. Although L'Estrange and Merchant found that many features of our intelligence community remained appropriate, especially the dividing line between foreign and security intelligence and intelligence collection and assessment, they concluded that there is significant scope for improving intelligence coordination.

The review's major recommendation is for the establishment of a new office of national intelligence to be located in the Prime Minister's office. This office, as proposed by L'Estrange and Merchant, would be headed by a director-general who would be the Prime Minister's principal adviser on matters relating to the national intelligence community. The director-general would not control the specific activities of agencies but should be able to direct coordination to ensure there are integrated strategies across the intelligence community. The Office of National Intelligence would subsume the Office of National Assessments and undertake national intelligence assessment functions while ensuring contestability of analysis and engagement with external experts.

There has been little debate about this important proposal. It would bring Australia's intelligence coordination arrangements broadly in line with our Five Eyes partners—Canada, New Zealand, the United Kingdom and the United States. However, the rationale for the new office has not been fully developed. Under existing arrangements, the Director-General of the Office of National Assessments already has an intelligence community coordination role. Section 5 of the ONA Act provides that one of the functions of the agency is:

… to coordinate the foreign intelligence activities that Australia engages in, including in relation to setting Australia's foreign intelligence requirements based on Australia's foreign intelligence priorities …

Perhaps one of the purposes of the proposed new office is to bring about a tighter integration of foreign intelligence and domestic security, with the Australian Security Intelligence Organisation and the counterterrorism functions of the Australian Federal Police being subject to coordination from the new Director of National Intelligence.

There may well be a case for this, though how this will relate to the structure and responsibility of the new Home Affairs portfolio is not yet clear. There are significant issues to be worked through, including the relationship between the proposed new office and the individual ministers responsible for national security agencies. It would be unfortunate if the effect of reforms to enhance coordination was, in fact, to duplicate or confuse lines of responsibility. We need to look closely at any legislation that may be proposed by the government and rigorously test the arguments for change.

The other aspect of the intelligence review I wish to focus on tonight is that of oversight by the Inspector-General of Intelligence and Security, the IGIS, and the Parliamentary Joint Committee on Intelligence and Security, the PJCIS. The review of the intelligence community rightly recognised the importance of oversight mechanisms in ensuring that our agencies operate according to the law and are subject to ministerial direction and control. This is vital to ensure public confidence. L'Estrange and Merchant put this well in observing:

It is critical in a democracy that intelligence agencies are subject to strong oversight and accountability mechanisms. Indeed, oversight of intelligence services is a central tenet of the 'state of trust' between intelligence services and the community of which they are part. A critical element of this 'state of trust' is the understanding that agencies provide intelligence which contributes to safeguarding national interests and the lives of citizens and that, in doing so, those agencies act with propriety, legality and proportionality, are responsive to Ministerial direction and control, and are accountable for their activities.

Although well respected, the IGIS has long been under-resourced, while the intelligence community it oversees has grown like topsy. L'Estrange and Merchant have made a sensible recommendation in proposing that the role of the IGIS be extended to include scrutiny of the intelligence elements of the Australian Federal Police, the Department of Immigration and Border Protection, the Australian Transaction Reports and Analysis Centre and the Australian Criminal Intelligence Commission. Significantly, the review also recommended the staffing of the office be increased from 17 to around 50. This would go some way to adequately resourcing the IGIS. The government should not delay in committing resources to give effect to that recommendation.

The effectiveness of the PJCIS has been limited by its statutory exclusion from examining the operational activities of intelligence agencies. The very strong bipartisan consensus between the coalition and Labor within the PJCIS has also inhibited robust debate about intelligence and national security issues. Although the PJCIS has done much good work and developed expertise in reviewing proposed legislation, there have been times when its members have appeared more committed to advocacy for our intelligence and security agencies than scrutiny of their activities. Yet rigorous scrutiny is essential to ensure that these agencies most effectively support our national interests.

The intelligence review has recommended an expansion of the remit of the PJCIS to cover the agencies I have just mentioned. However, the question of resourcing needs to be considered. If the PJCIS is to take on further responsibility, then the joint committee's secretariat will need to be bolstered to ensure its independence from the agencies the committee is tasked to review. Given the need for staff to hold the highest levels of security clearance, personnel may be drawn from or have backgrounds in the intelligence community, but that needs to be carefully managed to ensure no conflicts of interests. In one respect, the intelligence review's recommendations fall significantly short of what is required to put the intelligence community's relationship with its ultimate masters, the democratically elected members of this parliament, on a sound footing. In this, the review appears to reflect more the bureaucratic and intelligence background of its authors than the principles that should properly govern the activities of what are increasingly well-resourced and influential but highly secret government agencies.

The review discusses the role of the PJCIS at some length and acknowledges the joint committee as a vitally important accountability mechanism for the intelligence agencies. The review also discusses the proposals set out in the Parliamentary Joint Committee on Intelligence and Security Amendment Bill 2015, introduced by the Leader of the Opposition in the Senate, Senator Wong, in August 2015. In her second-reading speech, Senator Wong rightly observed that parliamentarians cannot outsource their duty to ensure the security of our nation and the people who entrust us with the responsibility of governing. The PJCIS amendment bill proposed a range of amendments covering the membership, powers and functions of the PJCIS—most importantly, to enable the PJCIS, by resolution, to conduct inquiries into any matter in relation to Australian intelligence community agencies; that is, potentially into the operational activities of those agencies.

This would represent a major advance in parliamentary oversight of the intelligence community. Consequently, it went way too far for L'Estrange and Merchant. As former national security bureaucrats, they had rather more sympathy with the longstanding claim of the intelligence community that the PJCIS scrutiny of operational matters is undesirable and would in some way cut across lines of ministerial responsibility. The intelligence review commented as follows:

… we consider expanding the role of the PJCIS to include own-motion inquiry into the operational activities of intelligence agencies is not required to ensure agencies are operating effectively, legally and with propriety.

…   …   …

we consider the responsible Ministers are best placed to judge the effectiveness of the operations of the agencies and to be accountable for them to the Parliament and the broader Australian community. Ministers have the information, insights and powers necessary to perform this role and they have the ability to engage with the PJCIS by referring matters to it.

Instead of the PJCIS being able to conduct its own inquiries into agency operations, the intelligence review favoured strengthening the connection between the PJCIS and the IGIS by empowering the IGIS to conduct an inquiry into the legality and propriety of particular operational intelligence activities and to provide a report to the joint committee, the Prime Minister and the responsible minister.

This recommendation falls well short of what is required. It wrongly presumes that it is appropriate for the parliament to outsource its scrutiny function to what is an important and independent agency, nonetheless a creature of the executive government. The review also mistakenly presumes that the PJCIS would only be concerned with questions of legality and propriety. If our intelligence community is to be subject to effective parliamentary scrutiny like all other parts of government, that scrutiny must extend to questions of policy and effectiveness.

The activities of our intelligence agencies are not just operational; they can involve matters of high policy, with both major domestic and major international implications. For example, it is a reasonable question to ask whether the activities of the Australian secret intelligence services are always consistent with our diplomatic objectives and interests. ASIS's pursuit of covert intelligence could, for example, potentially involve significant risk to diplomatic relations with a foreign power. Similarly, ASIO's liaison relationship with foreign agencies, some of which may be subject to allegations of human rights abuse—perhaps the Iraqi National Intelligence Service, to take a hypothetical example—do not just involve questions of legality and compliance with ministerial direction; they also involve political and policy questions. Such questions are properly matters for the responsible minister, the Prime Minister and the National Security Committee of Cabinet, but these matters should also rightly be matters for review by members of the PJCIS, entrusted, in conditions of tight security, with overseeing those agencies.

In the United States, parliamentary committees have the power to reach far into operational matters. Those inquiries are accepted by the US intelligence community as necessary and appropriate. No doubt there are details of intelligence operations, especially human intelligence operations involving sensitive and vulnerable sources, that are best held by the smallest number of people with an absolute need to know. There may well be a case for a ministerial veto on PJCIS access to some specific operational information.

In Canada, the new National Security and Intelligence Committee of the Parliamentarians is able to review:

… any activity carried out by a department that relates to national security or intelligence, unless that activity is an ongoing operation and the appropriate Minister determines that the review would be injurious to national security …

…   …   …

If the appropriate Minister determines that a review would be injurious to national security, he or she must inform the Committee of his or her determination and the reasons for it.

…   …   …

If the appropriate Minister determines that the review would no longer be injurious to national security or if the appropriate Minister is informed that the activity is no longer ongoing, he or she must inform the Committee that the review may be conducted.

This could be a framework for the PJCIS oversight of intelligence operations here, with the added provision that any ministerial veto should be referred to the IGIS for review and a report to both the PJCIS and the Prime Minister. If democratically elected MPs and senators cannot be trusted to deal directly with these questions then something is wrong with the relationship between the intelligence community and the parliament it is ultimately meant to serve.

I opened this speech by discussing Australia's changing strategic environment. An effective, well-resourced intelligence and security agency will be absolutely vital to successfully dealing with the challenges that we face. Australia's intelligence community will be larger and even more important in the years and decades ahead, and the parliament's responsibility will be all the greater to ensure that those agencies are operating with maximum effectiveness, in accordance with sound policy, with propriety and in accordance with the law. The parliament cannot shirk that responsibility, and that must of necessity involve direct scrutiny of agency operations.

The government will in due course introduce legislation to give effect to its response to the intelligence review's recommendations. The government will be seeking the support of the opposition and crossbenchers. Any such legislation should be subject to rigorous scrutiny not only by the PJCIS but also by the relevant Senate legislation committees—those on foreign affairs, defence and trade and legal and constitutional affairs. NXT will consider that legislation on its merits, and we will push hard for operational oversight of the intelligence services by the parliament because the time for such scrutiny is long overdue. However, I also propose to introduce a private senator's bill to that effect. If we are serious about our role in ensuring effective scrutiny of a vital function of government, the Senate will need to take up that challenge.

Senate adjourned at 21:44