Anti-corruption insight series: One year of the NACC

It has been one year since the National Anti-Corruption Commission (NACC) opened its doors.

The NACC has had a very busy year. As at last Sunday, 23 June it had received 3,154 referrals – of which it is assessing 516, with 29 under preliminary investigation, conducting 26 corruption investigations and overseeing or monitoring another 21 investigations by other agencies. This is an incredible workload for a new body over only twelve months.

While all of the NACC’s hearings and almost all of its work to date has been in private, we have some limited insight into its priorities.

The past twelve months has been an interesting time for anti-corruption commissions more generally. There have been two important court decisions which have reminded the relevant commission that their powers are not without limits – and in each case the limit imposed by the Court has important consequences for anyone appearing before, or otherwise involved in, an investigation by one of these bodies. We have no doubt the NACC is keeping a close eye on these developments, and learning from some hard lessons being learnt by the corruption commissions which came before it.

The NACC’s first year – what we know

In its first year the NACC has made key announcements including:

• the arrest of a former public service employee by the Australian Federal Police following an investigation by the NACC. The individual was charged with allegedly soliciting a bribe during a procurement process. This was the first charge in an investigation initiated by the NACC and followed convictions and sentencing in three other matters that the NACC inherited from its predecessor body.^[1]
• that it will not commence an investigation concerning six public officials referred to it by the Robodebt Royal Commission (RRC). The NACC’s reasoning was that an investigation would not add value in the public interest, with its considerations including that:
  • it was unlikely the NACC would obtain significant new evidence that had not already been explored by the RRC;
  • there was a risk of inconsistent outcomes and oppression involved in subjecting individuals to repeat investigations; and
  • the NACC cannot grant a remedy or impose a sanction (unlike the Australian Public Service Commission) and cannot make any recommendation that could not have been made by the RRC.

It has since been reported that the Inspector of the NACC, tasked with overseeing the NACC’s operations and conduct, will now undertake its own inquiry into the NACC’s decision not to investigate these RRC referrals.

More generally, the Commissioner has indicated that addressing integrity issues in the Commonwealth public sector, particularly in relation to ethical decision making, is an ongoing priority for the NACC. The Commissioner has done a lot of speaking engagements over the past year, demonstrating a strong commitment to the NACC’s education and prevention functions. As at 23 February 2024, the NACC had made 71 presentations to stakeholders across the Commonwealth public sector on enhancing integrity.^[2]

A snapshot of the past twelve months for anti-corruption commissions – learning their limits

While there are significant differences among Australian jurisdictions in how corruption is defined and investigated, this year has seen the Courts consider important issues which are common to all these bodies:

1. whether, and how much, a corruption commission can disclose their work, and
2. the level of procedural fairness required where someone is going to be subject to an adverse finding.

These are two of the most front of mind questions for anyone appearing before this type of body or otherwise involved in an investigation. The Courts’ decisions remind the relevant commissions of their limits, and these findings should have a flow on effect to all other anti-corruption commissions, including the NACC, when considering the scope of their powers and conducting an investigation.

Whether, and how much, a corruption commission can disclose their work?

Everyone and anyone appearing before an anti-corruption commission, or otherwise caught up in an investigation, is worried about what information is going to become public.

Under the NACC Act, public hearings (and public reports) are the exception, not the norm. The NACC will only hold a public hearing if the Commissioner is satisfied there are ‘exceptional circumstances’ which justify holding the hearing in public, and it is in the public interest to do so.^[3] Similarly, the NACC will only publish an investigation report if it has been given to the Minister or Prime Minister and the Commissioner is satisfied it is in the public interest to do so.^[4] Other than some limited situations in which the Commissioner may make public statements about a corruption issue, all of the NACC’s work is conducted in private. To date, the NACC has not held a public hearing nor has it published an investigation report.

This issue has been recently examined by the High Court in Crime and Corruption Commission v Carne.^[5] The Queensland Crime and Corruption Commission (CCC) had adopted a broad practice of publishing reports of its investigations. This happened even where the CCC had decided not to pursue a criminal prosecution and there was no finding of any corrupt conduct. The Court found that CCC did not have authority to publish a corruption investigation report under the relevant provisions of the Crime and Corruption Act 2001 (Cth) in these circumstances. As a result, CCC had to report that it had wrongly published 32 previous reports and 256 media releases.^[6]

That decision led the Queensland Government to undertake an independent review into the issue, recognising that legislation was needed to give the CCC public reporting and statement powers in relation to corruption investigations.

The review report was published a couple of months ago (on 20 May 2024), and recommended legislative change to give the CCC particular reporting power, but subject to the overarching requirement that public reports and public statements should only ever be made in when they are in the public interest. In that way, the recommendations bring the CCC’s reporting powers generally in line with the NACC’s reporting powers. The review report recommended factors to be considered in assessing the public interest, including the effect on human rights of a person who may be effected, and the need for transparency and accountability in the public sector.^[7]

While all anti-corruption commissions must feel the pressure to let the public know what they are spending their taxpayer dollars on, this case and the case discussed below are a reminder that making reports public can only occur where this is permitted under their specific legislation. 

The level of procedural fairness required where someone is going to be subject to an adverse finding

Where a person involved in an integrity investigation is the subject of an adverse finding, there is a question about whether, and how, procedural fairness will be provided to them. Procedural fairness includes the concept that someone has the right to know and comment on any adverse information that is credible, relevant and significant. In the context of anti-corruption and other commissions where the information may be confidential and the timeframes tight, there have been disputes about whether procedural fairness has been afforded.

The NACC has had the benefit of learning from the commissions which have come before it and has built in a procedural fairness process into its Act. That process requires the NACC to give a person a statement setting out any ‘critical’ (expressly or impliedly) opinion, finding or recommendation that is proposed to be included in a report, and allow them a reasonable opportunity to respond.

Importantly, the High Court has considered the breadth and content of the procedural fairness owed to someone under investigation by an integrity commission and where there is adverse material. In a decision handed down earlier this year,^[8] the court found that the statutory obligation of Victorian Independent Broad-based Anti-corruption Commission (IBAC) to provide adverse material to a person under investigation extended beyond the adverse comment or opinion, but also included the evidentiary material on which it is based. This was a material shift to the previous practice.

The outcome of this case has practical significance because the High Court required an undertaking from IBAC not to publish the proposed comment or opinion about the relevant person because the evidentiary material on which it was based (and therefore procedural fairness) had not been provided to them. This case will almost certainly influence the NACC, and other anti-corruption commissions, to take a careful look at exactly what their legislation requires for procedural fairness and to make any necessary changes.

The willingness of the High Court to exercise its powers to enforce procedural fairness should be of some comfort to anyone involved in an integrity investigation, and who may be subject to an adverse finding.

There is so much happening in the anti-corruption space! Of course, the Commonwealth Fraud and Corruption Framework comes into effect today, and is intended to complement the NACC’s prevention and investigation functions.^[9]

Importantly, the new framework includes an amendment to section 10 of the PGPA Rule 2014 which requires Commonwealth entities to conduct fraud and corruption risk assessments regularly. Previously, that provision only applied to fraud, whereas it now also applies to corruption.

Keen to read more? See our previous insight, in which we outlined what to expect if you have witnessed potentially serious or systemic corrupt conduct and want to make a referral, or if you are otherwise involved with a NACC investigation.