Anti-Corruption Commissions: Lessons in Transparency and Accountability for Australia and India

The perception of corruption exists in both Australia and India with perhaps an increased social awareness of its existence but with different experiences responding to corruption²...

For many years, the Australian Government (of the left and right of politics) has refused to countenance a Commonwealth Anti-Corruption Commission (ACC). Instead, the Commonwealth had a patchwork of largely unknown organizations that reviewed the conduct of a limited number of Commonwealth agencies. Accountability within the Commonwealth public service was the provenance of the Australian Public Service Commission. Importantly, Commonwealth politicians and their staff resolutely refused to be subjected to any form of independent accountability.

It was as if the mantra was "there is no corruption in Canberra (the capital)" or if there was, it was being managed perfectly well. The public response to this and increasing pressure in the media and from leading commentators was highly sceptical, particularly as the Australian States all have robust ACCs with varying degrees of public activity (the most pronounced being the Independent Commission Against Corruption (ICAC) in New South Wales.

Something had to give and it did. The Commonwealth Government became a minority government, relying for its survival on independent parliamentarians who increasingly called for an ACC, supported by a large number of retired judges, anti-corruption commissioners (who had sat on State ACCs) and the media. Once the Commonwealth opposition party (Labor) had thrown its weight behind a Commonwealth ACC, the writing was on the wall.

The move towards change accelerated with the findings of the Financial Services Royal Commission and the Interim Report released in September 2018 by that Commission outlining the egregious if not allegedly illegal conduct, undertaken over a number of years, by Australia's leading banks, finance, insurance and superannuation companies³. This was reinforced by the Commission's Final Report released on 4 February 2019. The Commission found that business conduct was motivated by greed and a complete disregard of the law or any sense of ethical standards. Perhaps more acutely, there was a comprehensive failure to manage non-financial risk and to treat customers and consumers as a problem to be managed or ignored.

The role of an ACC is important in any country, whether, Australia, India or any other jurisdiction. The perception of corruption exists in both Australia and India with perhaps an increased social awareness of its existence but with different experiences responding to corruption⁴. Those who exercise power and influence and who spend public money need to be held accountable by an independent body. It seems India is not unlike Australia, having various bodies such as the Serious Fraud Investigation Office, the Central Vigilance Commission and the Central Bureau of Investigation with no one central agency or commission holding federal politicians and public servants strictly to account for their conduct. So what is the state of play for Indian politicians? In early 2017, The Economist painted the following picture on the state of corruption in Indian politics⁵:

ALL politicians are rooks. At least, that is what a lot of people think in a lot of countries. One assumes it is a reproach. But not in India. Indian politicians who have been charged with or convicted of serious misdeeds are three times as likely to win parliamentary elections as those who have not. In "When Crime Pays: Money and Muscle in Indian Politics" Milan Vaishnav of the Carnegie Endowment for International Peace meticulously tracks the remarkable political success of India's accused murderers, blackmailers, thieves and kidnappers. Having been a symptom of India's dysfunctional politics, the felons are metastasizing into its cause.

Sadly, this is not a book about some small, shady corner of Indian politics: 34% of the members of parliament (MPs) in the Lok Sabha (lower house) have criminal charges filed against them; and the figure is rising (see chart below). Some of the raps are peccadillos, such as rioting or unlawful assembly - par for the course in India's raucous local politics. But over a fifth of MPs are in the dock for serious crimes, often facing reams of charges for anything from theft to intimidation and worse. (Because the Indian judicial system has a backlog of 31m cases, even serious crimes can take a decade or more to try, so few politicians have been convicted.) One can walk just about the whole way from Mumbai to Kolkata without stepping foot outside a constituency whose MP isn't facing a charge.

The public is increasingly disenchanted with what is often described as the "political elite", those in politics, business and the community who make decisions affecting the public. They often appear to live and operate in a bubble, while "ordinary people" simply go about their daily activities in a manner which means they often, singly or collectively, have very little ability to hold those in power accountable. The public, whether in India, often perceived as having a serious corruption problem, or Australia, seen as less corrupt, want those exercising power and influence to be held accountable for their conduct. While each of the Indian and Australian Governments are tried to push through reforms over recent years, they seem to stall on the implementation and the political willingness to enact reforms appears to get lost in the noise of political survival.

A Proposed Commonwealth Integrity Commission

In answer to inevitable political pressure, but without any great commitment or belief in its value, on 13 December 2018, the Australian Government published a Consultation Paper to establish a Commonwealth Integrity Commission (CIC)⁶.

The proposed CIC will consist of:

• a 'law enforcement integrity division' incorporating the existing structure, jurisdiction and powers of the Australian Commission for Law Enforcement Integrity (ACLEI) supervising a limited number of Commonwealth agencies which exercise significant coercive powers; and

• a new 'public sector integrity division' with jurisdiction over other public service agencies, departments and Commonwealth companies and corporations together with parliamentarians and their staff; and
• the structure of the CIC is be administered by a Commissioner with two divisional Deputy Commissioners, see the table below, with a proposed operating budget of AU$30 million per year with additional funding for establishment costs in the first year.

The key features of what is proposed by the Government are set out below:

• The law enforcement division can:

• Compel production of documents;

• Exercise questioning and inspection powers and enter/search premises and seize evidence;

• Hold hearings (public or private);

• Make formal recommendations; and

• Arrest individuals.

• The public sector integrity division can:

• Compel production of documents;

• Exercise questioning and inspection powers;

• Make formal recommendations; but

• Cannot arrest individuals, cannot enter or search

premises, cannot seize evidence and cannot hold public hearings.

• The threshold for an investigation will be:

• The law enforcement division: Applying the threshold under the ACLEI Act, corrupt conduct that

involves abuse of office, perversion of the course of justice or corruption of any other kind having regard to the duties and powers of the person under suspicion;

• The public sector integrity division: Where the Commissioner has a reasonable suspicion that the conduct in question constitutes a criminal offense (which will exclude misconduct or non-compliance under codes of conduct).

• A range of corruption offenses will be consolidated into Chapter 7 of the Criminal Code Act 1995 (Cth) (Criminal Code) together with the following new offenses (yet to be published in draft legislation):

• The aggravated offense of "repeated public sector corruption", where a person commits three or more offenses (the underlying offenses) in the new public sector division of the Criminal Code;

• The aggravated offense of "corrupt conduct by a Senior Official", applying to a member of the Senior Executive Service or equivalent position; and

• The offense of "failure to report public sector corruption", to apply to a senior public service official who has information that would lead a reasonable person to believe that an employee or agent of an agency has engaged in corrupt conduct being an offense under the new public sector division of the Criminal Code and the person did not take steps to report the conduct to an appropriate law enforcement authority.

• The CIC will be able to examine entities or individuals in receipt of Commonwealth funds who are suspected of engaging in criminal conduct;

• The referrals to the CIC will operate as follows:

• The law enforcement division: Referrals can be made by an agency head, another integrity agency, the Attorney General or a member of the public;

• The public sector integrity division: There will be a mandatory referral obligation on heads of departments, agencies and Commonwealth companies and corporations, and referrals from another integrity agency, the AFP or on the public sector integrity Deputy Commissioner's own motion, but not by members of the public (who must refer complaints to existing agencies) and the division will not take complaints from the public concerning Ministers, Members of Parliament or their staff.

• The main purpose of the CIC will be to investigate allegations of corruption, as defined, (on referral) and present briefs of evidence to the AFP (for further action) or to the CDPP for consideration for prosecution. There will not be any findings of corruption at large (as with current State-based ICAC bodies); rather, referrals to independent prosecutors for a court to determine criminal liability.

Public Response to the Proposed CIC

A number of senior retired judges with considerable experience in investigating public sector corruption have been very critical of the proposed CIC model. David Ipp QC, former NSW ICAC Commissioner and appellate Judge, was reported in the media as saying the CIC was the "kind of integrity commission that you would have when you don't want to have an integrity commission…it creates a wall behind which corrupt public officials can hide…(and was and is)…like a colander – it would be really good to make rice in it, it's got so many holes." The regime appears inconsistent with protecting whistleblowers, forcing them to report agency misconduct to the agency itself or some other body without the protection of any independent body. Geoffrey Watson SC, a leading criminal Senior Counsel involved in some of the pioneering work by the NSW ICAC (and subjected to significant litigation by the Obeid family attacking his credibility) is equally scathing, saying that the proposed CIC has "fundamental flaws" some of which were "so obvious as to be laughable". Other commentators who have been critical of the NSW ICAC model with extensive public hearings, support the limited role of public hearings. However, there is considerable criticism for having one set of accountability rules for public officials (the law enforcement public officials) and another less transparent set of accountability rules for parliamentarians and their staff. There is no justification for treating them differently and it raises legitimate concerns as to why politicians want to be treated differently.

The CIC may of course not see the light of day as Parliament is scheduled to sit for less than 2 weeks in the first 5 months of 2019, due to the Government being in a minority, a looming national election by May 2019, various independent politicians and the opposition Labor Party suggesting the proposed CIC is too weak and in need of strengthening and the Government's proposed model looking like an ICAC when you do not really want a Commonwealth ICAC (the position the Government and the Opposition has adopted for years). What they all should appreciate is what the Financial Services Royal Commission has shown us – the public is demanding increasing transparency and accountability from those in power and if politicians deliberately exclude themselves from this transparency and accountability, the integrity of the proposed integrity commission may well be doomed from the outset. It is hoped some reforms occur to ensure, as a minimum, the commission is established that treats politicians and their staff no differently to law enforcement agencies, the public can lodge complaints directly with the CIC and should it be warranted (on the reformed NSW ICAC model), public hearings can occur.

Lessons for Australia and India

There are a number of important lessons for both Australia and India in considering the implementation of a robust, independent ICAC entity:
• The public increasingly expects those exercising power and influence, in politics and/or business, to be held accountable for their conduct;
• Politicians and their staff should be treated no differently to anyone else in the community, perhaps held to a higher standard as they have ultimate responsibility for managing public resources;
• Any investigation of corrupt conduct must be undertaken by a robust, well-funded, well-resourced independent agency; and

• Politicians who ignore the strong social demands for accountability and transparency will ultimately lose credibility and, at the ballot box, power and influence.

Politicians and business leaders talk a lot about ethics, morality and doing the "right thing" by the community. However, history has shown us that when pressed, they often are reluctant to practice what they preach. If these powerful social demands for accountability and transparency are not heeded, countries like Australia and India risk disenfranchising a large number of people, turning them away from the political process, to the detriment of the democratic process that should be flourishing in these countries, rich with their common Commonwealth heritage of the common law, the rule of law and ethical responsibility. Time will tell whether politicians heed these calls.

Disclaimer – The views expressed in this article are the personal views of the author and are purely informative in nature.