Top issues referred to the new National Anti-Corruption Commission

The National Anti-Corruption Commission (NACC) officially opened its doors on 1 July and is set to have its hands full with 44 referrals having already been made.

Headed up by the former NSW Court of Appeal Judge, Paul Brereton AM RFD SC, the NACC will investigate serious or systemic instances of corrupt conduct by Commonwealth officials. In a recent statement, Mr Brereton expressed a desire for the Commission to attract a reputation of “being fearless but fair, independent, and impartial.” 

Commissioner Brereton is joined by three deputies:

• Dr Ben Gauntlett, former Disability Discrimination Commissioner at the Australian Human Rights Commission
• Nicole Rose PSM, former CEO of AUSTRAC
• Jaala Hinchliffe, former Integrity Commissioner and agency head for the Australian Commission for Law Enforcement Integrity.

NACC’s Chief Executive Officer is Philip Reed, the former CEO of the NSW ICAC.

Issues that have been referred

Any person may, anonymously or otherwise, make a voluntary referral to the NACC regarding corrupt conduct. The Commissioner can decide whether or not to commence an investigation, refer the corruption issue to a Commonwealth agency to which it relates for investigation or determine not to take any action. While anonymous referrals can be made, any subsequent statements made to the NACC as part of its investigation cannot be anonymous.

This broad scope to make referrals has meant the following matters have already been referred to the NACC for possible investigation:

• PwC’s recent tax leaks scandal involving their government consulting arm
• referrals resulting from the Robodebt Royal Commission after Commissioner Catherine Holmes requested a one-week extension for the inquiry’s reporting date to enable her to make a direct referral to the NAAC
• Stuart Robert and his alleged involvement in the Synergy 360 misappropriation of taxpayer funds
• Scott Morrison and the secret ministries he swore himself into
• the Defence Department’s Hunter-class frigate program
• the former Morrison government and the funding of the Community Health and Hospitals Program
• former cabinet minister, Bridget McKenzie, and her handling of the Community Sport Infrastructure Grant Program.

Beyond voluntary referrals, the NACC Act places an obligation on agency heads and agency public interest disclosure officers to make mandatory referrals of corruption issues they become aware of.  This mandatory requirement commences on 28 July 2023 for any relevant conduct they become aware of on or from 1 July 2023. Heads of Commonwealth agencies are also obliged to make a referral to the NACC if they become aware of a corruption issue concerning the conduct of a person who was or is a member of their staff which they suspect could be involved in serious or systemic corrupt conduct.

What matters will be the subject of investigation?

The NACC will be able to hold hearings for the purpose of its investigation in any manner they deem necessary. Where the NACC decides to conduct a hearing, it will generally be held in private unless the Commission is satisfied that it is in the public interest to do so or there are exceptional circumstances which justify a public hearing. The public may therefore not become aware of which conduct the NACC is actively investigating.  

The NACC has the power to investigate a broad scope of conduct by any person (whether or not a public official), so long as the conduct under investigation adversely affects, or could adversely affect, a public official carrying out their role in a dishonest or biased manner. Under the powers of the NACC, ‘public official’ is given a broad interpretation to include the following categories of people:

• ministers, senators and members of the House of Representatives, and their staff
• staff members of Commonwealth agencies and Commonwealth companies
• where a Commonwealth agency is responsible for administering a Commonwealth contract, individuals who are either:
  • the contracted service provider for a Commonwealth contract; or
  • both an officer or employee of the contracted service provider for the Commonwealth contract and someone who provides goods or services for the purposes (whether direct or indirect) of the contract.
• staff members of the NACC
• people acting for, on behalf of, or as a deputy or delegate of, any of the above persons or bodies.

Despite this broad definition of ‘public official’, there are doubts around whether the NACC can investigate PwC and its partners and employees as it is unclear whether the PwC partner who obtained the information fits into one of the above categories. The conduct of the Commonwealth entities in response to the knowledge of the allegedly corrupt behaviour may fall within the scope of the NACC’s power.

What does it mean for you?

As we reported in October last year, the NACC will have a “full range of investigative powers” and the power to investigate both past and presently occurring corrupt conduct. This means there will be increased accountability for businesses and their officers dealing with government entities.

Undoubtedly, the NACC will significantly impact how government bodies engage with private sector companies going forward. To that end, you should:

• consider identifying areas of risk in the business, including for example if you contract with government officials and bolstering controls in place
• review policies and procedures, particularly those related to any investigations undertaken internally in anticipation of potential notices from the NACC that may require the production of documents (given that the Commission has the power to require the production of privileged documents).

Holding Redlich regularly acts for clients who are subject to investigation by anti-corruption agencies, including IBAC, ICAC and CCC. We are well-placed to assist your organisation in responding to any investigation that the NACC may institute in time.

If you require any assistance or have any questions about the NACC, please get in touch with a member of our team below.

Disclaimer
The information in this article is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, we do not guarantee that the information in this article is accurate at the date it is received or that it will continue to be accurate in the future.

Published by:

Howard Rapke

Gemma Hannah

Alex Stiliadis

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