Intelligence Services Amendment (Establishment of the Australian Signals Directorate) Bill 2018 - Commentary on Ministerial Responses [2018] AUSStaCSBSD 139 (9 May 2018)

• Intelligence Services Amendment (Establishment of the Australian Signals Directorate) Bill 2018
• Broad delegation of administrative powers60
• Privacy62

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Intelligence Services Amendment (Establishment of the Australian Signals Directorate) Bill 2018

Purpose	This bill seeks to amend the Intelligence Services Act 2001 to establish the Australian Signals Directorate as an independent statutory agency
Portfolio	Defence
Introduced	House of Representatives on 15 February 2018
Bill status	The bill received Royal Assent on 11 April 2018

2.100 The committee dealt with this bill in Scrutiny Digest No. 3 of 2018. The minister responded to the committee's comments in a letter dated 13 April 2018. Set out below are extracts from the committee's initial scrutiny of the bill and the minister's response followed by the committee's comments on the response. A copy of the letter is available on the committee's website.^[59]

Broad delegation of administrative powers^[60]

2.101 Proposed subsection 27N(1) seeks to allow the Director-General of the Australian Signals Directorate (ASD)^[61] to delegate all or any of his or her functions or powers under proposed Part 5A to any staff member at the Executive Level 1 (EL1) level or above. Proposed Part 5A sets out the Director-General's powers in relation to employment and termination, engagement of consultants and service providers, secondments, the application of the principles of the Public Service Act 1999 to ASD employees, voluntary movement of ASD staff to the Australian Public Service and staff grievance procedures.

2.102 The committee has consistently drawn attention to legislation that allows the delegation of administrative powers to a relatively large class of persons, with little or no specificity as to their qualifications or attributes. Generally, the committee prefers to see a limit set either on the scope of powers that might be delegated, or on the categories of people to whom those powers might be delegated. The committee's preference is that delegates be confined to the holders of nominated offices or to members of the Senior Executive Service. Where broad delegations are provided for, the committee considers that an explanation of why these are considered necessary should be included in the explanatory memorandum.

2.103 In this case, the explanatory materials provide no information about why these powers are proposed to be delegated to ASD staff members holding positions at the EL1 level or higher.

2.104 The committee requests the minister's advice as to why it is necessary to allow the powers and functions of the Director-General under proposed Part 5A to be delegated to Executive Level 1 employees or above, rather than to members of the Senior Executive Service.

Minister's response

2.105 The minister advised:

Accountable Officers routinely have delegation powers to assist them in the effective and efficient running of their organisations. This is a sensible and prudent business practice. I note the Committee's stated preference that delegation powers be normally limited to Senior Executive Service officers.
Importantly, the delegation power only relates to Part 5A of the Act which sets out employment arrangements for staff; it does not extend to operational matters which appropriately remain with the Director-General of the Australian Signals Directorate.
The Australian Signals Directorate operates a range of sophisticated technical capabilities and systems. Similarly, there are a number of secondments to partner agencies, as well as other bodies and organisations, that need to exercise delegations, and these secondment arrangements occur at a range of employment categories and levels. In this context, the expertise regarding the use and engagement of staff for how these capabilities and systems can be best applied and used to meet the Government's requirements at times rests with officers outside of the Senior Executive Service.
The proposed delegation power for the Director-General of the Australian Signals Directorate, which is limited to Part 5A, is intended to be used sparingly, and only after careful consideration has been applied as to what the activity is and the outcomes required. Strict boundaries will be set on the extent and limitations of the delegated powers or functions, along with the requirements for how the officer is to exercise those delegations.
In preparing this provision within the Act, careful consideration was taken as to the appropriate limit of the delegation, such as restricting it to officers at the Executive Level 1 classification or higher. I would further note that Executive Level 1 officers - while not fulfilling the types of leadership roles undertaken by Senior Executive Services officers - do fill senior positions and have significant responsibilities.
While the Director-Generals of the Australian Security Intelligence Organisation and the Australian Secret Intelligence Service both have similar delegation powers, these are without restriction as to the level of employee able to receive the delegation.
While the proposed provision seeks to provide the same broad delegation function to the Director-General of the Australian Signals Directorate that his intelligence counterparts have, the delegation function has been limited. In this context, an appropriate balance has been found in providing this necessary flexibility to the Director-General of the Australian Signals Directorate, but importantly limiting it to Executive Level 1 officers and above.

Committee comment

2.106 The committee thanks the minister for this response. The committee notes the minister's advice that the Director-General's delegation power would be limited to proposed Part 5A, relating to employment arrangements for ASD staff. The committee also notes the minister's advice that the ASD operates a range of 'sophisticated technical capabilities and systems' and also undertakes secondments with other agencies and that, for these reasons, expertise regarding the use and engagement of staff sometimes rests with officers outside the Senior Executive Service.

2.107 The committee further notes the minister's advice that it is intended that the proposed delegation power be used sparingly and only after consideration of the nature of the activity and required outcomes. The committee finally notes the minister's advice that, although Executive Level 1 officers do not fulfil the types of leadership roles undertaken Senior Executive Service officers, they do fill senior positions and have significant responsibilities.

2.108 The committee reiterates its preference that generally delegations of administrative power be confined to the holders of nominated offices or members of the Senior Executive Service or, alternatively, that a limit is set on the scope and type of powers that may be delegated. In this instance the committee acknowledges that, although the proposed delegation power would allow functions and powers to be delegated to employees outside the Senior Executive Service, it is otherwise limited to ASD employees at Executive Level 1 or higher and the scope is limited to powers and functions relating to employment arrangements for ASD staff.

2.109 In light of the information provided and the fact that this bill has already passed both Houses of Parliament, the committee makes no further comment on this matter.

Privacy^[62]

2.110 Item 43 of Schedule 1 proposes to insert a new section 133BA in the

Anti-Money Laundering and Counter-Terrorism Financing Act 2006. The proposed section would allow the Director-General of ASD to communicate AUSTRAC information to a foreign intelligence agency if he or she is satisfied that it is appropriate in all the circumstances of the case to do so and the foreign intelligence agency has given appropriate undertakings for protecting the confidentiality of the information, controlling the use of the information, and ensuring the information will only be used for the purpose for which it is communicated to the foreign country.

2.111 The committee notes that AUSTRAC information^[63] may include a wide array of personal and financial information and the proposed section does not limit the purposes for which the Director-General may communicate such information with a foreign intelligence agency, other than that the Director-General considers it is appropriate to do so in all the circumstances. The explanatory materials accompanying the bill do not provide any information on why it is necessary to provide the Director-General with a broad discretion with respect to the purposes for which such information can be communicated to foreign intelligence agencies, merely explaining the operation of proposed section.^[64]

2.112 The committee therefore requests the minister's advice as to why it is considered necessary and appropriate to provide the Director-General with a broad discretion as to the purposes for which AUSTRAC information may be communicated with a foreign intelligence agency.

2.113 The committee also requests the minister's advice as to the appropriateness of amending the bill so as to include at least high-level guidance as to the purposes for which AUSTRAC information may be communicated to a foreign intelligence agency.

Minister's response

2.114 The minister advised:

The new section 133BA for the Anti-Money laundering and Counter‑Terrorism Financing Act 2006 includes a very important consequential amendment as a result of the Australian Signals Directorate becoming an independent statutory agency.
At present the Australian Signals Directorate is part of the Department of Defence and is covered by the Department's own provision within the Anti-Money Laundering and Counter-Terrorism Financing Act 2006. As the Australian Signals Directorate will be becoming its own entity on 1 July 2018 it now requires its own listing under this Act.
This amendment to the Act does not extend or alter the current arrangement the Australian Signals Directorate receives by being part of the Department of Defence. Similarly, it is consistent with arrangements provided for all other intelligence and security agencies who require this function.
In this context, there already exists strong compliance safeguards and the Australian Signals Directorate is subject to some of the most rigorous oversight arrangements in the country. This includes being subject the oversight of the Inspector-General of Intelligence and Security, who has the powers of a standing royal commission and can compel officers to give evidence and hand-over materials. The Inspector-General regularly reviews activities to ensure the Australian Signals Directorate's rules to protect the privacy of Australians are appropriately applied.
This amendment made to the Anti-Money laundering and Counter‑Terrorism Financing Act 2006 is critical to the Australian Signals Directorate's work to combat terrorism, online espionage, transnational crime, cybercrime and cyber-enabled crime.
As an independent statutory agency, this amendment now ensures that information is able to be appropriately shared, consistent with how other Australian domestic intelligence and security agencies manage this type of information. This work across the intelligence and security community is central to defending Australia and its national interests.
In relation to the committee's further suggestion regarding whether it is necessary to amend the Bill to provide high-level guidance as to the purposes for which AUSTRAC information may be communicated to a foreign intelligence agency, I can advise that this is not necessary. This amendment is not, in effect, creating a new arrangement for the Australian Signals Directorate. These provisions reflect longstanding arrangements for agencies in the intelligence and security community, and there are strong safeguards in place, including the powers of the Inspector-General of Intelligence and Security, as noted above, to ensure the function is appropriately exercised.

Committee comment

2.115 The committee thanks the minister for this response. The committee notes the minister's advice that inserting proposed new section 133BA in the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 would not extend or alter the arrangements that currently apply to the ASD by virtue of being a part of the Department of Defence and is consistent with arrangements in place for other intelligence and security agencies. The committee also notes the minister's advice that this amendment is critical to the ASD's work to 'combat terrorism, online espionage, transnational crime, cybercrime and cyber-enabled crime' and that the ASD is already subject to 'strong compliance safeguards', including the oversight of the Inspector-General of Intelligence and Security, which will ensure the proposed power is exercised appropriately.

2.116 The committee finally notes the minister's advice that it is considered not necessary to amend the bill so as to include high level guidance as to the purposes for which AUSTRAC information may be communicated to a foreign intelligence agency for similar reasons—that is, the proposed amendment does not in effect create a new arrangement for the ASD and adequate safeguards are in place.

2.117 While the committee appreciates that the ability to communicate AUSTRAC information with foreign intelligence agencies is critical to the ASD's work, it notes that the minister's response does not directly address its original question—that is, why it is considered necessary to provide the Director-General with a broad discretion as to the purposes for which AUSTRAC information may be communicated with a foreign intelligence agency. The committee has consistently held that the existence of similar or equivalent powers in existing legislation is not a sufficient justification for including such powers in new legislation. The committee therefore remains concerned that the proposed provision would allow the communication of AUSTRAC information—which may include a wide array of personal and financial information—subject only to the requirement that the Director-General considers it appropriate, in all the circumstances of the case, to do so.

2.118 In light of the fact that this bill has already passed both Houses of Parliament the committee makes no further comment on this matter.

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[59] See correspondence relating to Scrutiny Digest No. 5 of 2018 available at: www.aph.gov.au/senate_scrutiny_digest

[60] Schedule 1, item 27, proposed subsection 27N(1). The committee draws senators' attention to this provision pursuant to Senate Standing Order 24(1)(a)(ii).

[61] The Director-General of ASD is a position the bill seeks to create. See Schedule 1, item 27, proposed section 27B.

[62] Schedule 1, item 43, proposed section 133BA. The committee draws senators' attention to this provision pursuant to Senate Standing Order 24(1)(a)(i).

[63] AUSTRAC information is defined in section 5 of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 as meaning eligible collected information (or a compilation or analysis of such information) and 'eligible collected information' is defined as information obtained by the AUSTRAC CEO under that Act or any other Commonwealth, State or Territory law or information obtained from a government body or certain authorised officers, and includes financial transaction report information as obtained under the Financial Transaction Reports Act 1988.

[64] Explanatory memorandum, p. 20.