Clifford Chance

The National Anti-Corruption Commission Bill 2022 (NACC Bill) has been introduced into Australian Parliament for the establishment of an independent agency to investigate "serious or systemic" corruption across the Commonwealth public sector.

On 28 September 2022, the Labor Federal Government introduced the NACC Bill which seeks to establish the National Anti-Corruption Commission (NACC), a specialist, centralised investigatory agency that will detect, investigate and report on serious or systemic forms of corruption in the Commonwealth public sector under the oversight of a Parliamentary Joint Committee and an independent Inspector.

The Federal Government has also confirmed that the Australian Commission for Law Enforcement Integrity (ACLEI) will merge into the NACC. In the Budget 2022-23, the ACLEI has been allocated additional funding of $27.5 million in preparation for the NACC and its average staffing levels have been expanded from 110 to 133.

Key Concepts

What will the NACC investigate?

• The NACC Bill adopts a wide definition of "corrupt conduct", which is intended to reflect long-standing standards of conduct by public officials and their existing duty, including the duty to act in the public interest. The proposed definition captures the conduct of any person (whether or not a public official) that adversely affects, or could adversely affect, either directly or indirectly:
  • the honest or impartial exercise or performance of any public official's powers, functions or duties;
  • breach of public trust by a public official;
  • abuse of office by a public official;
  • misuse of information acquired in the person's capacity as a public official; and
  • corruption of any other kind by a public official.
• Conduct may also be corrupt even if it occurred prior to the NACC's establishment.
• The NACC Bill excludes certain conduct from the NACC's jurisdiction, such as conduct amounting to political activity where the conduct does not involve the exercise of a power or use of public resources, and functions of a judicial nature.

What is the NACC's jurisdiction?

• The NACC Bill empowers the Commissioner to investigate a broad range of public officials, including Commonwealth Ministers, parliamentarians, heads and employees of Commonwealth agencies, government contractors and their employees, and people or bodies providing services, exercising powers or performing functions on behalf of the Commonwealth.
• The Commissioner can only commence an investigation in relation to a corruption issue if it involves serious or systemic corrupt conduct. The NACC Bill does not define the terms 'serious' or 'systemic'. The terms are intended to take their ordinary meaning.
• The Commissioner may deal with the corruption issue either by:
  • investigating it themselves or jointly with a Commonwealth agency or a State or Territory government entity; or
  • by referring it, for investigation, to the Commonwealth agency it relates to; or
  • by referring it, for consideration, to the Commonwealth agency it relates to.

What investigative powers will the NACC be equipped with?

There are three main proposed methods by which the NACC can investigate corruption issues:

1. Compulsory production powers: the NACC is proposed to have broad powers, including the power to compel production of documents or information, obtain search warrants, intercept telecommunications and use surveillance devices (subject to certain existing thresholds), and summon witnesses.
2. Private and public hearings: the NACC will also be able to hold hearings, which will be held in private unless the Commissioner is satisfied that a public hearing is justified by "exceptional circumstances" and is in the public interest. The extent to which hearings would be held in public has been a key contention regarding a proposed NACC and the Opposition leader, Peter Dutton, has noted that the default position of private hearing had "got the balance right".
3. Search powers: subject to limited exceptions, the NACC will have the power to enter most places occupied by Commonwealth agencies without a warrant, exercise inspection powers, and, in limited circumstances, seize things. The NACC will also have the ability to conduct a search of a premises or person (pursuant to the search warrants referred to above) and will have the power to stop and search conveyances for things relevant to an indictable offence or to a corruption issue the Commissioner is investigating, without a warrant, in limited circumstances.

How can a corruption issue come before the NACC?

• A corruption issue could be referred to the NACC in, broadly speaking, two ways:
  • any person, including members of the public, providing information about a corruption issue to the Commissioner; or
  • an agency head, when becoming aware of a corruption issue or suspecting that the issue could involve corrupt conduct that is serious or systemic, refers the issue to the Commissioner, as required by the NACC Bill.
• Notably, the NACC Bill provides a range of protections to persons who provide evidence or information to the NACC for the purpose of NACC Bill. These protections include immunity from civil, criminal and administrative liability for whistle-blowers and other persons and criminal penalties for anyone taking or threatening to take legal reprisal action against them.
• The NACC would also be able to commence an investigation on their own initiative.

Implications & Next Steps

The NACC Bill has since been referred to a Joint Select Committee for inquiry, which is due to report on or before 10 November 2022. Subject to the passage of the legislation by the end of 2022, the NACC is expected to be established in mid-2023.

The NACC will have ramifications referable to more than public officials and will extend to any person that could adversely affect (directly or indirectly) a public official. To that end, any businesses dealing with public official will need to consider:

• updating their anti-bribery and corruption policies to reflect the broad scope of the meaning of "corrupt conduct";
• conducting regular audits of its employees' conduct in relation to giving and receiving gifts and benefits to ensure ongoing due diligence; and
• in a similar way to other federal regulatory investigations that may be commenced, develop an appropriate plan to respond and manage the receipt of production notices, the execution of a search warrant, or the commencement of an investigation.