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Issue 02 2014 UTS Law Students’ Society


24 22 14 Red Light on Regulations Fair or Fake? We Tapped That Why sham contracting remains one Dr Penny Crofts on why licensing of How phone tapping practices in Australia fail to balance privacy and of the hidden problems in Australian the NSW sex industry is redundant. workplaces. protection. 26 Shaking Hands with Sri Lanka Are the lengths Australia has gone to in the name of boarder control justified?

30 TFB EXCLUSIVE! Q&A with Kate McClymont on inquiries, investigative journalism and integrity.

34 Verbatim 8 of the most memorable faces epitomising corruption and dishonesty.

tfb 2014 [Issue 02]

the full bench Editors

Francesca Elias Arciuli Emily Meller Sefakor Dokli Johanna Fisher

Designer Elyse Kerr © UTS Law Students’ Society This publication is copyright. Except where permitted under the Copyright Act, no part of this publication may form or by any means (electronic or otherwise) be reproduced, stored in a retrieval system or transmitted by any process without specific written consent of the UTS Law Students’ Society. Enquiries are to be addressed to the publishers. Disclaimer All expressions of opinion published in TFB are not the official opinion of the UTS Law Students’ Society unless expressly stated. The UTS Law Students’ Society accepts no responsibility for the accuracy of any opinions or information contained herein and readers should rely on their own enquiries to make decisions in their own interest. . Images and illustrations All images, unless provided to TFB personally for the purposes of this publication, were sourced from the photosharing website ‘Flickr’, with attribution provided within the text to specific publishers.

Cover Artist Devin Smith 2008.

Marketing Olivia Kilponen

With special thanks to:

Ashleigh Barnes, Vice President (Education), and Lloyd Wood, President of the UTS LSS, for their guidance, support and contribution to the second edition of The Full Bench in 2014.

With Thanks To

Daniel Mckenzie, Susie McKenzie and Co. Kwik Kopy Neutral Bay 6/129-133 Military Rd, Neutral Bay, NSW 2089 Tel 02 9953 3077 Fax 9953 0530

the full bench (tfb)

is published in Sydney annually by: UTS Law Students’ Society PO Box 123, Broadway NSW, 2007 Room CM5A.01.08, City Markets campus, Cnr of Quay Street & Ultimo Road Ph (02) 9514 3448 Fax (02) 9514 3427 Website

Contents 4. Editorial / 5. President and VPE Welcome 6. Editors’ Question / 9. Obiter / 10. 10 Words or Less 11. The IMF and Corruption / 14. We Tapped That 17. Don’t Let A Bottle Of Wine Get You Down / 18. Building a New India 21. A Brief History of Corruption / 22. Fair or Fake? 24. Red Light On The Regulations / 26. Shaking Hands with Sri Lanka 30. Q&A with Kate McClymont / 32. Imagining Integrity 33. Stop. Hammer Time. / 34. Verbatim


Editorial F



rom Watergate to GrangeGate, Kings Cross to bearers of the cross; sinners to statesman and jurors to jailbirds, it would seem that corruption and the inevitable scandal that follows permeates all political, social and legal echelons. But before you delve into the articles that explore examples of corruption in Australia and abroad, we must answer the question – what is corruption? According to criminal law, corrupt conduct is a deliberate act or acts of dishonesty, abuse of public trust, breach of the law, or abuse of power that undermines, is against the interests of or is incompatible with the impartial exercise of an official’s powers, authorities, duties or functions. These officials may be public officials or other authoritative figures. Section 8 of the Independent Commission Against Corruption Act 1988 (NSW) provides a definition in the same vein, with the general nature of ‘corrupt conduct’ being conduct by public officials that adversely impacts the impartial exercise of their duties. We may also glean an understanding of what corruption is, by understanding what corruption is not. For example, if one defines corrupt conduct as the breaking of laws, a skewed vision of what is classified as corrupt arguably arises. Leaders that encouraged widespread civil disobedience, such as Mahatma Ghandi, with his movement of Satyagraha, or Martin Luther King Jr, who, inspired by Ghandi, championed non-violent action in the Native American Civil Rights Movement, would thus be amongst the most corrupt of all people. These two examples alone demonstrate the danger of limiting an understanding of what is corrupt to societal legal standards, as those standards may themselves be unfair, dishonest or corrupt. It is also arguable that corruption is characterised by certain traits, the evidence of which indicates its operation. These traits could include deception, exploitation, oppression and depravity. Whilst these definitions all appear to differ in some way, they are similar insofar as they involve the abuse or exploitation of power of a vulnerable person or party by some in a position of authority, as is highlighted by our UTS LSS President. With this understanding of what corruption does and does not entail now framing your considerations, I now invite you to go forth and learn about the different areas and instances of corruption covered by our ever-enthusiastic contributors. Dr Penny Crofts subverts misconceptions surrounding the sex industry and its apparent link to corruption on page 24. Catie Moore explores flaws inherent to the International Monetary Fund (IMF) and its policy in relation to loans on page 11, triggering considerations

of whether or not we should turn away from institutions that house corruption. Including a Q&A with Sydney Morning Herald journalist Kate McClymont, articles tackling the ICAC scandals and related issues and an analysis of Australia’s varying foreign policies including phone tapping and offshore processing of refugees, this edition promises scandal, intrigue and disbelief by the bucket-load. We would also like to take this opportunity to list off a big round of thank-you’s! We thank our permanent contributors for 2014, Paige McNamee and Olivia Kilponen, who is also our marketing editor, for their commitment to ‘Obiter’ and ’10 words or less’ respectively. We also thank our fantastic contributors to this edition and particularly Dr Penny Crofts and Kate McClymont, whose involvement we are both honoured and thankful to have. We thank our designer for The Full Bench over the past year, Hamish Burrell, for his hard work and helping shape TFB into the publication it is today. Further, thank you to Elyse Kerr, for her enthusiasm dedication to this edition on very short notice. So please, delve into the dishonest dealings explored in this edition with a keen and critical mind, and we encourage you to post any feedback or comments to The Full Bench Facebook page for discussion! Happy reading! Francesca, Johanna, Emily and Sefakor.

FROM THE UTS LSS From the UTS Lss President

elcome to the second edition of The Full Bench for 2014. Corruption can take many forms and enter a system in many ways. An incident of corruption may be isolated and small in scale, or it can occur on a grand scale and generate economic and social damage. While the incidents of corruption can be very different, all are united by a common theme, that being the misuse of power for personal gain. As such, it strikes at the heart of the system of law and government and is highly pertinent to us as students of the law. Consider the following pages and explore the many guises of corruption, and ways we, as future champions of the industry, can tackle it. The theme of corruption is also fitting in light of the recent media hype surrounding former Premier Barry O’Farrell’s dramatic resignation following an ICAC investigation. Such an event was just one of an innumerable range of issues concerning corruption in the law, both domestic and globally, and The Full Bench team have selected some of the most topical areas for this edition. These include a look at ICAC, Royal Commissions, foregin political scandal, phone tapping, the Nauru processing centre and the sex industry, among many other things. As always, I would like to extend a sincere thank you to The Full Bench Subcommittee, comprising of Emily Meller, Johanna Fisher, Sefakor Dokli and Olivia Kilponen, and of course to their tireless leader and the UTS LSS Publications Director, Francesca Elias Arciuli. I would also like to thank our brilliant designer Elyse Kerr, our unstoppable Vice President (Education), Ashleigh Barnes and our sponsors for this edition of The Full Bench, Clayton Utz and Henry Davis York. Most importantly, I thank our wonderful contributors for their insightful and interesting articles. In the lead up to final exams, I wish you all the best of luck for your studies and know the time you take out of your cramming will be well spent reading this thought-provoking publication. Grab a coffee and read about corruption - no milk, no sugar. Kind regards, Lloyd Wood UTS LSS President


ith corruption currently at the forefront of the Australian consciousness, there seemed no better theme for the second edition of The Full Bench in 2014. Throughout the proceeding pages you will read about, and cringe at, dishonest dealings, scandal, exploitation, depravity, vice, perversion and sleaze – corruption in all of its fine forms. However, as you read this edition of The Full Bench and grapple with the tough issue of corruption and the law, I implore you to remember that hope is not lost. So long as we are shocked, so long as we are outraged, so long as ICAC retains its teeth and the public retains its watchful eye and so long as there are publications such as The Full Bench holding our leaders to account, our government, our legal system and our country are safe. It is only in countries were corruption is ignored, tolerated or worse, considered inevitable (see ‘Building a New India’ on page 18 for an interesting discussion of this point) that corruption itself has arguably won, at least until steps are actively taken towards stamping out corruption ingrained in political and social structures. As always, I would like to reiterate Lloyd’s words and thank everyone involved in the creation of the second edition of The Full Bench. Be it as an Editor, a Contributor or a Sponsor, each and every one of you has contributed to the fight against the beast of corruption. To honesty and morality! Kind regards, Ashleigh Barnes UTS LSS Vice President (Education)




From the UTS LSS Vice President (Education)

Editors’ Question Should Australia televise court cases to increase transparency and combat corruption?

This edition we asked our editors whether or not Australia should consider publically televising contentious court proceedings of public interest nationally. Read on to see how they way up the pros and cons, and reflect on whether televising such contentious material would really serve its intended purpose or operate to perpetuate it.



EMILY SAYS: No. Televising court cases would require strict supervision to protect witnesses, defendants and sensitive material – as seen in the Pistorius trial.1 Giving courts this much control over filming undermines the principle of open access. All cameras operate from a particular angle – how can we guarantee that televising will be used to stem corruption, rather than as a form of entertainment? The situation in Australia is ambiguous. There is no statutory prohibition on televising cases, but there is equally no international mandate requiring televising as a means of public access.2 Ceremonial proceedings can be televised, and in the past documentaries have been made of court proceedings.3 In a report to the Minister for Justice in 1994 it was recommended that televising be permitted on a ‘strictly

controlled basis’; with recommendations including but not being limited to the presiding judge having discretion over content covered and the equipment and personnel present in the courtroom, no close up shots and consent would be sought from witnesses.4 That is a lot of power over televising. This high level of control raises the question of whether the principle of open access is undermined. Kirby J has ‘no doubt that television and radio will ultimately enter the courtrooms in Australia’.5 If this is the case, it should form only one small part of creating a more transparent system that also utilises the internet, publication of transcripts and public forums for debate.6 This will ensure the public sees all angles, not just camerafriendly ones.


I disagree with the idea of televising court cases in Australia in order to increase transparency. The question I am compelled to ask in response is, in what area are we attempting to increase transparency? If calls to televise court proceedings are to ensure transparency within the judiciary, they are unfounded. Checks and balances already exist to safeguard against corruption within our judiciary, evidenced in the Westminster system of responsible government that has created an independent and robust judicial arm. Although ongoing ICAC investigations make quite evident that corruption is still prevalent in this country, I don’t believe this corruption extends to the judiciary, so as to warrant televising court cases. Furthermore, according to Transparency International, an organisation that has developed a global corruption ranking, whereby the higher the number the more corrupt the State, Australia ranks ninth out of 177 countries. The Australian judiciary maintains a high level of prestige, a somewhat old school charm that would be entirely eroded by the introduction of American style televising of court proceedings. In 2011 Western Australian Chief Justice Wayne Martin remarked that televising proceedings was necessary for transparency. He stated that ‘people don’t have confidence in things they can’t see and hear being done; things are done behind closed doors and people get very nervous about it’.7 Further, I believe here is where the argument for televising court proceedings is fundamentally flawed court proceedings in this country are not private, they go on the public record. There is no need to drain the public purse by funding televised court cases or worse yet, turning the independent judiciary into a commercial enterprise for the media giants.

Imagine a world where you could simply flick on the TV to watch a televised court case. A real-life Law and Order program would no doubt be entertaining, but would it really increase transparency? In recent years, the general public has become increasingly intrigued by the justice system, particularly following high-profile trials such as those of Simon Gittany and Kieran Loveridge. However, as commercial media outlets largely control the dissemination of information regarding trials, it can be hard for the layperson to distinguish fact from fiction. By opening up the courts to the public, proponents argue that the judicial system will become more transparent by allowing the wider community to adopt a voyeuristic role in observing courtroom drama. However, many fear that televising court cases would distort the justice system by encouraging judges and juries to behave differently in an attempt to appease the public. Furthermore, the broadcast of court cases would effectively bring private matters into the public domain, which poses several threats to the judicial system. Particularly, witnesses may be uncooperative when giving evidence, particularly in relation to criminal matters that might be confronting for victims. By encouraging the public to speculate and form an opinion before a judgment is handed down, the defendant is exposed to prejudice that may permanently impact his or her life – even if they are found not guilty. Bearing all of these considerations in mind, we need to determine whether the need for transparency outweighs the possible impacts on the justice system. The legal system already operates effectively without public interference – do we really want to create another reality TV show?




Editors’ question continued




Televising trials could potentially increase transparency and foster public engagement with the legal system and courts. Apathy is one of the major social issues facing the Australian population,8 and many Australians just don’t care enough about the legal system to engage with it, ultimately to their own and national detriment. If we compare Australia to nations where major trials are televised, such as the US, we find that the general population invests in the outcome of trials. One could argue that, perhaps, televising trials is a factor in their being more actively engaged in legal processes. They could serve a further educative purpose of acting as a deterrent to teach would-be offenders the consequences of breaking the law. Despite this argument, I ultimately agree with all other editors – trials should not be televised. My main concern, touched on by Sefakor, is that the very recording of the trials will jeopardise the integrity of the public institution that is the courts. In an economic climate leaning more heavily than ever before towards the privatisation of public services and works, it is likely that media outlets, with their own agendas and loyalties, would fight for the lucrative distribution rights. Given the tenuous relationship of the current government and ABC, I am not inclined to believe the government would consider funding the public coverage of trials for a second. This would leave not only the representation of the judiciary, but also the entire legal system, up to the media giants and their whims, creating a new breeding ground for corruption as the private and public sectors intermingle and blur.


2. 3. 4. 5. 6.



Robyn Dixon, ‘South African judge permits televising parts of Oscar Pistorius trial’ LA Times (25 Feb 2014) < la-fg-wn-south-africa-oscar-pistorius-trial-20140225>. Justice Robert French, ‘Radio and television broadcasting in the Magistrates' Courts - is there a future?’ (FCA) [2006] FedJSchol 3, [23]. Ibid. Access to Justice Advisory Committee, Access to Justice: An Action Plan (May 1994). Justice Michael Kirby (1983) ‘The Judges’, ABC Boyer Lectures (online) <http://> . Dr Stepniak, Technology and Public Access to Audio-Visual Coverage and Recordings of Court Proceedings: Implications for Common Law Jurisdictions (2004) 12. ‘Chief Justice: WA court cases ‘need’ to be televised’ 12 June 2011 <>. John Faulkner, ‘Apathy and Anger: our modern Australian democracy’ (Speech delivered at the Henry Parkes Oration, Tenterfield NSW, 22 October 2005).

Obiter By Paige McNamee ‘Contending with the scourges of Nazism, apartheid, the Khmer Rouge and other affronts required courage by great nations and ordinary human beings alike. It is now your solemn duty to address the scourge of human rights violations and crimes against humanity in the Democratic People’s Republic of Korea.’ - The Hon. Michael Kirby AC CMG, chief author of the UN Security Council, challenging the United Nations to take action in North Korea. ‘You don’t need a peg leg or an eye patch. When you ram ships; hurl glass containers of acid; drag metalreinforced ropes in the water to damage propellers and rudders; launch smoke bombs and flares with hooks; and point high-powered lasers at other ships, you are, without a doubt, a pirate, no matter how high-minded you believe your purpose to be.’ - Kozinski CJ, Institute of Cetacean Research v Sea Shepherd Conservation Society 12-35266, United States Court of Appeals for the Ninth Circuit, 25 February 2013. ‘The occasional error is a small price to pay for the media’s capacity to expose and deter.’ - Geoffrey Robertson in Transparency International’s Global Corruption Report 2007, p 114.


1959 The vintage of Penfold’s Grange that spelled the end of Barry O’Farrell’s time as the NSW Premier (SBS 2014, New South Wales Premier Barry O’Farrell announces resignation).

The charges made against disgraced Former Labor MP Craig Thomson during his time as the HSU Secretary. He was found guilty of almost all of them (Cowie, T 2014, ‘Craig Thompson Guilty on Some Charges’, SBS).

$17 million The amount that disgraced politican Eddie Obeid was to make after selling Cherrydale Park in corrupt dealings (ICAC 2013, ICAC Finds Corrupt Conduct over Mount Penny Tenement).

42 Years since the Watergate Scandal rocked the United States (CNN 2014, Watergate Fast Facts).

4 Hours per week, for 1 year, is the amount of time that former Italian Prime Minister Silvio Berlusconi will serve in community service for tax fraud (BBC 2014, Berlusconi begins one year community sentence).



Unkalno Tekno 2014

10 words or less ‘Preventing Another #GrangeGate’ By Olivia Kilponen




fter serving three years as the Premier of NSW, Barry O’Farrell resigned after admitting his failure to declare a bottle of Penfolds Grange – that had been valued at over $3000 – received as a gift from the CEO of Australian Water Holdings (AWH), Nick Di Girolamo. This was in the face of the Independent Commission Against Corruption (ICAC) discovering a handwritten note of thanks from O’Farrell to the now infamous CEO. The discovery of “Grangegate” was a serendipitous win for ICAC, in the midst of investigating possible financial benefits obtained by AWH, and the curtain call for O’Farrell. All of a sudden, it was all over for Barry. The drops of the 1959 vintage had been enjoyed with vigour, and a thank you note from the Premier himself had been signed with a flourish. Whilst the Premier ultimately resigned for his failure to declare a parliamentary donation, one must question how poor the Premier’s memory truly was. This raises the possibility that whilst in power O’Farrell possibly, although not certainly, engaged in conduct that was, at the very least, dishonest. However, time has shown that his resignation is ultimately irrelevant to the operation of the NSW Government. This reinforces the idea that the problem lies not in being acting dishonestly or abusing public office, but being caught. This raises an important question – if the NSW Premier can so easily be toppled, how much governmental corruption is undetected? And more importantly, what could the government do to actively prevent corruption from occurring in the first place? We turned to our loyal TFB readers to enlighten us on some potential solutions.

‘Fund education, teach people corruption is bad and sack Abbott.’ - Jack Fogl ‘Only accept vodka.’ - Katherine Agapitos ‘Introduce harsher penalties that are more “goon” than “vintage grange”.’ -Douglas Prime ‘Memory blancs and cabernet meetings, I am the lone granger.’ - Rosie Kavanagh ‘Establish a fiduciary-like duty between politicians and voters, like directors-shareholders.’ –Saad Khan ‘Drink less red wine.’ – Catie Moore ‘Introduce measures to increase transparency in the lobbying process.’ – Francesca Elias Arciuli

Ersu 2013


CATIE MOORE examines the real consequences of the IMF’s loan schemes and the way in which poverty can be further entrenched when private corporate interests and public policy collide. Do ineffectiveness, opacity and mismanagement amount to corruption?

Martin Scorsese


he International Monetary Fund (IMF) was established in the second half of the twentieth century in order to promote ‘international monetary cooperation through…consultation and collaboration on international monetary problems’.1 The IMF was thus created to place importance on facilitating the expansion of international trade, establish multilateral systems of payment to assist transactions between member states, and eliminate foreign exchange restrictions. However, it has been argued that in the context of the increasingly globalised world, the IMF has become a Westerncentric institution, the US holding the only “veto” power. Its mandate has been stretched beyond what was originally contemplated, and with the influence of the Cold War, the IMF has been seen as a ‘capitalist club’.2 Accordingly, the Western ideal of a free market economy is considered essential to “save” the developing world, however, in reality, is argued to primarily serve foreign direct investment (FDI) as transnational banks, with headquarters in Western states, have been able to develop a strong, and at times formidable presence in emerging nations. As such, it has been argued the IMF promotes the interests of industrialised states, while reinforcing and widening the division between the developed and developing worlds.3 This article will examine arguments supporting the inherent prejudice that penetrates the IMF through the influence of Western governments. A nexus will be drawn between the influences of private corporations and the policies and procedures implemented by the IMF, examining how this influence directly affects vulnerable countries and calling into question the integrity of

the system as it currently operates. The fundamental question is whether there is merely the potential for an abuse of power, or whether in its current form, many of these programs actually amount to a form of “de facto” corruption.


The IMF lends money to nations in economic strife or uncertainty, effectively attempting to bail them out of recession by stimulating growth in their domestic economy. However, these loans are given with specific conditions. Ultimately, the IMF imposes various economic and political restrictions, including opening their markets to foreign direct investment, and often various microeconomic policies that must be implemented by the receiving nation’s government. These conditions are designed to improve the economic health of a state and therefore increase the likelihood of repayment. The irony is that in many cases IMF imposed conditions have operated to weaken recipient economies; making them increasingly unstable, opening developing markets to ruthless Western competition and leading to a rise in unemployment as industries are destroyed and resources manipulated.4 This is especially evident in the IMF mandated Structural Adjustment Programs (SAPs), which are ‘the policies developing countries must pursue in return for economic benefit such as loans or investment’.5 Largely implemented throughout Africa in the 1980s and 1990s, critics of SAPs state that they do not generate growth or attract investment, and that poverty measurably increases under the programs.6 A root cause of this is the dependency the programs promote, as monocultural industries take root in place of traditional ones and can only be exported by virtue of the SAPs to developed nations.7 The IMF rebuts this, stating that ‘the use of



‘It is interesting that these themes of crime and political corruption are always relevant.’

conditionality is instrumental in ensuring that scarce resources are directed to those countries in which they can be put to best use’.8 Further, they argue the key impediment to increased confidence and private investment is the ‘lack of transparency, mismanagement,



and outright corruption’ in the recipient nations.9 The overwhelming criticism of this ongoing policy raises questions in regards to the nature of conditionality and the value of the conditions themselves. In many cases, such as Ethiopia, it is not often that the government receiving the loan is able to even weigh in on the microeconomic reforms that are to take place, such as fiscal policy or national financial regimes. As such, the IMF is arguably seen to overstep their mandate and infringe the political and economic sovereignty of developing nations, as well as largely contradict the democratic ideals they seek to impose. How can the citizens of these nations have any voice in what type of economic and political policy will be in place, if the government itself has no control over such decisions? Further, the IMF’s market policies tend to marginalize domestic sectors that are not export oriented. Government resources are spent on reducing the debt, and simultaneously, the government allocates fewer sources for long-term investments like infrastructure, making the benefit to citizens a secondary priority. Further, the annual financial budgets of developing countries are being prepared by IMF officers who are neither elected by citizens nor liable to them, despite the introduction of Poverty Reduction Strategy Papers, which the borrowing nations are encouraged to draw up to increase their involvement.10 Consequently, the IMF is designing the financial future of these nations with no accountability or transparency. Arguably, it is therefore part of the problems surrounding financial mismanagement of aid programs that it criticises and aims to rectify.11


The external influence on loan conditionality is not limited to Western nations. The influence of private financial institutions is also evident through an examination of IMF surveillance and conditional loans subject to the private sector. It is undisputed that supplementary financing of IMF loans has been necessary since its inception. However,

the relationship between private institutions and the IMF has intensified since the focus of the IMF shifted from post-war Western Europe to the developing world, where natural resources are rife and regulation is rare. Whether or not this relationship is officially condoned (the IMF’s Articles stipulates agencies dealing with the Fund are nation states through their Treasuries or central banks), it is publically acknowledged. Nevertheless, what is self evident in an examination of these major financial institutions such as Citigroup, is that they have an educational grounding in Western economic theory, with emphasis placed on the efficiency of the market and upon the growth opportunities held in unfettered free trade and financial transactions.12 The relationship between the IMF and these private institutions is mutually beneficial. The Fund is dependent on these private sector organisations for economic capital, and the private sector organisations inevitably want to expand by participating and investing in vulnerable developing nations. This additional financing allows the IMF to implement wide-spreading and ambitious reform, however simultaneously allows private corporations to possess leverage over the IMF and its borrowers. This exercise of influence by private corporations hinges on the ability to generate a believable threat that substantial financing will be lost if demands are not met. Accordingly, this mutually dependent relationship means that the lines between international governmental responsibility and private firms’ drive for profit have been blurred, arguably leading to a situation in which the IMF supports the exploitation of developing and emerging markets by large-scale transnational corporations. The practical effect of this relationship is extensive, and it is beyond the scope of this article to discuss all of the specific instances where its effect is at its worse. Primarily, the IMF’s conditionality agreements often include ‘bank friendly conditions’, which specify that the nation must pay back a commercial bank creditor to obtain an IMF loan. An example is Argentina’s 1992 Extended Fund Facility, which included ‘set asides to support future debt-reduction operations with Argentina’s commercial bank creditor’.13 These ‘bank friendly’ loans increase the likelihood of private institutions making a profitable return on their loans and making it more costly for States to default on their payments. As such, private creditors have a covert influence on a State’s


In a brief examination of the IMF, specifically the implementation of conditional loans including SAP’s and its relationship with private corporations, it becomes evident that it is an organisation with the capacity to abuse power. The conditions attached to the loans granted to developing nations, by both private institutions and in accordance with IMF policies, impinges upon the economic sovereignty and associated decision-making processes of the recipient States. This essentially undermines their freedom and democracy. Arguably, the IMF is engaging in a covert, indirect, “de facto” form of corruption by valuing the profitability of private corporations over the economic health of developing nations. This blurred line between international government and private enterprise forces a re-evaluation of what “corruption” really is, and where it might be occurring in plain sight.


Articles of Agreement of the International Monetary Fund (Article 1), adopted at the United Nations Monetary and Financial Conference, Bretton Woods, New Hampshire, July 22, 1944.


James M Boughton, ‘The IMF and the Force of History: Ten Events and Ten Ideas that have Shaped the Institution’ (May 2004-revised April 2006) IMF Working Paper NO.WP/04/75, 11.


Courtney Stearne, ‘The International Monetary Fund and International Private Financial Institutions: A Compromising Relationship’ (2009) 6 Macquarie Journal of Business Law 63


Devran, ‘Is Conditionality for Loans from International Financial Institutions a Legitimate Way to Influence National Policy?’ (2013) 2 Ankra Bar Review 189-199.


Tim Dunne and Brian Schmidt, ‘Liberalism’ in John Baylis and Steve Smith (eds), The Globalization of World Politics (Oxford University Press, 2nd ed, 2001) 90, 173.


IMF, The IMF’s Enhanced Structural Adjustment Facility (ESAF): Is it Working? (September 1999) < ft/esaf/exr/>.


See Theodore Cohn, Global Political Economy (Longman, 2010) 108.


See IMF, above n 6.


See IMF, The IMF’s Enhanced Structural Adjustment Facility (ESAF): Is it Working? (September 1999) < pubs/ft/esaf/exr/>.


See the IMF ‘Poverty Reduction Strategy Papers (PRSP)’, Thursday 15 May 2014, <>.


IMF, above n 6.


Stearne, above n 3, 77-78.


Press Release No. 92/27, 31 March 1992; EBS/92/46 Supplement 1, 13 April 1992.



actions once it has received the funds, and direct access to information regarding the State’s borrowing policies and financial status as to assess its performance. However, this information is often exploited to serve their own foreign investment purposes, and private institutions take advantage of this knowledge to the country’s detriment and their benefit. It can therefore be argued that the IMF is increases the global disequilibrium rather than correcting market failures. They covertly allow manipulation and exploitation of vulnerable markets, where the funds directly funnel back into industrialized economies, whilst developing states are left bereft and exposed.

Garann. 2006

We Tapped That Phone Tapping in an Era of Global Governance



Once seen by Australians to solely inhabit to realm of foreign despots and scandal, phone tapping has been found to take place in our own backyard and by Australian agencies. EMILY MELLER discusses the real scope of phone tapping powers, and whether we have an inherent right to protection against them.

The phrase “phone tap” conjures an image of a Cold War era spy movie – the kind where all the bad guys still have Soviet accents and moustaches. The idea that, with all the other shiny new telecommunications technology available, any self-respecting spy agency would still rely on something as archaic as phone tapping seems laughable. Yet, if you have seen a news report in the last nine months, you will know it is far from an obsolete practise. Whether it’s News of The World journalists, Independent Commission Against Corruption (ICAC) or the Australian Signals Directorate (ASD), phone tapping seems to have come back into fashion with a vengeance. A cursory glance at the ICAC reports reveals that they are not only an excellent form of entertainment,1 but a powerful tool in the fight against corrupt conduct. Most of us would agree to give up a degree of personal privacy to assist the investigation of crime and corruption. Yet, with the continually expanding powers of the government and its agencies allowing access to our communications, do we have any real idea who might be listening? Even if we do, do we have the right to stop them? The recent leak of documents, revealing that the Australian government accessed the mobile phone calls

of Indonesian President Susilo Bambang Yudhoyono, highlights many of the problems with our current approach to phone tapping.2 This is mainly because it wasn’t just the President’s phone that was tapped – it was the tapping of his wife’s phone that was a more offensive affront to privacy. The leaked document also reveals that other ‘Leadership Targets’ included a television personality and commentator, numerous confidants and the former Vice President.3 Instead of issuing an apology, Prime Minister Tony Abbott responded that ‘all governments gather information’, similar to the schoolyard logic that it’s okay of everybody else is doing it.4 He’s not wrong. Outside of our borders the US, Canada and the EU all engage in phone tapping. However, there is a fundamental difference in our approaches, namely the positive right to privacy enjoyed by those citizens. The EU, for example, balances their phone tapping powers against Article 8 of the European Convention on Human Rights, while Canadians have the ‘freedom from unreasonable search and seizure’.5 Does this mean we should stop phone tapping in Australia all together? Probably not. Even the EU

‘…with the continually expanding powers of the government and its agencies allowing access to our communications, do we have any real idea who might be listening?’ The surveillance was carried out by the ASD, who form part of the Australian Defence Force. Their slogan, which appeared on the leaked intelligence documents in an amazingly dated font that would give graphic designers nightmares for weeks, reads ‘Reveal Their Secrets – Protect Our Own’.17 The Director-General of Security is able to apply for a warrant under s 11, if it relates to Australia’s international relations and it is specified why the information cannot be attained by other means. 18 It has been speculated that the reason for targeting the President’s wife, as well as the President, was not to investigate his activity but monitor her steady rise to power in Indonesian politics.19 Even if this is true the question still remains, couldn’t the Prime Minister have obtained the information another way – say, as the Indonesian President quipped, just by asking?20 These events parallel those in the landmark case of Flanagan v Comissioner of Australian Federal Police (AFP) (1996) 134 ALR 495. The AFP tapped the phone of both the suspect Mr Flanagan and his wife under the same warrant. It was argued that the AFP was justified in broadening the warrant in order to carry out their full investigation. The majority held that the warrant under s 46(1) would cover some of the phone calls, but not all of them. It was not possible to know which taps were relevant to the investigation until they were heard – there may well be some calls directly connected to the investigation. Whilst this may be good law it leaves a gap that the TIA Act has yet to fill. What happens to the communications intercepted that are not relevant to the investigation? Should they be immediately destroyed? The court seemed to think so. If this were the case, and this law was applied to our tapping of the Indonesian President, there would need to be clearly defined reasons for the tap. Merely citing ‘research’21 is an insufficient justification for what amounts to a serious breach of privacy. The way forward is not to stop the practise of phone tapping completely. It is a powerful tool for stemming corruption. However, the Amendment Act went too far, and now the Senate needs to balance these powers with our rights to privacy. It is one thing to agree to a level of surveillance and co-operation for the public good – it is another to have a clear understanding of exactly how much privacy we are giving up, and at what point we should refuse.



acknowledges that it is an integral part of an effective crime and corruption fighting policy.6 Further, it is argued that as citizens of a Western democracy, we must be willing to partially give up our privacy to enable the government to keep us safe.7 Within a defined scope, most would agree that phone tapping in the name of security is justified. The issue is that, currently, there is no clear boundary. The Telecommunications (Interception and Access) Act 1979 (Cth) (TIA Act) regulates the interception and access to telecommunications. Under s 46(1) of the TIA Act, courts are able to authorise the interception of telecommunications when there are ‘reasonable grounds’ for suspecting an offender in an investigation ‘is likely to use the service’ and the information relates to the investigation being conducted.8 Under s 9 a warrant can only be issued by the courts or the Attorney General, and similar provisions govern the gathering of international security intelligence under s 11. ‘Agencies’ that may apply include the Australian Federal Police, the ICAC and the Corruption and Crime Commission.9 After the Telecommunications Amendment Act 2006 (Cth), the power to intercept was extended beyond ‘the particular person involved’.10 It now includes communications by another person ‘with whom the particular person is likely to communicate’.11 This person does not have to be a suspect in an investigation at all, they merely must have the potential to communicate with a person being investigated – this can include spouses, doctors, lawyers and friends who are entirely innocent.12 Any taps obtained, following the amendment, can be collected, shared between agencies and used as evidence, with very few restrictions such as lawyer-client privilege or not being used against the party who provides them. These are safeguards in place under the Anti-Terrorism Act (No 2) 2005 (Cth) 13 – so why not also under the TIA Act? The Senate is currently reviewing the TIA Act, with a report to be tabled on June 10 of this year.14 Amongst other things, the terms of reference dictate they consider recommendations made by the ALRC,15 who particularly recommended that any non-material evidence should be destroyed after the investigation concludes.16 This represents an important safeguard, and a positive step towards balancing privacy with public policy, but alone will have little impact. If we consider this in the context of the Indonesian phone tapping scandal, it becomes clear that it was not handled in accordance with the recommended reforms.

‘[Phone tapping] is a powerful tool for stemming corruption.’ 1.




5. 6. 7.


Including gems such as “What’s the shortest distance to a pot of money?” and “Can I have two poached eggs and some bacon?” Michaela Whitbourn, ’Memorable Quotes From ICAC Hearings’, The Australian Financial Review (online), 20 May 2013. <http://www.afr. com/p/national/memorable_quotes_from_the_icac_hearings_ qYtw1uESQ3ywr47RX9WrPL> ‘Indonesian president Susilo Bambang Yudhoyono tweets displeasure at spying revelations’, ABC (online), 19 November 2013 <>. The Guardian, The Slides That Show Australian attempts to monitor Yudhoyono’s phone (18 November 2013) The Guardian <http://>. Peter Alford Ben Packham, ‘Tony Abbott vows no apology over spying activities in Indonesia’, The Australian (http:// Canadian Charter of Rights and Freedoms (1982) s 8. Criminal Law Convention on Corruption, opened for signature 27 January 1999, CETS No 173 (entered into force 1 July 2002). David Hume and George Williams (2006) ‘Who’s Listening?: Intercepting The Telephone Calls, Emails And SMS’s Of Innocent People’, 31 Alternative L.J. 211, 213. Telecommunications (Interception and Access) Act 1979 (Cth) s 46(1).

9. 10. 11. 12. 13. 14.

15. 16. 17. 18. 19.

20. 21.

Telecommunications (Interception and Access) Act 1979 (Cth), s39. Ibid, s 46(1)d)i) Ibid, s 46(1)d) ii) Above n 8, 215. Crimes Act 1914 (Cth) s 3ZQR(2), s3ZQR (4). ‘Comprehensive revision of the Telecommunications (Interception and Access) Act 1979 (the Act)’ Senate and Legal and Consitutional Affairs Committee (online) < Business/Committees/Senate/Legal_and_Constitutional_Affairs/ Comprehensive_revision_of_TIA_Act/Terms_of_Reference>. Australian Law Reform Commission, For Your Information: Australian Privacy Law and Practice, Report No 108 (2008). Ibid, Rec 73-2. Above n 3. Telecommunications (Interception and Access) Act 1979 (Cth) s 11(c), s 4(b). Greg Sheridan, ‘Kevin Rudd made right call on tapping Indonesian first lady’s phone’, The Australian (online), (Dec 14 2013) <> Ibid. Lenore Taylor, ‘Australia’s spy agencies targeted Indonesian president’s mobile phone,’ The Guardian (online), (Nov 18 2013) <http://>



aspire. contribute. thrive.

Florian Raviot 2012

Don’t Let a Bottle of Wine Get You Down Corruption and the ICAC – A Trial by the Media ALEXANDER CASANOVA questions the way in which the ICAC exposes political corruption, and how a bottle of wine can do so much damage.

‘New South Wales has become our nation’s corruption capital.’ Premiers and countless Ministers and officials and yet corruption is still endemic. The ICAC is, by its design, an investigative body.1 It does not have the power to prosecute. Its recommendations and findings are important, yet the trial-by-media aspect has become a damaging consequence for many of its ‘subjects’. The debate centres around the question - how public should these investigations be? The ICAC is legally bound to ensure that the ‘protection of the public interest and the prevention of breaches of public trust’ are of paramount concern during its investigations.2 Politicians and public officials, by their very nature, are subjects of public observation. Electors and taxpayers expect those in public office to uphold a level of trust to which their duty to society requires them to. With this in mind, it becomes apparent that this duty to society requires a level of transparency. Transparency of investigations ensure, as emphasised by Premier Greiner prior to the ICAC’s introduction, trust and legitimacy for the government.3 The media facilitates this transparency by closely reporting allegations and investigations. Professor Adam Graycar, of the Australian National University, said ‘If you’re going to have an anticorruption commission, you don’t want it to go behind closed doors’.4 If we consider the recent resignation of Premier Barry O’Farrell we can see the power dynamic between the ICAC and the media. According to Professor Anne Twomey, from the University of Sydney, the ICAC is most effective when it acts as a deterrent to others who have seen the impact it has on the reputations of politicians.5 The ICAC’s powers are diverse, but its responses are limited. While they can make recommendations to prosecute or otherwise penalise those found to be corrupt, agencies are not obliged follow or uphold

the recommendations.6 Significantly, O’Farrell’s resignation was of his own accord as a result of an ICAC investigation, but not a recommendation. The ICAC investigation in question dealt with the corrupt dealings of Australian Water Holdings CEO and Liberal Party fund-raiser Nick Di Girolamo and his connections to politicians from both the previous NSW Labor government and current Liberal government. This web of corruption allegedly included the former Premier who is said to have received a bottle of Penfold’s 1959 Grange – matching his birth year and valued at $3000. O’Farrell’s downfall was not a consequence of being found to be corrupt, or admitting to corruption, but rather a ‘massive memory fail’.7 But why is this the case? The ICAC had not concluded that O’Farrell was necessarily corrupt, and the media only further alleged

‘Transparency of investigations ensure... trust and legitimacy for the government.’ corruption. The ICAC was established to instil confidence and trust in the public office. The indiscretions of officials, including O’Farrell, brought to light by the ICAC demonstrates his questionable behaviour, albeit it was only his failure to declare a gift. The ICAC’s findings may not lead to a prosecution of O’Farrell, or Di Girolamo, but it is the hope that the damaging nature of the ICAC to the reputations of public officials, in conjunction with media coverage of its processes and findings, will somehow lead to a government free of corruption. 1. 2. 3. 4. 5. 6. 7.


Independent Commission Against Corruption Act 1988 (NSW) s 13(1). Independent Commission Against Corruption Act 1988 (NSW) s 12. New South Wales, Parliamentary Debates, Legislative Assembly, 26 May 1988, 672-78 (Nick Greiner). Michaela Whitbourne, ‘ICAC under threat of being silenced’ (April 19, 2014), The Sydney Morning Herald <>. Ibid. Independent Commission Against Corruption Act 1988 (NSW), ss5, 5A. Australian Broadcasting Corporation, ‘NSW Premier Barry O’Farrell To Resign Over ‘Massive Memory Fail’ At ICAC,’ ABC (Online), 17 April 2014. <>



e all love a good political scandal. Stories of “who’s sleeping with who?’ and ‘who’s snorting what?’ litter our news headlines and lead to spectacular falls from grace. The media crafts a comedic tale of poor, unsuspecting politicians and then we laugh – and perhaps cry – as we begin to remember that we might have voted for them. Corruption seems to be the flavour of the month - it’s dirty, it’s secret and involves enormous amounts of money, or perhaps even a bottle of Grange. New South Wales has become our nation’s corruption capital. The Independent Commission Against Corruption (ICAC) has already claimed the political lives of two State

Naparazzi 2014


Jena Sthitaprajna 2011

Building a New India Breaking Free of Corruption

Following one of the world’s longest ever elections, Indians have chosen a new leader to shape their nation’s future. HEMANT VIJAYKUMAR examines the prevalence of ingrained corruption in India to highlight the potential of the recent election to redress decades of exploitation.




he largest democratic election in the world has concluded. Between 7 April 2014 and May 16th 2014, India’s millionaires alongside villagers and slum dwellers united in choosing a government. With approximately 800 million Indian citizens casting their ballot paper over 5 weeks, one can only marvel at the enormity of such an event.1 But one must also marvel at the venality of India’s politicians.2 A country tainted with political graft and financial fraud, it is no wonder The Economist has labeled India ‘the Bad Boom’.3 Corruption has played a significant role in the country’s governance, bureaucracy, social development and culture throughout its history. The complexity of government policies, their weak implementation and the lack of effective enforcement are some of the reasons why corruption is still prevalent in 21st century India. A recent poll conducted by The Economist found that 96% of Indians felt that corruption was holding their country back and 92% thought that it had worsened in the past five years.4 So, if nearly all Indians believe that corruption is widespread, why has nothing been done? Corruption is an age-old phenomenon that connotes the destruction, spoiling or damaging a society or nation. Ultimately, a lack of altruism and greed are at the core of corruption. As this trickles down to the general population, it results in an overriding disregard for honesty and integrity, contrary to the rule of law. Corruption concerns not only woeful cases of governmental graft for private benefit. It transcends and includes situations where procedural defects lead to ordinary people receiving bribes to perform work. When the legislative arm of government fails to curb corruption, ordinary people lose faith in the system. It becomes a kleptocracy, literally meaning ‘society “rule(d) by thieves”’.5

The first high profile scandal following India’s independence was arguably the “Jeep Scam” in 1948. The then High Commissioner V.K Krishna Menon entered into a deal with a foreign firm to procure Jeeps for an army operation in Kashmir without following protocol. Instead of initiating a judicial inquiry into the matter, the government closed the case. Union Minister G.B. Pant wryly commented that ‘as far as Government was concerned, it has made up its mind to close the matter. If the opposition was not satisfied they can make it an election issue.’6 Perhaps one reason why corruption is so prevalent in contemporary India is the fact that it is deeply rooted in the nation’s history. Over several decades, corruption became institutionalised, in particular during Prime Minister Indira Gandhi’s regime, between 1966 and 1977. In 1971, in a case later known as the “Nagarwala scandal”, Rustom Suhrab Nagarwala impersonated the Prime Minister and convinced the Chief Cashier of the State Bank, Ved Prakash Malhotra, to pay six million rupees from the State Bank of India to Nagarwala. Why he wanted the money is still not known and unsurprisingly, affiliations with the PM were contented. Futher, in letters that he wrote before dying, Nagarwala stated that he wanted to reveal the extent of corruption in India, and that his actions would be a ‘great eye opener for the nation’.7 The World Bank estimates that between $1 – 1.6 trillion is lost globally due to corruption each year.8 It worsens the disparity of economic inequality and discourages business investment. The Economist states that ‘a fall in investment from 17% of GDP in 2007 to 11% in 2011 is one reason why GDP growth [in India] has slumped to 5%’.9 Corruption fractures the relationship between companies and states and distorts national and

Pictures from a traveller 2011

‘[Corruption] worsens the disparity of economic inequality and discourages business investment.’ Transparency India conducted an analysis that identified the gap was of most concern in the area of whistleblower protection.11 The vulnerability of whistleblowers is seen, for example, in the 2003 murder of Sri Satyendra Dubey, who exposed corruption in the National Highway Authority. Currently, the Central Vigilance Commission receives allegations of corruption and takes action against people who leak whistleblowers confidential information. However, the public demands more effective measures. A legislative requirement would enhance protection and accountability whilst affording greater penalties for contravention. Current statutes that aim to prevent corruption include the Prevention of Corruption Act 1988, the Prevention of Money Laundering Act 2002, the Indian Penal Code 1860 and the Right to Information Act 2005. Collectively, they aim to reduce corruption, however, the procedural requirements are often complex and require certification from other institutions affected by corruption. The system is therefore inherently flawed. A further step towards increasing transparency and the rule of law is illustrated through principles of the United Nations Convention Against Corruption (UNCAC) and the United Nations Convention Against Transnational Organised Crime (UNCTOC), which India ratified in May 2011. For India, the recent election has demonstrated a positive move away from corruption. The Bharatiya Janata Party’s Narendra Modi swept to victory claiming 282 seats in a 543 seat lower house of Parliament. His transition in the top job ends India’s oldest political dynasty (The Congress Party) of which only 44 seats were won. To a large degree this reflects India’s change in ethos and optimism for a corrupt-free India. However, Modi does not come without his flaws. Modi’s history of Hindu backlash with Muslims in 2002



international trade. It undermines government services and subjects the disadvantage to further weakness. In addition, corruption increases criminal activities such as money laundering, extortion and encourages black market trading including drug trafficking and prostitution. Consequentially, the police force is most prone to corruption in India. The ignorance of procedural fairness and lack of recognition of arguable cases are two methods utilised by the force to demand bribes. Police recruitment in particular is influenced by nepotism and bribery. Ministers previously held the power to grant and transfer promotions over police chiefs and executives. However, in 2006, the Indian Police Service (IPS) gained independence from political control. This move was crucial in eliminating nepotism in the police force.10 The effectiveness of the IPS was seen in 2007 in Uttar Pradesh where an inquiry led to the dismissal of 10,000 officers. Following the numerous allegations of corruption which have shaken India’s political foundations, the Jan Lokpal bill was drafted, which proposes the appointment of an independent body (Lokpal) that would investigate corrupt dealings. Somewhat similar to our own Independent Commission Against Corruption (ICAC), the Bill will provide protection for victimised whistleblowers whilst ensuring that investigations are carried out efficiently and fairly. Moreover, judges, citizens, and independent authorities will elect Lokpal staff. This will enhance the transparency of the selection process and avoid corrupt politician involvement. However, after eight unsuccessful attempts over the last five decades the Lokpal Bill is demonstrative of the reluctant political desire in the country. Notwithstanding the above, numerous attempts to adopt a legislative framework that closes the gap between policy and practice have not been implemented.

UNDP 2014



‘The complexity of government policies, their weak implementation and the lack of effective enforcement are some of the reasons why corruption is still prevalent in 21st century India.’

is certainly not forgotten.12 Despite the court finding him “not guilty”, it was alleged that Modi played a role in slaughtering thousands of Muslims in what ostensibly was a revenge attack for the killing of several Hindu pilgrims. Further, Modi initiated and planned a march on a holy site at Ayodhya in 1990 which arguably resulted in 2,000 Muslim deaths.13 He frequently refuses to mention his past and unwillingly demonstrates remorse. The continual reluctance results in religious disparity and nurtures sectarianism fueling civil conflict. But despite his odious past, Modi presents an opportunity for India to be governed independently and fairly. Backed by a number of business elites, the leader is more reliable than a government led by Congress. Yet, The Economist is not convinced and states that ‘he should be judged on his record - which is that of a man who is still associated with a sectarian hatred’.14 To this end, the key qualities of honesty and integrity are fundamental to ending corruption, not only in India but across the world. India’s population blessed with colourful festivities, rich tradition and passionate people, it is hoped that Narendra Modi will guide the country to an era free of corruption.


2. 3.

4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14.

‘Can anyone stop Narendra Modi?’, The Economist (online) 5 April 2014 < leaders/21600106-he-will-probably-become-indias-next-primeminister-does-not-mean-he-should-be-can-anyone> . Ibid. ‘Fighting Corruption in India: A Bad Boom’, The Economist (online) 15 March 2014 < briefing/21598967-graft-india-damaging-economy-countryneeds-get-serious-about-dealing-it>. Ibid. Social Issues India, ‘Understanding Corruption in India: Promoting Transparency’ (2011) 1, 6 <http://socialissuesindia.>. Ibid 4. S.K. Aggarwal, Investigative Journalism in India (Mittal Publications, 1st Ed, 1990), 11. Ibid 6. Above n 3, 2. Above n 5, 16. Ibid. Above n 1, 2. Ibid. Ibid.

A Brief History of Corruption I

n recent times Royal Commissions have been making headlines around Australia. Most notable have been the inquiries into Institutional Responses to Child Sexual Abuse, the Inquiry into the Home Insulation Program and the Royal Commission into Trade Union Corruption. Royal Commissions however have been investigating corruption in this country since Federation. Australia has had a long history of crime and corruption at various levels of government, unions and public bodies, all exposed through these investigations. A look back on some commission inquiries reveals how far we have come in tackling areas of violence, drugs, bribery and corrupt dealings in our country’s institutions. The nature of Royal Commissions is such that they possess expansive powers of investigation into numerous areas. The first Royal Commission held in Australia took place after the enactment of the Royal Commissions Act 1902 (Cth), one of 59 statutes enacted by the first parliament of the Commonwealth.1 This Royal Commission was appointed to inquire and report on the arrangements made for the transport of troops returning from service in the Boer War in South Africa in the S.S “Drayton Grange” in 1902. This first inquiry paved the way for further Royal Commissions, giving them wider powers to investigate any and all matters they were charged with.2 The inquiries from this point were varied in their subject matter; from the inquiry into the butter industry3 and the postal service,4 to commissions that reflect the fears of its time.5 However the inquiries that truly capture our interests seem to be those about criminal activity and corruption. The first of these were the Royal Commission into Fatalities at Bundaberg in 1928, and the Royal Commission appointed to inquire into statements in the press regarding offers alleged to have been made to members to resign seats in the Federal Parliament in 1928. Royal Commissions began to heat up between the sixties and eighties with the spate of inquiries into the areas of illegal gambling,6 drug trafficking,7 alleged telephone interceptions8 and the criminal activity of the Ship Painters and Dockers Union.9 The inquiry of the Ship painters and Dockers Union, which was one of the first major investigations into gangland activity and union corruption in Australia, was also one of the most notorious. In 1980 Frank Costigan QC was appointed as Royal Commissioner to inquire into the affairs of the Federated Ship Painters and Dockers Union after the Fraser Government received numerous reports from public servants and ministers about criminal incidents involving the Painters and Dockers Union.10 These reports included murder, stand-over tactics, bribery and a long list of mysterious disappearances. The allegations levelled against government employees ranged from the recruitment of criminals, payments for

absentee employees, theft, violence and compensation fraud at the Navy dockyards as well as the involvement of the Australian National Line crews and facilities in theft and drugs. However the investigations were fraught with problems, primarily due to the lack of cooperation by the Painters and Dockers Union and the wall of silence that has become a familiar trait of gangland crime. However Costigan produced five interim reports to the government between 1982 and 1983, which dealt with the administration and criminal activities of the Union, union tax evasion, ‘bottom of the harbour’ tax evasion schemes and a major criminal scheme involving the company Hamidan Limited. Only parts of the reports were made public while the rest were kept confidential, as not to jeopardise pending and future prosecutions. Evidence from this inquiry helped with the Stewart Royal Commission on the Terence Clark drug syndicate and the Nugan Hand Bank from 1983 to 1985.11 During the nineties Royal Commissions investigated areas of corruption in our institutions, their procedures and the faults in the system. The shocking treatment of Indigenous Australians was exposed through the Royal Commission into Aboriginal Deaths in Custody (19871991), which studied and reported on the high numbers of Indigenous Australians who had died whilst in custody after arrest or conviction by suicide, natural causes, medical problems or injuries caused by police. This Commission highlighted the problems within the justice system in relation to the custody of Aborigines, which in turn brought to light corrupt practices in the Australian police force and more importantly made these issues public knowledge.12 With the present spate of new Royal Commissions currently underway it is remarkable to see the striking similarity in the issues previously investigated. This likeness leads one to question ‘is the history of Union corruption, gangland violence and institutional cover-ups repeating itself ?’ Perhaps so. But in any event the hope is that the current Royal Commissions can bring these issues of corruption to light and invariably find ways to bring them to an end. 1. 2. 3. 4. 5. 6.

7. 8. 9. 10. 11. 12.

Australian Law Reform Commission, ‘Royal Commissions and Official Inquiries’, (2009), Discussion Paper 75, 30 < default/files/pdfs/publications/DP75.pdf>. Ibid. Royal Commission on the Butter Industry (1904-1905). Royal Commission on Postal Services (1908–1910). Royal Commission on Espionage (1954–1955). Royal Commission on alleged improper practices and improper refusal to co-operate with the Victoria Police Force on the part of persons employed in the Postmaster-General’s Department in Victoria in relation to illegal gambling (1962–1963). Royal Commission of Inquiry into Drug Trafficking (1981–1983). Royal Commission of inquiry into alleged telephone interceptions (1985–1986). Royal Commission on the activities of the Federated Ship Painters and Dockers Union (1980–1984). National Archives of Australia, Organised Crime, (2014) <http://www.naa.>. Ibid. Indigenous Law Resources Reconciliation and Social Justice Library, Royal Commission into Aboriginal Deaths in Custody, National Report Volume 1, (1991) < vol1/1.html>.



CLAIRE ROBINSON reflects on the corruption exposed by Australian Royal Commissions to highlight how far we have progressed as a nation, and how far we have to go.

Fair or Fake? A snapshot of sham contracting in Australia The Fair Work Act 2009 (Cth) makes it illegal for employers to avoid paying employee benefits by disguising workers as independent contractors. JAMESINA MCLEOD explores the practice of sham contracting and how employers are using it in spite of legislation.




he exploitation of individuals to further profit margins in the marketplace is hardly new. It is apparent that expedient, innovative business practices unfortunately do not always coincide with the best interest of workers – often the opposite is true. The rationale underlying employment law recognises this sometimes uncomfortable arrangement and seeks to ameliorate inequalities in bargaining power for workers whilst maintaining an employer’s prerogative to run their business however they see fit. For the most part, the protections provided by the Fair Work Act 2009 (Cth) work. But if you’re a labourer, hair stylist, cleaner or call centre operator, chances are you’ve fallen through the gaps in an instance of ‘sham contracting’.

balance of independent contractors was once comprised of professionals like doctors, accountants and lawyers, the majority now tend to be cleaners, construction and maintenance workers, delivery drivers and beauticians.6 These vocations are usually typified by a culturally and linguistically diverse,7 low paid demographic8 with little to no bargaining power with employers. Poor English, age, limited finances or unforgiving work environments which prevent access to union protection or loss of opportunities to seek alternative employment all add up to a lack of independence that true contractors would normally enjoy.9 Instead, individuals are engaged in insecure work with less formal training and lower work place safety standards.10

THE WELL-HIDDEN PROBLEM Sham contracting refers to the practice of hiring workers who are treated as contractors despite having the true qualities of employees.1 While the distinction between employees and independent contractors has never been unequivocally clear, it remains foundational to our conceptualisation of employment law2 and the resulting rights and protections it offers. Sham contracts are usually the result of either incompetent or clever contract drafting: either an employer intends to hire you as a contractor but has improperly set up an arrangement that makes you resemble an employee or, less excusably, they have deliberately attempted to disguise true employees as those providing independent services.3 The incentive for employers to wilfully engage in miscategorising their workers is mercenary – independent contractors do not enjoy the unfair dismissal protections, standard working hours or leave entitlements that employees do under the National Employment Standards.4 It’s a concerning and growing issue in Australia – union reports estimate 26-46% of all contractors in the construction industry, for example, are in fact employees,5 and particularly vulnerable ones too. Though the

A RECENT EXAMPLE Fair Work Ombudsman v Maclean Bay11

In 2012, the Federal Court dealt with a notably wilful case of sham contracting in Fair Work Ombudsman v Maclean Bay.12 Decided under the predecessor of the Fair Work Act 2009 (Cth),13 Marshall J found the husband and wife operators of a Tasmanian island resort to be particularly ‘tawdry and disturbing’14 in their attempts to fire their employees in order to rehire them as independent contractors. Receptionists, gardeners and general labourers were told to obtain ABN numbers and, if they didn’t comply, had their casual employment contracts terminated without notice or reasonable grounds. The resort was owned by Mr Wells and substantially run by his wife, a former lawyer who had been struck off the roll for lying to a judge. Evidence was adduced that Mrs Wells had told staff she did not want to worry about paying them superannuation or payroll tax and that Mr Wells thought independent contractors made better workers. Marshall J’s colourful summations of the parties (Mrs Wells ‘did nothing … to enhance her standing to be re-admitted as a legal practitioner…’ by failing to give evidence at trial and firing her receptionist for not being

‘Sham contracts are usually the result of either incompetent or clever contract drafting: either an employer intends to hire you as a contractor but has improperly set up an arrangement that makes you resemble an employee or, less excusably, they have deliberately attempted to disguise true employees as those providing independent services.’

‘The incentive for employers to wilfully engage in miscategorising their workers is mercenary...’


Sham contracting is expressly forbidden and punishable under sections 357 to 359 of the Fair Work Act.19 To be liable for civil penalty, an employer must know or be reckless as to whether the contract for services should have been one of employment.20 Employers can easily, however, invoke the defence that they did not realise nor were they reckless to the possibility that the contract was wrongly framed.21 Though there is a ‘reverse onus of proof ’ requiring the employer to adduce evidence that the sham arrangement was not wilful,22 the fact that none of the successful proceedings cited attempted to plead the defence does nothing to allay concerns that, if invoked, the defence threshold would be easily satisfied on the balance of probabilities. By contrast, if proceedings are successfully brought against a sham contract employer, recent Federal Court cases indicate an assertive attitude in applying civil penalties. An example is found in an airport shuttle company that wilfully miscategorised six of its 22 drivers as independent contractors. The court ordered hefty fines against the corporation as well as its director.23 A further deterrent may be observed in the Court’s ruling that no reduction in penalty is warranted if an individual’s (e.g. a

director’s) behaviour renders them as morally culpable as the company they control.24 Without clearer statutory definitions of key terms such as ‘employer’, ‘employee’ and ‘employment’, however, difficulties in identifying and prosecuting sham contractors will continue to exist. The current provisions are too expansively drafted to properly identify these sham contracts. Substantive revision is needed to ensure employers are acting in good faith, rather than at the expense of workers’ rights.

‘Without clearer statutory definitions of key terms such as ‘employer’, ‘employee’ and ‘employment’, however, difficulties in identifying and prosecuting sham contractors will continue to exist.’ 1. 2. 3. 4. 5. 6. 7.

8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24.

Cameron Roles and Andrew Stewart, ‘The Reach of Labour Regulation: Tackling Sham Contracting’ (2012) 25 Australian Journal of Labour Law 259. Ibid. Ibid. Ibid 268. See also Fair Work Ombudsman v Maclean Bay Pty Ltd (2012) 200 FCR 57; Fair Work Ombudsman v Centennial Financial Services (2010) 245 FLR 242; Vabu v Federal Commissioner of Taxation (1996) 33 ATR 537. Australian Council of Trade Unions, ‘Independent Inquiry into Insecure Work: Lives on Hold Unlocking the Potential of Australia’s Workforce’ (2012) 29. Chrys Gunasekara, ‘Independent Contracting in Low Skilled, Low Paid Work in Australia’ (2011) 19 International Journal of Employment Studies 1, 51. TNS Social Research, ‘FWBC Response to Working Arrangements in the Building and Construction Industry – further research resulting from the 2011 Sham Contracting Inquiry’, Australian Government Canberra, 2012, 2. Gunasekara above n 6. Roles and Stewart above n 4. Ibid. [2012] FCA 10. Ibid. Workplace Relations Act 1996 (Cth). Fair Work Ombudsman v Maclean Bay [2012] FCA 10 at [116]. Fair Work Ombudsman v Maclean Bay [2012] FCA 10 at [24] (2001) 207 CLR 21 (1996) ATR 537 Vabu v Federal Commissioner of Taxation (1996) 33 ATR 537; Hollis v Vabu Pty Ltd (2001) 207 CLR 21. Fair Work Act 2009 (Cth). Fair Work Act 2009 (Cth) ss 357(2)(a), (b) and 359. Ibid. Fair Work Act 2009 (Cth) s 361 (which contains a statutory presumption applying to all “general protections” prosecutions”). Fair Work Ombudsman v Happy Cabby Pty Ltd & Anor [2013] FCCA 397. Driver J fined the company $238, 920.00 and the sole director $47 784. Fair Work Ombudsman v Ramsay Food Processing Pty Ltd (No 2) [2012] FCA 408.



‘a personal person’)15 make light reading of the heavier issue of almost $40,000 owing to the resort’s employees. After making a conclusive finding of deliberate sham contracting, the court ordered the outstanding wages be paid within a month. Other examples are less dramatic and demonstrate that sham contracts, though not always maliciously created, can be difficult to identify because of the fickle nature of distinguishing employees from contractors. In Hollis v Vabu Pty Ltd,16 the court was asked to determine whether bicycle couriers were contractors or employees in a personal injury claim that turned on establishing vicarious liability. Though the court ultimately found the workers were employees, it had previously decided the opposite when faced with almost identical facts in Vabu v Federal Commissioner of Taxation.17 In the absence of a statutory definition of ‘employee’, courts rely on the common law’s multifactorial test, which requires the identification and evaluation of an expansive list of criteria including the employer’s degree of control, whether the employer provides equipment and the method of remuneration.18 Though mostly effective, the potential for inconsistency is ripe because the weight to be attributed to each factor is not as clear.

Nick Kendric 2013

Red Light on the Regulations The Unnecessary Licensing Laws Facing the NSW Sex Industry

Sex may sell, but if you think it naturally imports drugs, rock’n’roll and all sorts of scandal and corrupt dealings then think again. DR PENNY CROFTS details the truly tenuous connection between brothels, crime and corruption to present the proposed introduction of licensing laws in NSW as unnecessary.




edia and politicians often assert a link between crime, corruption and brothels. The NSW Coalition government is proposing to introduce a licensing system for brothels. The aim of licensing would be to stop the use of brothels ‘by organised crime groups and unsuitable persons’, ‘eliminated illegal brothels’, and disrupt and dismantle ‘illegal operations’ and compel compliance by operators.1 However, there is limited evidence of any link between crime, corruption and brothels in NSW. Those problems that do exist are created by the law, rather than something inherently disorderly in brothels. Moreover, the proposed Brothels Licensing Authority (BLA) is unlikely to improve the regulation of brothels in NSW in terms of illegality, amenity and health and safety. A primary assumption underlying the original decriminalisation of the sex industry was that illegality begets crime and corruption. The Wood Royal Commission identified a link between an illegal sex industry and police corruption - the threat of closing brothels led to the potential to demand and receive payment of bribes.2 As a consequence of concerns about corruption and health and safety, brothels have been able to operate as legitimate businesses since 1995. Brothels are regulated by local councils using their planning powers under the Environmental Assessment and Protection Act 1979 (NSW). The planning regime focuses upon land-use and potential amenity impacts – which can include tangible aspects such as noise, lighting, safety, and parking, and intangible issues such as ‘the standard or class of the

neighbourhood, and the reasonable expectations of the neighbourhood’.3 The proposal to introduce a licensing regime rests on the assumption that this would assist in solving problems of illegality. This assumption is not supported by the experience of jurisdictions such as Queensland or Victoria that have licensing regimes. In both Queensland and Victoria there is a large unlicensed industry. For example, in Queensland it is recognised that there is a ‘thriving illegal prostitution sector’,4 and it is estimated that licensed brothels make up only 10% of the state’s sex-work industry.5 If illegality is assumed to be the problem, then in both Victoria and Queensland licensing has not resolved these problems. Rather, licensing has pushed problems of illegality aside, resulting in a twotiered industry, of a heavily regulated legal industry and a thriving illegal industry.


One way of considering the efficacy and necessity of a licensing regime is to consider available evidence of crime and corruption associated with the brothels industry. It is frequently claimed that brothels are criminogenic, that is that they cause crime, whether as victims or perpetrators. However, despite these claims being made since the decriminalisation of the industry in 1995, there is no evidentiary support that brothels are criminogenic. Historically, when brothels were regarded as inherently disorderly and not able to operate lawfully, there was reason to associate these types of businesses with organised crime. However, with decriminalisation,

‘…just under three quarters of the residents surveyed either experienced no effects as a consequence of the nearby brothel or did not know of its existence…’


Another issue that the government has identified is corruption. There have been two ICAC inquiries into corruption involving the sex industry and local councils. In 2007, ICAC investigated Wade Fryar, Team Leader of Compliance at Parramatta City Council (PCC). It was found that he had corruptly solicited and received up to $40,000 in cash payments and sex services from brothel owners and at least five sex workers in return for not taking action on behalf of PCC to prevent unauthorised use of premises for prostitution. Fryar also warned sex workers and owners of impending inspections by council.7 In 2011, ICAC investigated Edward Karkowski, a building manager with Willoughby City Council, and found that he had corruptly exercised his official function to favour various business owners in return for benefits such as cash, gifts, free meals, and free massages and sex services.8 Whilst the media focused on the link between brothels and corruption, the bulk of Karkowski’s corruption was associated with businesses that did not provide sex services. For example, he received gift vouchers and lunches from an office developer,9 free meals and gifts from restaurants, and free hospitality from a car wash in return for assistance, or claiming that he could provide assistance. Both ICAC reports indicate that the problems of corruption are not specific to, or primarily associated with, brothels. Rather the focus of both reports was upon council process and regulation. ICAC recommended reforms to council processes including supervision and monitoring of council employees. Accordingly, the limited evidence of corruption associated with the sex industry suggests that the issue lies not with the sex industry, but rather with procedural and substantive issues in the exercise of council planning powers.

Amenity, health and safety, and the effect of the market

Licensing schemes tend to focus on issues of crime and corruption, but there are other aspects of businesses that also require attention, including amenity impacts, and occupation health and safety. Planning can work in terms of ensuring minimal amenity impacts on nearby neighbours. In recent research, we found that just under three quarters of the residents surveyed either experienced no effects as a consequence of the nearby brothel or did not know of its existence, suggesting that brothels have minimal amenity impacts.10 Brothels are not inherently disorderly businesses. Councils can utilise existing strategies such as locational restrictions, policies about size, operating hours, signage, structural approaches and management plans to ensure minimal amenity impacts. If a brothel does impact negatively on amenity impacts, then councils have general powers and powers specific to brothels to respond. Available research also suggests that NSW is engaging in best practices in this area. NSW focuses on sex worker health, rather than whether a business is illegal or legal, although it has been recognised that a legal industry eases ACON and the Health Department access. NSW has one of the lowest rates of sexually transmitted infections in the world.11 There is no evidence that crime and corruption are specific to the sex industry. Although the Coalition Government has promised a licensing authority for brothels in NSW, I strongly recommend that the BLA is not introduced. Upon analysis, there is no evidence that a BLA would add value to the existing planning regime. The current planning regime delivers in terms of reduced amenity impacts and improved occupational health and safety. NSW currently has one of the best regimes for regulating brothels. The current regulatory regime for businesses works. There is nothing inherently criminal or corrupting about the sex industry. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11.

Christopher Hartcher, ‘NSW Libs and Nats to crack down on illegal brothels’ (Press Release, 22 December 2010). New South Wales Legislative Assembly, Debates (20 September 1995) p 1187, Disorderly Houses Amendment Bill, Second Reading Speech, per the Hon P Whelan, Minister for Police. Broad v Brisbane City Council (1986) 59 LGRA 296 at 299 per Thomas J. Crime and Misconduct Commission, Regulating Prostitution: A Follow-up Review of the Prostitution Act 1999 (2011) Qld Government, 19. The University of Queensland TC Beirne School of Law Human Trafficking Working Group, Ten Years of Prostitution Regulation in Queensland (2009). Senior Constable (2009) ‘Police Statement of Evidence Brothel Development Proposal: Huang v Parramatta City Council’, Sydney: NSW Police Force, 5. Ibid, 5. ICAC, Investigation into the Corrupt Conduct of a Willoughby City Council Officer (2011) 6. Ibid, Chapter 3. Jason Prior and Penny Crofts ‘The effects of sex premises on neighbourhoods: residents, local planning and the geographies of a controversial land use’ (2012) 68 New Zealand Geographer 130-140. Donovan B, Harcourt C, Egger S and Fairley C, ‘Improving the health of sex workers in NSW: maintaining success’ (2010) 21(3-4) NSW Public Health Bulletin 74-77.



these historic conditions no longer exist. There is nothing inherently criminogenic about brothels. The granting of legal status imports a right to governmental protection of liberty, safety and property. This means that brothels and their workers and clients are able to turn to the law for protection. In Huang v Parramatta City Council [2009] NSWLEC 1331, the Senior Constable’s Statement of Evidence asserted that an existing authorised brothel near the proposed brothel had been the subject of bikie gang threats accompanied by promises of ‘protection’.6 The officer relied upon this as evidence of the inherent unlawfulness of brothels. In contrast, I regard this as demonstrating an advantage of legal status, albeit in its infant form. Rather than succumbing to bikie gang threats, the brothel owner was able to, and did, report the threats to the police and sought and received protection from existing legal institutions. Accordingly, with the decriminalisation of the sex industry in NSW the historic reasons for an association illegality no longer exist.

The Commonwealth 2011

Shaking Hands With Sri Lanka Obscuring Due Process in the Name of Border Control Australia’s new partnership with Sri Lanka in the pursuit of border control has made waves, and not just because of the boats being turned back under Operation Sovereign Borders. TARYN PRIADKO explores the question - is associating with an allegedly corrupt government ever justified?



The dogged pursuit of Operation Sovereign Borders reached a new height last month, with the Australian Government affirming their stoic partnership with the Sri Lankan Government in the joint pursuit to “stop the boats”. By looking solely through the monochromatic political lens of border security, however, a number of legal and political realities have been obscured. One of these involves the indefinite administrative detention of a small group of Sri Lankan refugees, who are being denied the legal guarantees that have long been recognised as both inherent and integral to the rule of law.

New Highs, New Lows

Outside the days might have been growing colder, but at last months meeting of the Second Joint Working Group on People Smuggling and Transnational Crime, the atmosphere could not have been warmer. The smiling Sri Lankan Defence Secretary, Gotabaya Rajapaksa, shook hands with Immigration and Border Protection Minister, Scott Morrison, and thanked him warmly for the enduring support of the Australian Government.1 As a show of continued commitment to border security, the Australian Government gifted two Bay Class vessels to the Sri Lankan Government to assist in the regional deterrence of people smuggling. Morrison stated that this reinforced cooperation, as an extension of Operation Sovereign Borders, would deliver strong messages that Australia will not resettle anyone who arrives illegally by boat: ‘Under this new policy people who seek to illegally enter Australia by boat will not only never be resettled in Australia but, as a result of our extensive interdiction policies both on land and at sea, undertaken often in cooperation with our regional partners such as Sri Lanka, they will not get here’.2

‘People who seek to illegally enter Australia by boat will...never be resettled in Australia.’ Yet the furtherance of this partnership with the Sri Lankan Government who, according to Morrison, maintains a ‘high level of professionalism’3 has caused the Australian government to turn a blind eye to the troubling accusations of war crimes that continue to plague the Sri Lankan Government. Earlier this year Australia refused to co-sponsor an independent UN Inquiry into the alleged human rights abuses of the Sri Lankan Government, despite extensive evidence that, over the course of the 26-year civil war that ended in May 2009, they had been involved in forced abductions, torture, extrajudicial killings, military land seizures and the oppression of political opposition. Mr Gotabaya Rajapaksa, himself accused of running concentration camps,4 has thanked the Australian Government for their ‘bold’ decision not to support the Independent UN Inquiry, stating that their co-operative pursuit of border protection could not be realised without such solidarity, and without ‘understanding the challenges that Sri Lanka faces due to unsubstantiated and unfounded allegations with bias (sic) attitudes’.5 The Australian Government has simply stated that it believes such investigations should take place by internal mechanisms.6 Yet it is clear that this move is the latest in a series of efforts to cast the flux of maritime movement out of Sri Lanka as the “insidious crime” of people smuggling, rather than the attempts of a persecuted people to flee the country as legitimate refugees. While this stance has had a significant effect on all of those Sri Lankan refugees who have sought protection in Australia,

James Gordon 2011

A Legal Black Hole

It has been said that, following the ‘vicious’ end of the civil war, approximately 140,000 individuals fled Sri Lanka, becoming displaced across 65 countries by 2012.7 Of these, 1,600 found their way to Australia. As ‘unauthorised maritime arrivals’, they were subject to mandatory detention, and processed under the ‘offshore’ refugee determination system.8 The United Nations High Commissioner for Refugees (UNHCR) and the Department of Immigration and Citizenship, have deemed many of the Sri Lankan asylum seekers to have a ‘well founded fear of persecution’ and, as such, to be eligible for protection under the international obligations of the Refugee Convention,9 to which Australia is a signatory. One of the primary obligations of this treaty is the principle of non-refoulement, under which a refugee cannot be returned to a country where they will be subject to persecution. However, in order for a refugee to be granted a Protection Visa in Australia, they must be assessed by the Australian Security Intelligence Organisation (ASIO) as not being ‘directly or indirectly a risk to security’ in Australia.10 Under section 4 of the ASIO Act 1979 (Cth),11 ASIO has traditionally had the authority to assess the status of refugees based on criteria relating to threat of espionage, sabotage, promotion of communal violence and acts of foreign interference. Where a refugee acquired an adverse security assessment, they could not be released into the Australian community. It is therefore as a result of the culmination of these processes that a legitimate refugee, deemed to be a security risk, could be held indefinitely. Under the authority of the landmark High Court decision of Al-Kateb v Goodwin12 in 2004, such administrative detention is deemed to be a lawful exercise of the federal governments power under section 51(xix) of the Australian Constitution (the ‘aliens’ power). Furthermore, the full Federal Court found in Leghaei13

that procedural fairness could be reduced to ‘nothingness’ where disclosure would prejudice national security. The Court was not prepared to impose a minimum degree of disclosure that must always be afforded. As such, a group of 54 Sri Lankan refugees have fallen under this regime since 2009. They have become subject to lawful mandatory detention, with no imminent prospect of release, and with only superficial opportunities for review. At most, they may be made aware of certain allegations during questioning. Thus, while judicial review is technically available, it is practically inaccessible without notification of the grounds of the adverse assessment.14

The M47 Challenge

In October 2012, the High Court deemed the regulations under which ASIO was making its security assessments of refugees invalid. It was held that the provision was inconsistent with the Minister for Immigration’s own statutory powers to exclude refugees that presented a risk to security. Importantly, these powers are based on the security provisions of the Refugee Convention and are therefore subject to review in the Administrative Appeals Tribunal (AAT), as well as to parliamentary scrutiny. Conversely, s 36 of the ASIO Act provides that the procedural fairness provisions do not apply to non-citizens. As a result of the High Court ruling for M47,15 the government, determined to preserve ASIO’s powers of security assessment, introduced the Migration Amendment Bill 2013 (Cth), which makes it a legislative requirement that a refugee must now be assessed by ASIO before being granted a Protection Visa. However it was also announced, in October 2012, that a new Independent Reviewer would be established to conduct an ‘advisory’ review of the security assessment of refugees. While this was a positive move, and while retired Federal Court Judge Margaret Stone has since re-examined a number of assessments, it has been commented that it remains an inadequate response, since ASIO retains the right to uphold their original decision.



it poses a specifically more troubling reality for one small group of Tamil refugees who are currently stuck at a legal, administrative and political crossroads.

Trikinilochchi 2011

‘The desire to maintain strong executive control about immigration decisions [means] the prospects for these refugees remains grim.’ A subsequent High Court challenge, Plaintiff M76,16 has attempted to have the judgment in Al-Kateb overturned, and indefinite administrative detention ruled unlawful. It was not successful, and Al-Kateb remains a current reflection of “good” law.

The Result



While the Coalition government, at the end of 2013, used the cap on Protection Visas to effectually freeze their issuance, the future of both Permanent and Temporary Protection Visas will be determined at the end of this financial year. While this will have important implications for Protection Visa applicants, it will arguably change little for the Sri Lankan refugees that remain barred from application. Undoubtedly, it is true that Australia should be protected from serious foreign security threats, and that the government has the inherent right to expel even legitimate refugees who pose such a threat. The inherent flaw in the current regime remains the lack of procedural fairness that denies refugees the right to know the substance of the case against them, to respond to it, and to seek meaningful review either administratively or judicially. This is especially so since the UNHCR, in deeming these individuals as refugees, made a finding that they posed no threat that would make them ineligible for protection. A number of commentators have proposed ways to achieve a balance in the preservation of individual rights and national security.17 One such method is the appointment of Special Advocates, a move that is already underway in other common law nations such as Canada and the UK.18 However, with the latest re-affirmation of Australia and Sri Lanka’s ties, and the desire to maintain strong executive control about immigration decisions, the prospects for these refugees remains grim. Arguably, it is only by affirmative judicial activism that their situation will change. Many believe that the decision in Al-Kateb will never be overturned. For now, it seems, we can only look to the Courts and hope.



3. 4. 5.


7. 8. 9. 10. 11. 12. 13. 14. 15. 16.


Sunili Govinnage, ‘Australian Silence on Human Rights is our Gift to Sri Lanka’, The Guardian (online), 8 May 2014, <http://www.>. Scott Morrison, ‘Address on people-smuggling and transnational crime’ (Speech delivered to the 2nd Australia-Sri Lanka Joint Working Group, The Hyatt Hotel Canberra, 22 April 2014) <http://> Ibid. Above n 1. High Commission of Sri Lanka, ‘Visit to Australia,’ (April 30 2014) High Commission Of Sri Lanka Website <http://www.slhcaust. org/visit-to-australia-by-mr-gotabaya-rajapaksa-secretary-ministryof-defence-and-urban-development-to-co-chair-at-the-second-jointworking-group-on-human-smuggling-and-other-trans-nationalcrime-21st/>. Sarah Whyte, ‘Sri Lanka Thanks Australia for its ‘bold’ decision’, The Sydney Morning Herald, (May 6 2014), < au/federal-politics/political-news/sri-lanka-thanks-australia-for-itsbold-decision-20140506-zr5n9.html#ixzz316TJz4E7>. Ben Saul, ‘Dark Justice: Australia’s Indefinite Detention of Refugees on Security Grounds under International Human Rights Law’ (14 April 2012) 13 Melbourne Journal of International Law 68. United Nations Convention Relating to the Status of Refugees, opened for signature 28 July 1951, UNGA 2198 (XXI) (entered into force 22 April 1954). Migration Regulations 1994, Schedule 4, Public Interest Criteria, 4002; Migration Act 1958 (Cth), s 65(1). Australian Security Intelligence Organisation Act 1979 (Cth), s 4. Al-Kateb v Goodwin [2004] HCA 37. Leghaei v Director General of Security [2005] FCA 1576. Ben Saul ‘Fair Shake of the Sauce Bottle: Fairer ASIO security assessments of refugees’, 37 Alternative L.J. 221 (2012). M47/2012 v Director General of Security [2012] HCA. M76/2013 v Minister for Immigration and Citizenship and Ors [2013] HCA 53. See, for example, proposed Greens Bill in October 2012, Migration and Security Legislation Amendment (Review of Security Assessments) Bill 2012 (Cth); Australian Human Rights Commission, Submission to Independent Review of the Intelligence Community, April 2011; United Nations High Commissioner for Refugees, ‘Expert Roundtable on National Security Assessments for Refugees, Asylum Seekers and Stateless Persons in Australia’ (Chair’s Summary, 3 May 2012). Above n 14.


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Q&A With Kate McClymont TFB brings you an exclusive interview with the eminent authority on corruption in Australian politics, Sydney Morning Herald (SMH) Investigative Journalist KATE McCLYMONT. Join us as we delve into Kate’s work and the nexus between the media and political corruption, to learn that corruption can lurk in the least likely of places.

Profile Name: Kate McClymont Snapshot: Investigative Journalist and Crime Reporter for the SMH, Kate has broken some of the most highly publicised stories about crime and corruption in Australian politics and society, including the Bulldogs salary cap scandal. As well as being one of the most decorated journalists in Australia she is also one of the most trusted, and it was in Kate that the late businessman Michael McGurk confided that he feared for his life a week before his death. Most recently having covered the ICAC Inquiries, Operations Credo and Spicer, and co-authoring the forthcoming book He Who Must be Obeid, we can only wonder what story Kate will cover next! Follow Kate on Twitter at @Kate_McClymont to hear breaking news coverage on dodgy dealings, crime and Australia’s underbelly.


30 Based on your recent experiences reporting on the ICAC inquiries and your career as an investigative journalist, do you think that Australian politics is fraught with corruption? Why or why not? Australian politics is riddled with corruption perhaps not to the extent of Third World countries, but there is an abundance, nevertheless. Possibly the most corrupt level of politics is Local government. This is where buying a local councillor a Honda Civic worth $40,000 can get you an extra five floors on your development that could be worth millions of dollars. Because the councilors tend to vote as a block – ie Liberal and Labor – you only need to convince the dominant person in that block and you can have the support of the whole team for your proposal.

Operations Credo and Spicer have focused the Australian conscious on lobbyists and their role as the link between private and public interests. What measures do you think could be put into place to decrease subversive dealings and increase transparency in the lobbying process? For every regulation you put in place, someone will find a way to subvert it. For instance, at the moment you have to register to be a lobbyist. But there are people who claim that they are offering “corporate relations” advice and therefore don’t count themselves as lobbyists. It seems unfair that you have to pay someone, usually a former political staffer, for what is merely access to those in power.

‘It seems unfair that you have to pay someone, usually a former political staffer, for what is merely access to those in power.’

‘…keep an open mind in future when people bring you stories that you are tempted to dismiss because “so-and-so would never do that.”’

The way that individuals, especially politicians, accused of corrupt conduct are portrayed in the media significantly impacts their reputation. What guidelines or protections are in place to protect these people from damage to their reputations, and is this enough? Alternatively, are these guidelines or protections too strict? There are defamation laws in place to protect the reputations of politicians who feel they might have been unfairly labelled corrupt. With regard to the ICAC, there are confidential hearings that take place in camera before any public hearings occur. This gives investigators a pretty good idea where corruption lies before allegations are aired in public. A corruption inquiry does not have the same rules of evidence as a court of law and therefore the Commissioner or counsel assisting the commission can make declarations effectively clearing people as the hearing progresses. For instance, in the recent hearings Geoffrey Watson, SC, has made it clear that no allegations of corruption have been made against certain politicians when their names might be mentioned in passing. You have investigated many high profile cases involving criminal and corrupt conduct. Which story has stuck with you the most, and why? One of the stories that stuck with me was the arrest and subsequent jailing of a contact of mine. I can remember I was about to be interviewed on radio and I was put on hold for a breaking story. It was June 2008, and Mark Standen, the assistant director of the NSW Crime Commission, had just been arrested for conspiring to import 300kg of

pseudoephedrine, which is used to make speed and ice. I could hardly think straight. Standen, one of the most senior law enforcement officers in the land, seemed the least likely person to have done this. In 2011 he was sentenced to 22 years jail, 16 years non-parole, and he will have to spend most of it I protection because his former career as a policeman would make him a high profile target. His arrest and convictions made me realise that even the most unlikely people are capable of great corruption and to keep an open mind in future when people bring you stories that you are tempted to dismiss because “so-and-so would never do that.” What measures are in place to protect journalists who expose corruption? None. Thomas Jefferson said ‘the most truthful part of a newspaper is the advertisements’. Is this often made assumption in relation to the untruthful and sensational nature of reporting at all true? Generally speaking there are media organisations, especially British tabloids or gossip magazines, which are renowned for their sensationalism and exaggerations. But other publications, such as the Sydney Morning Herald and the ABC, are reliant on their reputations for accurate and reliable journalism to maintain sales. What is the role of journalists in exposing corruption and maintaining an ethical society? The famous quotation: ‘All that is necessary for the triumph of evil over good is for good men to do nothing’ is one all journalists should live by. Corruption flourishes when journalists lack the courage to do the story.



It would be beneficial if there were a register kept of meetings, calls, submissions etc, which accurately record lobbyists contacts with ministers, their staff or departmental executives.

Imagining Integrity Following numerous allegations of corruption against state government officials, there have been calls to establish a Federal anti-corruption commission. MATTHEW PAGE explores the potential scope of such an organisation within our existing anti-corruption framework.




n May 7, Greens leader Christopher Milne called for a ‘clean up [of] politics right around the country’.1 As recent headlines have illustrated, the New South Wales (NSW) Independent Commission Against Corruption (ICAC), among other state anticorruption bodies, has been doing just that. However, the Commonwealth has remained sedentary in this regard. Aside from the Australian Commission for Law Enforcement Integrity, no body exists to scrutinise allegations of corruption within the federal public service.2 The Commonwealth Ombudsman is able to scrutinise Commonwealth departments, yet, its role does not extend to investigating corruption allegations.3 One might reasonably comprehend the absence of a regulatory body if corruption was a vice exclusive to the states and police. Yet, that is not the case. Recent allegations against Arthur Sinodinos attest to this, as do the less contemporaneous scandals of the AWB and the Reserve Bank.4 Nevertheless, if we put the debate to one side, another question arises: what should a federal anti-corruption body look like? A federal commission should follow several features of the NSW oversight agency, undoubtedly the most developed anti-corruption commission in Australia.5 Firstly, it must have power to investigate of its own accord, without requiring a formal complaint.6 This would allow the body to investigate conduct before it could result in tangible damage.7 Secondly, the bar preventing investigation must be set low, and not at a level where only misconduct that amounts to ‘serious conduct’ can be investigated.8 Unfortunately, this is a key weakness of the recently created Victorian Independent Broad-based Anti-corruption Commission.9 Indeed, corruption, irrespective of its physical effect and its severity, is parasitic to the integrity of, and public confidence in, government.10 A board instigated to expose and prevent corruption must be able to examine all echelons of corruption, not purely its most acute forms.11 In fact, a 2001 survey into integrity agencies including the Ombudsman found that in the absence of widely construed investigative powers, agencies felt they could not sufficiently inspect suspected executive misbehaviour and maintain public trust.12 Finally, hearings associated with an investigation must be open to the public, unlike the Victorian and South Australian bodies.13 The NSW ICAC has come under some scrutiny for its public hearings; some seeing it as unfairly revealing misconduct unrelated to the investigation at hand. However, the importance of educating public officials and the general public about corruption in order to reduce corruption levels patently outweighs these drawbacks.14 As constitutional law expert Anne Twomey asserts, ‘ICAC works best…when it…

prevents 100 other types of corruption because people have seen what happened in ICAC’.15 However, a federal corruption board should not follow NSW’s lead in having a bifurcated public sector and police commission. Although a separated system has been ostensibly successful in NSW, an integrated model appears more logical.16 Upholding a distinction between the police and other public servants not only inhibits consistency and fairness of proceedings, but constrains efficacy.17 No Australian anti-corruption board possesses prosecutorial powers, and this often underlies public disillusionment when commissions’ findings of misconduct do not materialise in Court. A resolution is arguably found in empowering commissions to make disciplinary rulings such as demoting, sacking or fining public officials, subject to rights of appeal.18 So long as these powers do not impinge on those only exercisable by the judiciary, it appears appropriate to endow a federal commission with the authority to discipline in certain circumstances. These questions are pertinent yet obviously ancillary to enacting a federal anti-corruption board. Seemingly without support from both major parties, the likelihood of the creation a federal body against corruption remains uncertain. 1.

2. 3. 4. 5. 6. 7. 8. 9. 10. 11.

12. 13.

14. 15. 16. 17. 18.

Australian Associated Press, ‘Greens to push for federal ICAC’ The Australian (online) 6 May 2014 <http://www.theaustralian.>. Joint Committee on the Australian Commission for Law Enforcement Integrity, Parliament of the Commonwealth of Australia, Inquiry into Law Enforcement Integrity Models (2009). Commonwealth Ombudsman, Annual Report 2003-2004 (2004). Tim Prenzler & Nicholas Faulker, Towards a Model Public Sector Integrity Commission (2010) 6. Luis de Sousa, ‘Anti-Corruption Agencies: Between Empowerment and Irrelavance’, (Working Paper RSCAS 2009/08, European Union Institute Florence, 2009) 14. Investigation Commission Against Corruption Act 1988 (NSW) s 20(1). Prenzler above n 4, 8. Independent Broad-based Commission Against Corruption 2011 (Vic) s 15(2). Independent Broad-based Commission Against Corruption 2011 (Vic) s 15(2). Peter Bratsis ‘The Construction of Corruption; or, Rules of Separation and Illusions of Purity in Bourgeois Societies’ (2003) Social Text, 5. Olivia Monaghan, ‘A national ICAC? We need better anti-corruption bodies, not more’ The Conversation (online) 8 May 2014 <http://>. Tim Prenzler & C. Lewis C.‘Performance Indicators for Police Oversight Agencies’ (2005) Australian Journal of Public Administration, 64(2), 77-83. Michaela Whitbourn, ‘ICAC under threat of being silenced’ The Sydney Morning Herald (online) 19 April 2014 <http://www.smh.> Patrick Meagher, ‘Anti-Corruption Agencies’ The Iris Discussion Papers (2004) 4, 2. Whitbourn above n 11. Prenzler above n 4, 8. Ibid. Ibid.

Stop. Hammer time. Should ministers and government personnel step aside due to allegations of corruption? OLENA PRUSENKOVA represents this practice as essential to the rule of law, whilst JENNIFER GAMBLE argues that allegations are unsubstantiated until proven otherwise.

For ecent investigations by the Independent Commission Against Corruption (ICAC) have exposed several politicians receiving illegal donations from property holders, conduct banned under Division 4 of the Election Funding, Expenditure and Disclosures Act 1981 (NSW). As ICAC investigations continue, would stepping aside be a solid steppingstone for the preservation of these politicians political integrity? ‘Stepping aside’ or ‘standing aside’ must not be confused with resignation. ICAC’s current investigation of Assistant Treasurer Arthur Sinodinos, as a part of its greater investigation into Australian Water Holdings serves as an example of how these terms differ. Sinodinos stood aside in March this year and by so doing lost his right to ministerial payments and access to ministerial staff. However, because he has not resigned he may be able to restore his position as a frontbencher in the Senate. Stepping aside differs from resignation in that government officials have an opportunity to regain their seat in Parliament. It is crucial to recognise that in our modern society, the political, legal and even cultural aspects of life intertwine. When ministers and government officials step down, the political operations and the ICAC investigations that ensure that politicians do not abuse their power are not slowed down as would be if they did not step aside. The decision to step aside acts as an immediate link to the doctrine of rule of law, ensuring that democracy and equality before the law are promoted for all sectors of society. In fact, it could be argued that requiring ministers to step aside amid corruption investigations could potentially serve as a combination of retributive and restorative justice as a new way of legal thinking. Finally, by requiring ministers and government personnel to step aside while suspected of corruption allegations can help generate a culture of anti-corruption in politics. By Olena Prusenkova


nvestigations into allegations of corruption are fundamental in upholding accountability and are consistent with the principle of responsible government underpinning the Australian Constitution. However, allegations of corruption should not compel government representatives to step aside without substantial certainty. The Independent Commission Against Corruption Act 1988 (NSW) establishes a commission (ICAC), with power ‘to inquire into allegations of corruption’ with the purpose of promoting accountability in public administration. An allegation is a term that sits between mere speculation and proof. Compelling ministers to step aside officiates an allegation and may prematurely elevate its significance. Further, not all allegations are well founded. It is not until such allegations are backed by substantial certainty of truth that government representatives should step aside. This practice is also inconsistent with the presumption of innocence. In politics, mere association with a corruption inquiry, let alone a request to step aside, causes irreparable damage to reputation. Even if allegations are found to be false, public perception of a government with representatives switching duties during an ICAC investigation shakes confidence. It may ultimately be counter-productive to a government’s accountability as fear of association may discourage transparency. This is substantiated by Prime Minister Tony Abbott’s response to questions about corruption allegations that he would not comment on ‘gossip and scuttlebutt’ and ‘if meeting with Eddie Obeid somehow disqualified people, half the front bench would be disqualified’. There is risk of exposure to corruption in politics and if every allegation, well-founded or not, led to stepping aside, a government’s integrity and ability to govern would be irreversibly damaged. By Jennifer Gamble





Thierry Ehrman, Courtesy of Organ Music 2012

VERBATIM Top 8 Seriously Corrupt Citizens From embezzling funds to being responsible for large-scale massacres to moral turpitude, between them these baddies have done it all. Our editors bring to you, in no particular order, 8 of the worlds most depraved, dishonest and downright wicked people that the world has ever had the misfortune of encountering.

1 Jean-Claude Duvalier Also known as “Baby Doc”, Jean-Claude Duvalier became the President of Haiti at age 19. For nearly 15 years, he maintained a violent dictatorship, perpetrating numerous human rights abuses upon his own people. Throughout his time as leader, he embezzled government funds to support his extravagant lifestyle, while most of his country lived below the poverty line. He was so despised by his people that he was forced to flee Haiti in 1986, as has lived in exile ever since.



2 Pol PoT Leader of the Khmer Rouge in Cambodia, from 1963-1977, he implemented agrarian socialism by force. In the four years that the Khmer rouge was in power it is estimated that between 1 - 3 million people died as a result of this policy, with the horrors of the “Killing Fields” and the Tuol Sleng prison-museum in Phnom Penh acting as a reminder of the tyranny of his totalitarian regime. 3 Kim Jong-un The dictator everyone loves to hate, Kim Jongun assumed office in 2011 following the death of his father, Kim Jong-il. Since then, the not-so dear leader has continued his father’s legacy of human rights violations and threats of nuclear warfare. In March of this year, the International Criminal Court called upon Kim Jong-un to answer allegations of crimes against humanity, including the torture and killing of hundreds of thousands of North Koreans in political prison camps. 4 HEINRICH HIMMLER Heinrich Himmler was one of the equally antiSemitic madmen with whom Hitler surrounded himself and as the Fruher’s second in command, Himmler wielded substantial influence and power. The head of the German Secret Police (the SS), Himmler inspected every single concentration camp, and was the leader of the most notorious of them all – Auschwitz-Birkenau. It is estimated between 1.1 – 1.5 million people were killed at this camp alone.

Xavier J Peg 2014

5 VLADIMIR PUTIN This macho leader is renowned for his diverse range of hobbies and interests, including race-car driving, hunting endangered animals, horse riding and flying military jets. With all these achievements under his belt, it’s easy to forget that he is responsible for the current war in Crimea, which has resulted in the deaths of numerous Ukrainians at the hands of Russian troops. Other accomplishments include enacting Russia’s anti-gay laws, banning swearing in literature and art, and jailing critics of his regime. 6 Pope Alexander VI Pope Alexander VI was a Holy Father in more ways than one. He kept many mistresses, with whom he fathered at least 12 children. Obviously afraid of how this might affect his role as Pope, Alexander hid and subsequently killed several of his illegitimate children. It was also rumored that he engaged in incest with a number of his children. 7 FERDINAND MARCOS Marcos was the tenth President of the Philippines and remains a figure that divided the nation. Amongst what some argue to be his significant political achievements, he embezzled between 5 - 10 billion dollars into foreign bank accounts for himself and his wife Imelda, funding her legendary shoe collection (of over 3,000 pairs!). 8 BOKO HARAM Though not technically an individual, we felt that Boko Haram deserved a mention on this list for their role in the kidnap and detention of over 300 Nigerian schoolgirls. The Islamist militant group also uses child soldiers and has claimed responsibility for numerous bombings and attacks on Western groups.


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2014 The Full Bench Ed 2  

This is the second edition of The Full Bench published in 2014 by the UTS Law Students' Society.

2014 The Full Bench Ed 2  

This is the second edition of The Full Bench published in 2014 by the UTS Law Students' Society.