Remarks by the Director-General of National Intelligence at the public hearing as part of the INSLM’s review into the operation and effectiveness of the National Security Information (Criminal and Civil Proceedings) Act 2004 (Cth), 19 July 2023, Barton, Canberra.

Thank you for the opportunity to appear before you this morning. I’m Andrew Shearer, the Director-General of National Intelligence.

We are attending today on behalf of all of the agencies of the National Intelligence Community, or the NIC – the ACIC, AGO, ASD, ASIO, ASIS, DIO and ONI, and the intelligence functions of the AFP, AUSTRAC and the Department of Home Affairs.

The object of the National Security Information Act is ‘to prevent the disclosure of information in federal criminal proceedings and civil proceedings where the disclosure is likely to prejudice national security’ – with the very important proviso that preventing disclosure would not seriously interfere with the administration of justice.

Therefore my starting point today is to outline briefly the contemporary threats to Australia’s national security and to national security information in Australia.

There are obviously limits to what I can say in this forum, and as I mentioned I think it would be valuable for you to receive an updated classified briefing from relevant agencies on the current threat environment, which has changed profoundly since the NSI Act commenced in 2004.

In particular, the challenge Australia faces from espionage and foreign interference today is unprecedented, and the threats are more serious and sophisticated than ever before.

ASIO assesses that foreign intelligence services from multiple countries are aggressively targeting all levels of government, seeking to interfere in our democratic institutions, and using increasingly advanced technology and tradecraft to do so.

This is part of a global trend. To take just one example, last week the Intelligence and Security Committee of the UK Parliament reported on China’s pervasive intelligence targeting and foreign interference activities in the United Kingdom.

Unfortunately our legal system is not immune.

We know that foreign intelligence services are gathering intelligence about legal proceedings and are using litigation as an intelligence collection tool.

Our adversaries understand that national security information is vulnerable in legal proceedings and is at far greater risk than it might be inside an intelligence agency or a secure facility.

At the public hearing you held on the Alan Johns matter in 2021, the Director-General of Security Mike Burgess noted foreign intelligence services would absolutely have an interest in information provided during legal processes that would assist them in identifying our sources, methods, personnel, capabilities, vulnerabilities and intelligence priorities.

And as we noted in our submission, the DG of Security also stated in his annual threat assessment that Australian legal figures have been subjected to suspicious approaches.

Therefore, the threat we are facing today is not abstract but very real.

As intelligence professionals, the men and women of the National Intelligence Community – including all ten agency heads – are deeply committed not only to protecting Australia’s national security but to upholding our values.

This includes the proper administration of justice and the right to a fair trial.

The NIC is also the steward of many of Australia’s most valuable secrets – as well as those shared with us though our vital international partnerships.

The law has long recognised the public interest in their enduring protection.

When the NIC seeks to protect its sensitive equities in legal proceedings, it does so informed by its knowledge of real and immediate threats, and our deep understanding of their consequences.

It is in this context I now turn to the NIC’s collective view of the NSI Act.

We assess that the Act plays a critical part in Australia’s ability to protect its people, and its most sensitive intelligence, capabilities and operations in an increasingly hostile security environment.

The agencies of the NIC cannot succeed in deterring and curtailing malign acts without being supported by effective law enforcement action to arrest, charge and prosecute those individuals who wish to harm Australia.

The NSI Act was introduced to address deficiencies in the methods by which classified information from Australia and its partners could be used in court processes.

As demonstrated in the 2001 ACT Supreme Court case of Lappas and Dowling, the powers otherwise available to the Court proved insufficient in the circumstances. In Lappas, the Commonwealth faced the ‘unpalatable choice of accepting the damage resulting from the disclosure of information or protecting that information by abandoning that prosecution’. As is well known, the second and more serious charge under the Crimes Act in that matter was stayed.

Since early 2005, the NSI Act has remedied this deficiency.

It was not a trailblazing solution – for example, the Classified Information Procedures Act has been in existence in the United States since 1980, and section 38 of Canada Evidence Act has been available since 1985. Our closest partners are dealing with the same challenges.

Submissions made to this Review address the importance of achieving a balance between justice and the protection of national security information.

We consider the Act offers the right framework to navigate that tension.

The NSI Act ensures that the protection of national security information is not at the cost of the proper administration of justice, and the Court may order a proceeding be stayed if it threatens to impinge on a defendant’s right to a fair trial. This is an indispensable plank of our liberal democracy.

Another indispensable element of our system is the rule of law.

It would be a grave matter if the criminal law could not be fairly, properly and equitably enforced.

The NSI Act is especially relevant to many of the most serious offences on the statute book, including terrorism, espionage and foreign interference. The inability to effectively prosecute such offences would have a detrimental impact on Australia’s rule of law and national security.

This is especially so if perverse incentives were baked in – such as the more sensitive the relevant evidence, the more likely a prosecution would be frustrated. Law enforcement action is only one weapon in the nation’s arsenal, but it is a critical one.

Significant reductions in our ability to protect sensitive intelligence during, through and beyond litigation would be exploited by our adversaries and of concern to our allies.

Relationships with close partners provide access to unique intelligence, tools, techniques and technologies, giving Australia an information advantage few nations possess. Continued access to this advantage relies on our partners’ confidence that their information will not be exposed without their agreement. The NSI Act is an important means of maintaining our partners’ confidence that this will continue.

Nevertheless, the NSI Act has remained judiciously used. The Attorney-General’s Department’s submission to this Review states the Act has been used in only 51 matters in over 18 years of operation – a small proportion of cases.

Each potential use of the NSI Act effectively goes through at least two decision ‘gates’ – the Attorney-General, and then the Courts. It is invoked when it is the best and sometimes the only means available.

Importantly, if Orders are made, the national security information specified in those Court orders can be protected from exposure in the public domain even once the legal proceedings conclude. Some secrets need to be protected for decades.

The NIC recognises that procedures stipulated to protect highly classified information can be administratively burdensome. 

This is not unique to the NSI Act or to defendants and applicants and their legal representatives.  Requirements to use stand-alone IT equipment, to store material in class B containers, and to discuss classified information only in approved locations, apply to everyone, and not just in legal proceedings.

None of this means the NSI Act cannot be improved, and the NIC considers it could usefully be modernised in several respects. Our suggestions are largely directed at improving its practicality, consistency and efficiency, which would serve the interests of all parties.

For example, the Review could examine whether the Act could usefully be invoked earlier in certain legal disputes – which could assist with the resolution of certain claims via alternative dispute resolution, consistent with the Commonwealth’s model litigant obligations.

We have also proposed further exploration of creating national uniformity in the way NSI appeals are run. We identified that the NSI Regulation may benefit from updates to reflect now-routine practices, and suggest modest clarification regarding the definition of national security information.

We have also raised the idea of concentrating NSI Act hearings into a specialised Division of the Federal Court. We see this latter suggestion as a practical mechanism which could be used to make it easier for the court and the parties to handle classified information in a suitable environment, by concentrating equipment and expertise in a smaller number of venues. On the question of the desirability of court environments that are better tailored to handling national security information, we have much in common with other submissions made to your Review. 

While we acknowledge these are suggestions that the NIC is not itself positioned to implement, we would be pleased to contribute to the conversation about how this important legislative framework can be modernised and enhanced.

Thank you.

19 July 2023

National Intelligence Community Submission to the INSLM review of the NSI (Criminal and Civil Proceedings) Act

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