PRIME MINISTER
GOVERNMENT'S RESPONSE TO FINAL REPORT OF ROYAL
COMMISSION INTO THE ACTIVITIES OF THE FEDERATED SHIP
PAINTERS AND DOCKERS UJNION
Release of Final Report
The Government is releasing Volumes 1 to 5 of the
Costigan Commission Final Report. This is in accordance
with the strong recommendation of the Royal Commissioner
( at paragraph 1.025 of Volume 1 of the Report). The
Government is also releasing an appendix volume
containing Appendices 1A, lB and IC, which list the
public witnesses, their representatives and public
exhibits. There are another six substantive volumes which
Mr Costigan recommended, and the Government accepted,
should remain confidential. Mr Costigan has said ( at
paragraph 1.024 of Volume 1) that he made such
recommendations in some cases because persons are on
trial and in other cases because hig~ hly sensitive
current investigations could be impeded, if not
destroyed, by disclosure. ( In addition, some appendix
volumes have not been published because of similar
concerns, because of the need to protect the security of
the systems passed to the NCA or because they contain
material published elsewhere).
Within three of the five -substantive volumes published,
certain deletions have been made identified by blank
spaces in certain parts of those volumes. As I had
informed the Parliament would occur, these deletions
were based on the advice of the Government's legal and
law enforcement advisers. The Victorian Government and
its advisers were also involved in this process and the
deletions were brought to Mr Costigan's attention.
Agreement was reached between the Commonwealth and
Victorian Governments that certain limited deletions
should be made. In Volume certain names of
individuals and companies have been deleted on the
strong advice of the Commonwealth and Victorian
Directors of Public Prosecutions in order to avoid
prejudice to certain current and imminent prosecution
proceedings. only 12 pages are affected pp 86-91,
100-101, 104-106, 113. In Volume 3, certain material at
pages 31-33 which might have identified 4n individual
has been deleted on the strong advice of the Victorian
Director of Public Prosecutions to avoid prejudice to a
current prosecution. In Volume 5, certain material
( pages 29-72) about the activities of a drug trafficker
which, if revealed, might impede investigations has been
deleted on the strong advice of the National Crime
Authority. My assurance to the Parliament that the decisions on
what would or would not be tabled or published would in
no way be affected by political considerations has
accordingly been completely honoured.
Just three days after my Government received the Final
Report, I made available a complete copy to the Leader
of the Opposition ( with the exception of 3 appendices
containing highly sensitive and technical material
relating to the Commission's computer systE! m
Mr Peacock is aware that only a very restricted number
of copies of this sensitive material was presented to
the Commonwealth by the Commission). Mr Peacock has
assured me that the confidential material wrill be
completely protected.
The release of the final report of the Costigan
Commission puts to rest the irrational claims and
behaviour of the opposition on the crime issue.
Firstly, it sinks without trace the charge made by the
opposition Leader on 3 October 1984, that:
11 We are going into an election campaign
without Mr Hawke allowing the Australian people to
know what is in the Costigan Report Australia
is entitled to know the extent to which this
sophisticated network of organised crime is taking
over this country. And yet the Prime Minister is
not going Co allow that to occur This man
is trying to walk away from telling Australians
just what the extent of the threat is."
Secondly, it buries the claim that in any way this
Government had something to fear from the Costigan
Commission Report as I said on 20 September:
" The Government has no reason to believe that the
Costigan Commission's investigations will reflect
adversely on it."
That judgment has been vindicated by both the Report and
the Royal Commissioner himself.
Finally, after muted threats to leak material properly
deleted from the Report, as I have noted above, the
Opposition Leader has conceded that the deletions are
appropriate. Yet again the Opposition Leader has been revealed as one
who is prepared to make the wildest allegations without
any foundation in fact. This will further confirm the
judgment of the Australian people as' to his unfitness
for the office to which he aspires.
Overview of Final Report
Mr Costigan's Final Report, both in its published and
unpublished volumes, represents his important overview
of the state of organised crime in Australia. It
confirms the picture sketched by Mr Costigan in his five
interim reports, of widespread white-col. lar criminal
activities involving tax offences, offenices against
company law, drug importations and many oth ' ers, as well
as substantial linkages to blue-collar criminal
activity. It renders all the more important the Labor
Government's unequivocal commitment to total support for
a sustained fight without fear or favour against
organised crime.
The remarkable evolution of the Costigan Royal
Commission, as it pursued the labyrinth of organised
crime, began from the Painters and Dockers Union. In
Volume 3 of his Final Report, Mr Costigan concludes that
union employees have engaged in manifold criminal
activities including tax fraud, social security fraud,
ghosting, compensation fraud, theft on a grand scale,
extortion, the importation of drugs, the shipment of
armaments and all manner of violence.
By the end of its evolution, the Costigan Commission had
also made a significant contribution, so confirming the
results of previous major inquiries of the past decade,
to the exposure of the role of organised crime in drug
trafficking. Thus certain of the unpublished
confidential volumes relate to unfinished inquiries into
drug-related matters. Mr Costigan also refers to having
monitored, during the last two years, various drug
offenders, and in the course of this action, having
uncovered a range of further criminal activities.
Arrests and prosecutions have resulted from information
obtained analysed and disseminated by his Commission;
joint action by drug enforcement and taxation
authorities has been encouraged. A number of unfinished
drug-related investigations have been referred to the
National'Crime Authority; these are now under active
consideration.
My decision to request the Royal Commissioner in April
1983 to concentrate his further investigations on drug
trafficking has been amply vindicated it is, as
Mr Costigan puts it, a " particularly nauseating"' area of
crime. Exposure of tax frauds and related tax evasion ~ Schemes
has undoubtedly been a major achievement of the Costigan
Commission, as witnessed by its disclosure of the bottom
of the harbour schemes and the substantial number of
consequential prosecutions by Special Prosecutor
Redlich. At July 1983 tax assessments of $ 25m had
issued as a direct result of the Commission's
activities, a figure Mr Costigan believes has increased
significantly during the last 15 months. Mr Costigan
refers to Special Prosecutor Gyles' identification of
6206 companies involved in bottom of the harbour schemes
and revenue collection which has netted the Government
$ 333m, with $ 257m remaining to be collected. The
enduring impact of the Costigan Commission on
investigation, prosecution and recovery acti6n in
relation to tax fraud in Australia is thus indisputable.
A reading of the Final Report discloses that the
Costigan Royal Commission has consciously sought and
developed a high degree of co-operation with law
enforcement agencies throughout Australia. It
deliberately focussed on major targets within its terms
of reference and adopted a practice of referring lesser
matters for example, social security and workers'
compensation frauds to relevant agencies. Amendment
to the Royal Commissions Act was sought and granted to
enable dissemination ( otherwise than through formal
reports) of information to law enforcement agencies; in
addition to convictions ilready obtained, numerous
investigations and prosecutions by agencies thro. ighout
Australia are continuing as a result.
Mr Costigan also adopted the practice of referring major
matters to other bodies for the final investigative
processes leading to arrest, charge and prosecutions.
Creation of the Special Prosecutor's office was in
recognition of, and assisted in, this practice; the
creation by this Government of the office of Director of
Public Prosecutions has enabled the effective
continuation of the practice.
Acknowledgement of the Costigan Commission's unique
development of investigative techniques in relation to
organised crime is particularly warranted. The
Commission has concentrated both on documentary evidence
in seeking to follow the paper trail and upon the
development of sophisticated computer information
management systems; and has done so in two major areas:
the accrual of criminal wealth, as traced through the
financial system, and the manifestation of criminal
organisation as demonstrated through the association of
individuals. The capacity to do so was greatly enhanced
by the more than doubling of the financial resources of
the Commission under this Government, and the
substantial increase in its staff. The bulk of the
Commission's staff, skilled in these ' investigatory
techniques and the technology upon which they vitally
depend, has been transferred to the NCA, which now
carries the baton of this Government's commitment to the
fight against organised crime.
Comments on National Crime Authority ( NCA)
Not surprisingly, Mr Costigan's report includes many
references to the National Crime Authority ( NCA).
Chapter 9 of Volume 1 deals with the transfer from the
Royal Commission to the NCA; in various sections,
Mr Costigan points to what he considers to be
inadequacies in the National Crime Authority'
legislation; finally the NCA features in the
recommendations: one change to the NCA plus a number of
matters to be investigated further by the Authority.
Thus, despite the opposition's criticisms of recent
times, Mr Costigan has only made one explicit
recommendation for change to the NCA legislation.
Transition Mr Costigan devotes Chapter 9 of Volume 1 to the
transition to the NCA. It is mainly an historical
account, drawing heavily on correspondence between
himself and the present and former Governments, much of
which has already been tabled.
Mr Costigan raises two specific concerns regarding the
transition: the possible prejudice to future investigations by
the publication of the summaries in the National
Times a concern shared by the NCA and this
Government; and
. the lack of time to conduct briefings.
Much has already been said on this latter point. As
noted in the report, Senior Counsel was able to give
some briefings in the Commission's last days.
Mr Costigan draws a parallel to the time taken by
Special Prosecutor Redlich and Gyles and the Director of
Public Prosecutions, Mr Temby, to fully understand the
Commission's operatiohs. There is one great,
overwhelming difference the NCA has absorbed almost
all of the Commission's staff, fully versed in the
Commission's operating techniques, computer system,
extensive data base and outstanding investigations. It
has thus assimilated the accumulated knowledge of the
Costigan Royal Commission.
Mr Costigan also refers to a " substantial", but
inevitable, hiatus in continuing his operations. The
Government does not accept that there has been a
substantial delay. The Authority wasted no time in
resolving on 18 July to investigate the Commission's
outstanding investigations. Given the important
objective of the Authority subsuming the Commission's
staff, it was not able, of course, to become! fully
operational until the Commission staff had completed
their work on the final report. That has now happended
and the Authority is up and running, with fully trained
staff and an extensive computer system.
Importantly, the report in no way criticises, the NCA for
its part in the transition. Indeed, it notE-s that only
one day after receiving the Commission's summaries of
outstanding investigations, the Authority resolved to
investigate these matters and requested access to all
documents held by the Commission.
Legislative Criticisms
Mr Costigan's criticisms of the Authority's statutory
framework fall into three main areas:
the need for the Authority to seek specific
references;
* insufficient access to taxation records; and
* inability of the NCA to expose an individual's
involvement in criminal activities.
Mr Costigan urges removal of the requirement in the NCA
Act for references to be given by the Ministerial
Committee to the Authority before the Authority can
exercise coercive powers as to a specified subject
matter of inquiry. He assumes that the references to be
given by Governments to the Authority will go into such
detail that, if they become public, reputations of
persons referred to will suffer.
The security of such information is, of course, very
important. The Government, however, is not convinced
that appropriate procedures and safeguards oral
briefings in the most sensitive of cases) cannot be set
in place. In fact, I-have already written to the
Special Minister of State, who is the Chairman of the
Inter-Governmental Committee, requesting that he take up
these matters with the NCA to ensure appropriate
security and that briefing arrangements are put in
place. In considering the form of the references to be given to
the NCA there is not only the concern referred to by
Mr Costigan that references might identify persons to
the prejudice of their reputations, but the further
concern lest references be expressed so broadly that
they impose no effective limit on the area of a special
enquiry by the Authority.
However, in the drafting of the first references given
by the Commonwealth Minister to the NCA on 19 October
1984, deliberate care was taken to ensure that both
concerns were met. Thus, the two referEnces did not
identify individuals and, by referring in the references
to additional information furnished to the Minister,
reasonably clear limits were placed on the Authority's
areas of inquiry.
It must be emphasised that the Authority may undertake a
general investigation within its very broad statutory
charter without a reference, and it is only when it
requires to exercise coercive powers that a reference is
needed.
For the Government to allow the Authority to exercise
these special coercive powers otherwise than under a
reference of a specified subject matter of inquiry would
be an abdication of the Government's proper
responsibility and the great majority of the community
would, I am sure, be gr~ atly concerned if restraints on
the exercise of the special powers were removed.
Mr Costigan expresses disappointment that the NCA will
not have the same access to taxation records as he has
had. The NCA does, of course, have access to taxation
information. In relation to tax-related investigations
the Commissioner of Taxation may pass information direct
to the NCA. In other cases, the Authority must first
obtain a warrant from a Federal Court Judge. This is
considered an appropriate balance between the need to
protect individual privacy and to allow the NCA acess to
relevant information. The Opposition did not oppose or
move to amend this when the legislation was debated.
Mr Costigan considers it a weakness in the NCA's armoury
that it does not have the power to hold public hearings
and to report upon identities. He considers it a
particular handicap in the fight against drug
trafficking, and indeed to overcome this, proposes a
Taxation Investigation Tribunal and a new Royal
Commission to investigate a particular matter.
The importance of public exposure as a deterrent is one
of the central themes of the Commission's final report.
Mr Costigan acknowledges, however, that this very
fundamental issue was fully considered by the Senate
Select Committee to which both Mr Costigan and his
Senior Counsel gave evidence and indeed by the
Government in developing the legislation. Public
hearings and reports were, however, specifically
rejected, primarily on the ground that a person's
reputation should not, as a general rule, be prejudiced
or put at risk unless and until he or she becomes
subject to the ordinary process of the criminal or civil
law. This is a quite legitimate difference of opinion
about the best way to tackle organised crime.
This raises important issues which ought to be re-stated
here. There has been considerable debate as to what
model the Government ought to adopt in establishing a
permanent body to lead the fight against organised crime
and to follow up the important start made by the
Costigan Commission. As instanced earlier, views differ
on almost all points.
Mr Justice Stewart's comment on 26 September, however,
is very pertinent. He said:
function of a Royal Commission is completely
different to the function of a National Crime Authority.
The function of a Royal Commission is completely
different to the function of a National Crime Authority.
The function of a Royal Commission is to identify areas
of crime, to point in the right direction. A Royal
Commission is not a body that seeks to accumulate hard
evidence and Mr Costigan has already indicated that he
hasn't seen ihis task as that, he hasn't want~ ed to do
it, he hasn't tried to do it But the function of
the NCA accumulating hard evidence is quite a different
function
The Government and the members of the Authority are
confident that the Crime Authority has the appropriate
powers and resources to do the job. It has a mix of
powers specifically designed for the task powers which
in some areas go beyond those of a Royal Commission. it
has taken over almost all of the resources of the
Costigan Royal Commission staff trained in the
Commission's investigative techniques all of the
information collected, and the Commissioner's computer
system and extensive data base. Furthermore, all
Australian Governments have advised of their support for
and co-operation with-the NCA.
The Government has also made it clear that should
members of the Crime Authority form the view that they
require an extension of their power, then it will*
respond quickly and sympathetically to any such request.
The Government is not alone in believing the Authority
can meet the challenge ahead.
Previous recommendations
In Volume I of his Final Report, Commissioner Costigan
lists recommendations contained in his Interim Reports
3, 4 and 5. ( Interim Reports 3 and 4 were presented to
the previous Government; Interim Report 5 was presented
to the Labor Government in July 1983). Additionally,' Mr
Costigan adverts to his understanding about what action
the Government has or has not taken on them.
Prior to the announcement of the election, decisions had
been taken or action was in train, in respect of all of
Mr Costigan ' s recommendations emanating from Interim
Reports 3, 4 and
Mr Costigan's recommendationq concerning amendments to
the Income Tax Assessment Act, contained in his Tnteri"-
Report 3, were incorporated in amendments to the Income
Tax Assessment Act passed in 1982. Subsequently, this
Government passed the NCA ( Consequential Amendment) Act
1984 which enables Royal Commissions to pass taxation
information they have received to the NCA.
In respect of Mr Costigan's recommendations concerning
the establishment of a Special Task Force to investigate
and prosecute criminal afid civil cases contained in
Interim Report 4, Special Prosecutors Redlich and Gyles
were appointed. -Their work will now be carried on by
the Director of Public Prosecutions Office created by
this Government.
In respect of Mr Costigan's recommendation in Interim
Report 5, that attention be paid to an appropriate
degree of co-operation between the Office of the
Director of Public Prosecutions and State prosecution
agencies, Mr Temby has indicated that he is conscious of
the need to bring about co-operation between his office
and State authorities'and he is taking steps to that
end. In respect of Mr Costigan's recommendations in Interim
Report 5, concerning exchange controls, they were
significantly affected by the Government's new foreign
exchange arrangements, a point acknowledged by Mr
Costigan in Volume I of his Final Report.'
In respect of Mr Costigan's recommendations in Interim
Report 5 concerning corporation controls, the Government
has endorsed the Ministerial Council's decision of 16
December 1983 to approve in principle the desirability
of achieving a national information system on
shareholdings. This should substantially meet the
objectives of Mr Costigan's proposals.
In respect of Mr Costigan's recommendations in Interim
Report 5 concerning mining reserves, the Government has
agreed that the Petroleum ( Submerged Lands) Act be
amended to clarify and strengthen provisions relating to
the approval and registration of agreements between
parties holding or acquiring interests in petroleum
titles. The recommendations on Mining and Petroleum
have been brought to the attention of State and Northern
Territory Ministers, and the Minister for Resources and
Energy had been undertaking consultation with his State
and Territory colleagues on proposed amendments to the
Petroleum ( Submerged Lands) Act.
In respect of Mr Costigan's remaining recommendations in
Interim Reports 4 and 5, concerning amendments to
Section 16 of the Income Tax Assessment Act, tax
controls, banking controls, and overseas arrangements,
extensive consultation has taken place on these farreaching
recommendations. In each area, firm proposals
had been prepared which can be considered after the
election.
Mr Costigan's Final Recommendations
Mr Cost igan's principal recommendations are summarised
in Chaper 10 of Volume 1 of his report.
Mr Costigan makes a number of recommendations relating
to the strengthening of existing legislation or new
legislation for the fight against organised crime in
Australia. Some of these also involve State
Governments, with whom the Federal Government will need
to work closely in considering the recommendations.
These include, for example, proposals for new agencies
such as the Port Security Authority, Taxation
Investigation Tribunal and Taxation Investigation
Office. In its formal response to these recommendations, the
Federal Government will also wish to have the detailed
advice of the NCA, the Commonwealth DPP and the AFP,
they now have independent statutory responsibility for
the investigation and prosecution of offences against
Commonwealth law. As the Government has consistently
made clear, it will respond quickly and sympathetically
if it should be evident that their existing powers are
inhibiting these organisations in the f * ight against
organised crime. Any formal changes to their existing
powers would, of course, be a matter for decision after
the caretaker period.
Mr Costigan makes a number of recommendations regarding
ongoing investigations and prosecutions. The full report
is now in the hands of the NCA, the Commonwealth DPP and
AFP and under their statutory powers they do not need
any formal direction from the Federal Government to
proceed with the gathering of admissible evidence or
prosecutions if they judge such courses to be
appropriate in the light of the report. However, should
the Government receive any recommendations requiring
immediate action from these bodies during the caretaker
period, such action will be immediately taken by the
Government. As to recommedations concerning the setting up of
investigations outside the framework of the NCA the
Commonwealth DPP, and the AFP, the Federal Government
takes the view in principle that the NCA, the
Commonwealth DPP and the AFP are the bodies to which the
Federal Government, with the support of the States in
the case of the NCA, has entrusted the leading role in
the fight against organi -zed crime in Australia. it is
not only logical but essential that the Government
should give them ' full support in that fight. Formal
decisions on these recommendations should, of course,
properly wait until the end of the caretaker period.
Ongoing Investigations/ Prosecutions
Apart from ongoing investigations/ prosecutions referred
to in the Final Report ( including the Confidential
volumes), Mr Costigan's staff were also attending to a
number of ongoing inquiries. The Commission also passed
to the NCA a number of completed or wel. l advanced
analyses of investigations into drug-relIated matters.
These current investigations and prosecutions are now
the subject of action by the NCA, the Commonwealth and
Victorian DPPs, and the AFP. Mr Costigan's
investigations have therefore been continued in none
have the trails gone cold.
Moreover, the resources of the Costigan Royal Commission
have now been transferred to the NCA: the Commission's
computer database and system; the analyses prepared by
the staff of the Commission: the material contained in
reports of the Commission, including the full,
unexpurgated final report; one of the Commission's
junior counsel; most of the solicitors who have been
engaged in conducting Mr Costigan's operations; and
accountants, analysts, collators and other staff who
have been involved in Mr Costigan ' s operations. There
can be no doubt that, as Special Prosecutor Redlich said
at page 48 of his recent report, " the Authority has the
scope to maintain the initiatives developed by the
Costigan Royal Commission"
Mr Costigan has recommended that the activit~ ies and
affairs of certain persons mentioned in the confidential
volumes be closely monitored and investigated by all
relevant law enforcement agencies including the NCA, the
Australian Taxation Office, Australian Customs Service,
corporate affairs offices, bankruptcy offices arid law
enforcement agencies in the United States. It will fall
to the incoming Government to address these matters and
to give such further directions as may be considered
necessary. Civil Liberties Issues
Some of the material in the published Volume! s posed
difficulties for the Government because of the
Government's strong commitment to civil liberties. This
material relates to the naming of certain individuals.
Mr Costigan argues at some length that exposure of
suspected criminal activities by public reports of Royal
Commissions and like bodies before conviction of the
persons concerned and, indeed, even in circumstances
where conviction-is unlikely, is a proper and effective
means of dealing with those activities. on this basis
Mr Costigan has named a considerable number of persons
as suspected of committing offences or being in some way
involved in the commission of offences.
The Government strongly believes that such a course is
normally neither correct in principle nor effective in
final result. It believes that persons should not be
named in public reports as having committed, or as being
suspected of having committed, offences unless duly
convicted in the courts of law. To do so would make a
mockery of the rule of law, of the long-standing
presumption of innocence before conviction and of
protections that should be afforded by the law to every
citizen. In the circumstances surrounding this Report, however,
the Government believes it has no alternative to
deciding that deletions should be confined to those made
on narrow legal and law enforcement grounds which I have
described. With considerable reluctance the Government
has decided that no deletions should be made because of
the civil liberties considerations mentioned above, many
of which are almost certainly applicable. This decision
has been taken for two primary reasons:
given the nature and structure of Mr Costigan' s
Report, it would not be practical to delete all
references to persons named as being involved in the
commission of offences to delete all such
references would make the Report, to a large extent,
meaningless; and
there has been a high degree of public expectation in
relation to this Report resulting from the breaches
of confidentiality that have occurred by publication
of material in the National Times, arnd the cheap and
dishonest political posturing by the opposition that
the Government had something to hide. The
substantial deletion of names would therefore be
likely to lead to community concern and
misunderstanding.
For the reasons stated the Government's profoundly
regrets the course of action that has been necessary in
this instance, and it is important to note that the
National Crime Authority Act makes provision to ensure
that this cannot happen in the case of the NCA. The
Government does not believe that naming of persons in
public reports is an effective or appropriate
alternative to the processes and sanctions of the law of
the land.
Conclusions Finally I should like to extend, on behalf of all
concerned Australians, our sincere appreciation for the
application and dedication with which Mr Costigan and
his staff have approached the important tasks they were
given by successive Governments, tasks which expanded
from limited objectives into the investigation and
exposure of organised crime.
There have, as Mr Costigan acknowledges, been frank and
robust differences of view, from time to time, between
his Commission and both my Government and the former
Government. As I have earlier noted these have been
legitimate differences of opinion about the best way to
tackle organised crime. But, as Mr Costigan records,
there has never been any doubt that the Government was
anxious to maintain the attack on organised crime.
Under the auspices of the NCA and relevant agencies and
with undoubted community support, the Government as
Mr Costigan acknowledges will continue to take all
action to stamp out organised crime.
1 November 1984