Report of the Inquiry Into Australian Intelligence Agencies

199 Pages·2004·1.46 MB·English

REPORT OF THE INQUIRY INTO
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REPORT BY PHILIP FLOOD AO
20 July 2004
The Hon. John Howard MP
Prime Minister
Parliament House
CANBERRA ACT 2600
Dear Prime Minister,
I am enclosing the report of my Inquiry into the Australian Intelligence Agencies
which you requested on 4 March 2004.
I have received full cooperation from Ministers in your Government, from the
heads and members of all intelligence agencies, from Departments and from
the Chief and members of the Australian Defence Force. I have also consulted
with former Prime Ministers, Ministers from previous Governments and a wide
range of other people with knowledge of the intelligence community. A high
quality Secretariat has given me invaluable assistance. While grateful for the
cooperation of all I am solely responsible for the contents of this report.
An unclassified version of my report is also enclosed.
Yours sincerely,
Philip Flood
© Commonwealth of Australia 2004
ISBN 0 646 43736 4
This work is copyright. Apart from any use as permitted under the Copyright Act 1968,
no part may be reproduced by any process without prior written permission from the Australian
Government, available from the Department of Communications, Information Technology
and the Arts. Requests and enquiries concerning reproduction and rights should be addressed
to the Commonwealth Copyright Administration, Intellectual Property Branch, Department
of Communications, Information Technology and the Arts, GPO Box 2154, Canberra ACT 2601,
or posted at http://www.dcita.gov.au/cca.
Printed by Goanna Print
Designed by RTM Design
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1. INTRODUCTION 1
2. AUSTRALIA’S INTELLIGENCE NEEDS 9
3. RECENT INTELLIGENCE LESSONS 17
4. OVERSIGHT OF THE AUSTRALIAN INTELLIGENCE COMMUNITY 51
5. SUITABILITY OF THE CURRENT DIVISION OF FUNCTIONS 69
6. CONTESTABILITY OF ASSESSMENTS 84
7. RESOURCING AND EFFECTIVENESS OF THE AGENCIES 97
Office of National Assessments 98
Defence Intelligence Organisation 116
Defence Signals Directorate 134
Defence Imagery and Geospatial Organisation 139
Australian Secret Intelligence Service 146
Cross Community Issues 152
8. FINDINGS AND RECOMMENDATIONS 163
Annexes
A. PRIME MINISTER’S LETTER OF 4 MARCH 2004 186
B. SECRETARIAT 188
C. PERSONS INTERVIEWED BY THE INQUIRY 189
D. SUBMISSIONS RECEIVED BY THE INQUIRY 193
E. ACRONYMS AND ABBREVIATIONS 194
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introduction
On 4 March 2004, the Prime Minister, the Hon John Howard MP, announced
this Inquiry into Australia’s intelligence agencies. The announcement followed
the release on 1 March of the report of the inquiry of the Parliamentary Joint
Committee on ASIO, ASIS and DSD into intelligence on Iraq’s weapons of mass
destruction. The Prime Minister requested, without seeking to limit this Inquiry,
that it should provide advice on:
the effectiveness of the intelligence community’s current oversight and
accountability mechanisms as they relate to such matters as the setting of
priorities, the assigning to the priorities of appropriate resources, and the
delivery of high-quality and independent intelligence advice to the government
the suitability of the current division of labour among the intelligence
agencies and communication between them
the maintenance of contestability in the provision to government
of intelligence assessments
the adequacy of current resourcing of intelligence agencies and
in particular ONA.
The Prime Minister indicated that the Inquiry should focus on Australia’s foreign
intelligence agencies—the Office of National Assessments (ONA), the Australian
Secret Intelligence Service (ASIS), the Defence Intelligence Organisation (DIO),
the Defence Signals Directorate (DSD), and the Defence Imagery and Geospatial
Organisation (DIGO). The Prime Minister also indicated that it would be open to
the Inquiry to consider linkages between these organisations and the Australian
Security Intelligence Organisation (ASIO). The Inquiry did consider such linkages
but it did not inquire into ASIO per se because that would not have been justified
by the terms of reference. For this reason, domestic security and intelligence
arrangements are not the focus of this report.
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The Prime Minister’s letter indicated that the Inquiry should report by 30 June.
In view of the substantial amount of material that came before the Inquiry, the
Prime Minister acceded to a request for an extension to the timeframe of the
Inquiry, until 31 July.
The full text of the Prime Minister’s announcement setting out the terms of
reference for the Inquiry is included as Annex A.
Australia’s Intelligence Agencies
OFFICE OF NATIONAL ASSESSMENTS (ONA)
ONA is an autonomous body which reports direct to the Prime Minister. Its
two functions, specified in the Office of National Assessments Act 1977, are
reporting and assessment on matters of international political, strategic and
economic significance to Australia, and monitoring of Australia’s
international intelligence activities.
DEFENCE INTELLIGENCE ORGANISATION (DIO)
DIO provides all-source intelligence assessment at the national level to
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in AUSTRALIAN SECRET INTELLIGENCE SERVICE (ASIS)
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function is to obtain and distribute intelligence, not readily available by other
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to means, about the capabilities, intentions and activities of individuals and
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DEFENCE IMAGERY AND GEOSPATIAL ORGANISATION (DIGO)
DIGO has the primary role of acquisition, production and distribution of
imagery and geospatial-based intelligence and data in support of Australian
Defence Force and government decision-makers. DIGO is also the lead
Defence agency for imagery and geospatial standards.
AUSTRALIAN SECURITY INTELLIGENCE ORGANISATION (ASIO)
ASIO is Australia’s security service. Its main role is to gather information and
produce intelligence that will enable it to warn the government about
activities or situations that might endanger Australia’s security. The Australian
Security Intelligence Organisation Act 1979defines ‘security’ as the protection
of Australia and its people (including overseas) from espionage, sabotage,
politically motivated violence, the promotion of communal violence, attacks
on Australia’s defence system, and acts of foreign interference. The functions
of ASIO include providing security assessments and protective security
advice and collecting foreign intelligence in Australia.
Approach to Terms of Reference
The Inquiry focused particularly on the systemic issues identified in the terms of
reference and on ways to improve the future operation of the intelligence agencies.
In parallel, the Inquiry undertook a thorough examination of the pre-war
intelligence on Iraq in order to establish the full basis and nature of the intelligence
assessment provided to government in the lead-up to the launch of military action
on 19 March 2003. An important objective was to identify any lessons from the
Iraq experience bearing on the wider systemic issues relating to the effectiveness
and performance of the Australian intelligence community (AIC).
In addition, in order to provide a broader framework of reference for the
investigation of systemic issues, the Inquiry made a thorough examination of
the intelligence provided to government concerning Jemaah Islamiyah (JI) prior to
the Bali bombings on 12 October 2002 and of the intelligence provided in advance
of the despatch of Australian military personnel and police to the Solomon Islands
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in July 2003. Further, the Inquiry examined a number of the matters raised by tr
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Lieutenant Colonel Collins in his letter to the Prime Minister of 18 March 2004. u
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Some of Lieutenant Colonel Collins’ concerns (for instance relating to his career ti
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in the Army) are not relevant to the subject matter of this Inquiry.
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A public invitation requesting any person who wished to make a submission to
the Inquiry was given by notices published in leading Australian newspapers on
13 March 2004. Submissions were also requested directly from the intelligence
agencies and many federal authorities. The Inquiry interviewed a very wide
range of people with knowledge of the AIC, and also met with all persons who
asked to be interviewed by the Inquiry. In addition, the Inquiry had a message
conveyed to all staff of the AIC inviting any individual who wished to do so to
contact or make comment to the Inquiry. A number did so.
The Inquiry was assisted by a Secretariat of six persons drawn from the
Departments of Defence, Foreign Affairs and Trade, the Prime Minister and
Cabinet and the Australian Defence Force (details at Annex B). As a whole the
team examined relevant records from all agencies, commissioned additional
research and interviewed a large number of staff. Two members of the Secretariat
visited London and Washington for discussions with relevant authorities.
Details of submissions received and persons interviewed by the Inquiry are set
out in Annexes C and D.
Previous Inquiries
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t from, or were refined by, a series of major inquiries: two Royal Commissions
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li Codd in the early 1990s as well as two major reviews undertaken by Mr Sandy
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Hollway and Mr Dennis Richardson early in the same decade. This Inquiry was
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The essential philosophy underlying the Australian agencies engaged
in international intelligence was most fully articulated by Justice Hope
and has been accepted by the Hawke, Keating and Howard Governments.
In very brief summary:
Australia needs its own independent and robust intelligence assessment
and collection capability.
Intelligence assessment should be separate from policy formulation.
Intelligence collection functions should be separate from intelligence
assessment, and the collection of human and signals intelligence should
be undertaken by different agencies.
The Office of National Assessments, as the principal assessment agency
for foreign intelligence, should enjoy statutory independence.
In addition to assessing, on a continuing basis, international developments
of major importance to Australia, ONA should keep under review the activities
connected with international intelligence that are engaged in by Australia.
In respect of security intelligence, the responsibility of ASIO, collection and
assessment should be separate from law enforcement. ASIO also needs
access to intelligence available in and from other parts of the world.
Ministers, and subject to them the Secretaries of Departments,
should be actively involved in providing guidance to and monitoring
the intelligence community.
All intelligence activities should be conducted in accordance with the
laws of Australia.
The Nature of Intelligence
Intelligence is covertly obtained information. While it may take a number of
forms, the key characteristic of intelligence information is that it is obtained
without the authority of the government or group who ‘owns’ the information.
Broadly, intelligence consists of three main disciplines:
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intelligence gained through contact between people n
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(human intelligence or ‘humint’) od
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intelligence obtained by eavesdropping on electronic communications
(signals intelligence or ‘sigint’)
and intelligence obtained by photography (imagery intelligence or ‘imint’).
Each of the three intelligence specialties is complex and consists of internal
sub-disciplines, but these broad definitions will suffice for the present purpose.
While the methods by which these types of intelligence are collected have
changed substantially over the decades, the categories ‘humint’ and ‘sigint’ are
barely changed since World War II. Satellite imagery is a more recent addition to
the intelligence family, growing out of the development of satellite photography
in the 1960s.
In the Australian intelligence system, each of these three collection functions
is undertaken by a separate organisation: humint in the Australian Secret
Intelligence Service; sigint in the Defence Signals Directorate; and imagery
in the Defence Imagery and Geospatial Organisation.
Intelligence analysis or assessment is the process of using intelligence,
and other information, to form a picture of an issue or occurrence. In the
Australian system, the foreign intelligence assessment agencies are the
re Office of National Assessments and the Defence Intelligence Organisation.
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t to collect than is covert intelligence. Public sources also contain much of the
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