An update on NACC – the new National Anti-Corruption Commission commenced operations

On 1 July 2023, the long-awaited National Anti-Corruption Commission (NACC) commenced with an opening address from Commissioner Paul Brereton, who outlined the purpose and priorities of the new body. Commissioner Brereton said he wanted the NACC "to have the reputation of being fearless but fair, independent, and impartial".

In his opening address, Commissioner Brereton emphasised that the NACC would look to help preserve integrity in governance to ensure that the public interest is served, and that by proxy, the jurisdiction of the NACC extended to the corrupt conduct of consultants and contractors (not just Commonwealth employees) in their capacity at public officials.

As we previously canvassed in earlier articles, this independent Commonwealth agency is part of a renewed focus on integrity in public institutions. Under the National Anti-Corruption Commission Act 2022 (Cth) (NACC Act), the NACC will set out to detect, investigate and report on serious or systemic corrupt conduct in the Commonwealth public sector in its attempt to prevent corruption in the Commonwealth Government.  An understanding of the powers of the NACC is particularly important to businesses contracting with the Federal government and its agencies and entities.

NACC’s line of vision

The NACC’s powers extend to investigation of alleged corrupt conduct by Commonwealth Government ‘public officials’. The Commissioner of the NACC has the power to investigate whether a person has engaged, is engaging, or will engage in ‘corrupt conduct’. Corrupt conduct is defined under section 8 of the NACC Act to be:

1. conduct by a public official; or
2. conduct that adversely affects, or that could adversely affect, the honest or impartial exercise or performance of a public official’s powers, functions or duties.

Under sections 10-13 of the NACC Act, ‘public officials’ includes:

1. Members and Senators of the Australian Parliament, including ministers, and the people who work for them;
2. staff members of Commonwealth agencies, including employees of Commonwealth government departments (and secondees), Commonwealth companies and statutory bodies and contracted service providers (including consultants, independent contractors, labour-hire contractors, and others providing contracted services to the government); and
3. staff members of the NACC.

Importantly, the NACC has powers to investigate any person, irrespective of whether they themselves are a ‘public official’, if they have engaged in conduct which may cause a public official to act dishonestly in their role.

For the purposes of the NACC Act (and subject to the NACC’s jurisdiction), the definition of ‘public officials’ does not extend to judges, the Governor-General and Deputy Governor-General, a Royal Commissioner, the Inspector of the NACC or a person assisting the Inspector, or foreign governments (including contract service providers).

Implications for businesses in Australia

Australian businesses should be on notice that, under section 13 of the NACC Act ‘contracted service providers’ (CSPs) fall within the definition of a ‘public official’. A CSP refers to a contractor or subcontractor who provides goods or services (or carries out functions) under a Commonwealth contract.

If your business contracts with a public official or Commonwealth agency or entity, either directly or indirectly, it is critical to be aware of the scope of the NACC, which may extend to your business and its people (to the extent it and they engage with ‘public officials’).

Broad powers – beyond what Australian businesses will be used to dealing with

The NACC has the power to investigate conduct occurring now or in the past and its powers include the ability to compel both witnesses and the production of documents.

Of key consideration is that NACC’s powers include the power to require a person to disclose information that is protected by legal professional privilege (however, such disclosure does not otherwise amount to a waiver of that privilege (see sections 114 and 115 of the NACC Act).

Continue to plan ahead

In an earlier article, we considered what steps businesses can take in preparation for the commencement of the NACC. These include:

• incorporating compliance with the NACC laws into contract risk assessments;
• conducting internal training on matters such as recognising and addressing corrupt conduct when dealing with Commonwealth agencies and public officials, and what constitutes a public official for the purposes of the NACC Act (including that secondees and contractors to Commonwealth agencies fall within this definition);
• implementing internal reporting and policies (particularly whistleblower policies) and procedures to address relevant matters arising from under the NACC Act in the event your business is faced with any allegations or investigations; and
• reviewing current practices to ensure that any interactions with public officials or Commonwealth agencies, as well as the provision of goods or services to them, are free from corrupt conduct.

If you would like to discuss how your organisation can navigate these developments s or have broader regulatory concerns, please reach out to Jonathan Ellis, Jessica Laverty or Julie Cheeseman.