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3 Mar 2023

Getting the knack of the NACC – The National Anti-Corruption Commission


Anthony Albanese’s Labour Government on 13 December 2022 kept their electoral promise to reform federal public accountability and passed the National Anti-Corruption Commission Act 2022 (Cth) (Act). The Commission is anticipated to begin in mid-2023.

What are the powers of the NACC?

The NACC will have significant powers to investigate corruption issues in relation to federal agencies. A corruption issue includes whether a person has engaged, is engaging or will engage in corrupt conduct.

The NACC will be able to conduct public inquiries, oversee corruption investigations of other agencies, and investigate public interest disclosures.

These powers will extend beyond those of the South Australian Independent Commission Against Corruption (ICAC) and powers will apply to businesses in the private sector as well as federal agencies. The NACC will also be able to conduct investigations into past conduct and take action against corrupt conduct that occurred before its establishment.

Further, the Act also includes significant whistleblower protections for those who make allegations of corrupt conduct and provide information for the purposes of a NACC investigation. These protections also extend to journalists acting in their professional capacity.

What conduct caught is by the NACC Act?

The NACC Commissioner can investigate corruption issues where the alleged or suspected corrupt conduct is serious or systemic. Where conduct is not serious or systemic, the investigation can be referred for internal review to the organisation from which the conduct arose.

Public officials

Alleged or suspected corrupt conduct by public officials can be investigated under the NACC Act where it constitutes a breach of trust, an abuse of their powers as a public official, or misuse of information obtained in their professional capacity.

Examples of corrupt conduct of public officials include:

  • using public resources to achieve an outcome for which those resources were not intended to be used;
  • influencing more junior public officials to make decisions that benefits a more senior public official or associates; and
  • unauthorised access or distribution of information or documents received in their capacity as a public official.

Third parties

The conduct of any person will be corrupt conduct for the purposes of the Act and can be investigated by NACC where their conduct adversely affects, or could adversely affect, either directly or indirectly:

  • the honest or impartial exercise of any public officials’ powers as a public official; or
  • the honest or impartial performance of any public officials’ functions or duties as a public official.

A third party must not affect a public officials’ exercise of their powers in any way that would result in the public official’s conduct being partial. Examples of conduct that are likely to be considered partial include:

  • failing to undertake a recruitment process in circumstances where it is required;
  • voting in favour of a policy or development on the grounds of an undisclosed financial interest; or
  • making an allocation of grants for the purpose of gaining a political advantage.

What happens when an investigation takes place?

Federal agencies and third parties including those in the private sector, can be compelled to produce information and documentation as a result of a notice to produce, and the NACC can search the premises of Commonwealth agencies and, with a warrant, search the premises of private sector organisations.

The Commissioner may hold hearings for the purposes of furthering the investigation of serious or systemic corrupt conduct. For the purposes of a hearing, witnesses and individuals can be compelled to appear at a hearing and produce documents. A person is not able to seek protection from disclosure on any of the following grounds:

  • protection against self-incrimination;
  • legal professional privilege (other than legal advice given in relation to attendance at the NACC hearing); or
  • breach of confidentiality or other contractual obligation.

Hearings will generally be held in private. However, the Commissioner can determine to hold a hearing in public where the Commissioner determines it is in the public interest and “exceptional circumstances” apply. The Commissioner must report to the Minister on the outcome of any investigation, and in circumstances where it is deemed to be in the public interest, the Commissioner may release that report to the public. As a result, even if a hearing is held privately there is a risk that commercially sensitive information or confidential matters can be made public.

Important takeaways

It is important that businesses who engage with federal agencies are aware that:

  • allegations can be made and information provided to the NACC about alleged corrupt conduct;
  • it can be compelled to give evidence and provide documentation with no privilege or confidentiality protections;
  • the premises of private sector entities can be searched where the Commissioner obtains a search warrant; and
  • confidential and commercially sensitive matters can be made public as a result of either a public hearing or the release of a report to the public and could result in significant reputational and financial damage.

Businesses which may be affected by the Act and implementation of the NACC should consider:

  • reviewing or developing an anti-bribery and corruption policy and implement procedures for staff wide compliance;
  • ensuring its staff are aware of when and under what instructions they are required to disclose confidential information to the NACC in relation to both current and past conduct;
  • developing a plan to respond to any NACC investigations, which acknowledges key contact people and procedures for disclosing documentation and information; and
  • ensuring policies and procedures for making internal complaints are known to staff members including developing and reviewing whistleblowing policies.

This article provides general commentary only. It is not legal advice. Before acting on the basis of any material contained in this article, seek professional advice.

Author: Narisse Fechner

Position: Lawyer

Practice: Transactions


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