REPORT OF THE INQUIRY INTO july 07 2004 2004 07 2004 australian intelligence agencies 07 2004 07 2004 07 2004 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 contents contents 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 v chapter chapter 1 1 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. 1 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) report of the inquiry into DIO provides all-source intelligence assessment at the national level to support Defence decision-making and the planning and conduct of Australian Defence Force operations. DIO also maintains a range of intelligence databases for use by Defence and the Australian Defence Force. AUSTRALIAN SECRET INTELLIGENCE SERVICE (ASIS) ASIS is Australia’s overseas human intelligence collection agency. Its primary function is to obtain and distribute intelligence, not readily available by other means, about the capabilities, intentions and activities of individuals and austra organisations outside Australia, in so far as they affect Australia’s security, lian intelligence agencies foreign relations or national economic well-being. DEFENCE SIGNALS DIRECTORATE (DSD) The two principal functions of DSD are the collection, production and dissemination of signals intelligence, and the provision of information security products and services to the government and the Australian Defence Force. 2 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 1979 defines ‘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 introduction in July 2003. Further, the Inquiry examined a number of the matters raised by Lieutenant Colonel Collins in his letter to the Prime Minister of 18 March 2004. Some of Lieutenant Colonel Collins’ concerns (for instance relating to his career in the Army) are not relevant to the subject matter of this Inquiry. 3 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