SPECIAL REPORT August 2015 A web of harms Serious and organised crime and its impact on Australian interests David Connery, Clare Murphy and Hayley Channer Executive summary This special report examines transnational, serious and That’s because dealing with serious and organised crime is organised crime and the harms it causes to Australia’s not a task for government alone: the Australian public and interests. The report aims to encourage a reinvigorated business have key roles. After all, consumer demand creates discussion among Australians about this critical matter. illicit markets that serious and organised crime seeks to supply. Additionally, the internet is increasing the speed, The harms include negative impacts upon individuals and reach and depth of penetration by serious and organised the community and unfair competition for some legitimate crime into the lives of all Australian families and businesses. businesses. Serious and organised crime—whether Simply put, you don’t need to go to nightclubs in red-light transnational or domestic—also imposes costs on Australian districts to meet organised crime: you need go only as far as governments and denies them revenue. What’s more, serious your computer. and organised crime groups acting overseas work against Australia’s foreign policy interests and increase risks to It’s also worth examining better ways to increase the roles of Australians (and others) who live, invest and travel abroad. non-law-enforcement agencies, business and the community There’s an urgent need for the Australian community to in efforts to address serious and organised crime. We should discuss the criminal threats facing it in a more deliberate and bring the full range of social, education, regulatory and broader-reaching way. health instruments into the fight, and subdue the potential ‘Money laundering’ © ASPI. 2 Special Report of internet-enabled financial crime to damage our current illicit goods, fraud and tax evasion, where anonymity makes and future prosperity. International cooperation in this fight it easier for criminals to succeed. is essential, especially given the role of overseas actors in our These acts of commission and omission mean the crime challenge. community pays for this threat every day in taxes, higher Other questions need asking too. Would Australians accept banking charges, internet security, insurance costs and measures similar to those taken to counter terrorism to healthcare premiums—so why aren’t these matters high in combat organised crime? Do we have our illicit drug policy the Australian public’s mind? While crime and corruption settings right? Can a truly national approach to seizing are often issues at state elections (although not at federal unexplained wealth be negotiated? Could governments be ones), and a reasonable proportion of the community says comfortable with judging police performance based on the they feel unsafe due to crime1, serious and organised crime level of harm that’s avoided, rather than metrics such as the is rarely mentioned in surveys about security threats.2 number of arrests? This should change. Last, is it time to enhance the Commonwealth’s The public’s seeming lack of attention to the challenge system for detecting corruption, so that the actions of of serious and organised crime stands in contrast to politicians and their staff, national business entities the Australian Government’s actions. A range of official and non-law-enforcement public servants receive documents, from national security strategies to the greater scrutiny? It’s been argued that without better Australian Crime Commission’s periodic public assessments, arrangements, we simply ‘don’t know what we don’t know’ explain the threat from serious and organised crime. As a about corruption. result, Australian Government approaches to countering it are reasonably broad and innovative, and resources are This analysis of the harms caused by serious and devoted to major criminal cases. But can governments organised crime prompts ASPI’s Strategic Policing and Law do more? Is there room for even greater cooperation Enforcement Program to adopt a research agenda based between the Australian Government and its state and on four key areas of law enforcement: Australian policy and territory counterparts? Are more resources needed to organisational responses; information sharing; international disrupt organised crime? Are there better ways to increase cooperation; and geopolitical change. One priority for work participation by non-law-enforcement agencies, businesses includes identifying ways to promote information sharing and the community in efforts to address serious and between governments, businesses and the community about organised crime? serious and organised crime. This special report aims to encourage a new public discussion Do Australians want more done about about transnational, serious and organised crime, its serious and organised crime? harms, and what Australians should be doing about it. After examining the main harms that serious and organised crime Serious and organised crime—which is both domestic and causes to Australia’s interests, the paper poses some key increasingly transnational—poses real threats to the interests questions to the community, business and government. The of all Australians. This isn’t an idle claim; nor does it aim to questions focus on public awareness, information exchanges, create moral panic. But it is a real problem. national approaches, anticorruption, and the assets available It’s a problem created, in part, by the community’s to fight against organised crime, including international willingness to use illicit commodities and services—which cooperation and capacity building. The report concludes can be as diverse as illicit drugs, counterfeit pharmaceuticals, with four research focus areas for ASPI’s Strategic Policing some forms of offshore betting, and online child sexual and Law Enforcement Program. exploitation. This demand creates markets for some This report is based on interviews with representatives of organised criminals. Other criminal opportunities arise from 18 major business and peak industry bodies, 16 Australian the ability to use the cyber domain, including in areas such as Government and state and territory agencies, two international agencies, and 22 academics and other experts. A web of harms: Serious and organised crime and its impact on Australian interests 3 It was written at the same time that work to update estimates of group structure; older traditional ‘mafia’ style hierarchies of the cost of serious and organised crime in Australia are being joined by looser ‘networks’ involving cooperation was conducted, which is likely to show that these costs between often disparate and transnational groups operating are greater than currently understood. This report makes on different parts of the criminal enterprise. The motivation extensive use of open-source research by the Australian for serious and organised criminals is generally personal Institute of Criminology, Australian and overseas law profit, although criminals can be interested in power, enforcement agencies, and private companies that conduct gratification and self-preservation too. In addition, the research in areas such as fraud and corruption, but there’s following factors usually apply: sure to be more to the picture than is provided here. • Organised crime generally works in illicit markets but it So, despite the evidence available—and because of its exploits legitimate markets too. limitations—it’s not possible to quantify the level of harm • There’s an important financial dimension, particularly that serious and organised crime imposes upon Australian in efforts to launder money, hide criminal wealth interests (counting costs is a different but still complex through complex structures, attack victims’ financial matter). Yet it’s possible to identify the breadth of harms and assets or intermingle legitimate trade and business with often their overall significance to Australia, and so encourage criminal activities. These crimes are often supported the public to think more critically about how serious and by ‘professional facilitators’ with legal, accounting or organised crime affects Australians’ everyday lives. It’s financial expertise. also possible to identify a number of key questions that the public, business and government should ask themselves and • Violence was once considered a key part of serious each other. The report addresses those tasks after defining and organised crime methods but, with the increasing the key subjects. prevalence of the cyber environment as a vector and target for organised criminal acts and major frauds Defining the web that undermine economic strength, that is not always so today.3 There are many definitions of serious and organised crime— around 180, by one count. Some require the presence of an Serious and organised crime can be organised and ongoing criminal activity that uses methods such as money perpetrated solely within one country (i.e. ‘domestic’) laundering, identity crime, violence, corruption and extortion but it’s likely to have overseas, or ‘transnational’, elements to achieve the criminals’ goals. Others are broader, focusing today. Transnational crime involves criminal groups that more on the seriousness of the crime. This special report uses operate in more than one national jurisdiction, or crimes that Australian legal definitions, which means that serious and are prepared in or have effects in