Chapter 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.
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.
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 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 organisations outside Australia, in so far as they affect Australia's security, 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.
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.
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 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.
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.
Australia has a unique framework of intelligence agencies. Just as our constitution benefits from influences from Britain and the United States, some of the roles and structures of Australia's intelligence agencies have been borrowed, but they have developed into a uniquely Australian model over the past sixty years.
The current structure, responsibilities and processes of the AIC resulted from, or were refined by, a series of major inquiries: two Royal Commissions conducted by the late Justice Hope in the 1970s and 1980s, a major inquiry into the Australian Secret Intelligence Service by Justice Samuels and Mr Michael Codd in the early 1990s as well as two major reviews undertaken by Mr Sandy Hollway and Mr Dennis Richardson early in the same decade. This Inquiry was informed greatly by the outcomes of these earlier reviews.
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.
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:
- intelligence gained through contact between people (human intelligence or 'humint')
- 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 Office of National Assessments and the Defence Intelligence Organisation. What distinguishes these agencies from others who do analysis is that their intelligence analysts have access to information from all sources-covert sources and overt sources.
While intelligence information is important, and often vital, to assessment, it is normally not the main source of information used by intelligence assessment agencies. Open sources - newspapers, television, radio and the internet - and diplomatic reporting from Australian embassies, high commissions and consular offices provides the greater part of the information available to the Australian Government.
Information from open and diplomatic sources is significantly less expensive to collect than is covert intelligence. Public sources also contain much of the key information required by government analysts. For reasons of principle and practicality, open and diplomatic sources should be exploited fully before information is sought from secret intelligence. Intelligence agencies are therefore the information collectors of last resort. But some information cannot be obtained from open sources or diplomatic reporting.
Even the most democratic and open countries hold some information very close, and dangerous non-state actors are typically closed to understanding through overt collection methods.
For all its value, intelligence is only one of a range of factors that influences the policy decisions of governments, and it is rarely the decisive factor. Commentators can sometimes ascribe an importance to intelligence as a factor in decision-making that fails to recognise the range of broader considerations, such as strategic issues, political and economic objectives, long-standing alliance relationships, legal considerations or other interests that might determine policy.
What intelligence can do
The ways in which intelligence can serve government are wide-ranging and fluid. Some enduring features, however, are clear. Intelligence can, in conjunction with other sources, provide:
- warning, notably of terrorist plans, but also of potential conflicts, uprisings and coups
- understanding of the regional and international environment, with which Australian decision-makers will need to grapple
- knowledge of the military capabilities and intentions of potential adversaries, a vital ingredient in defence procurement and preparedness
- support for military operations, minimising casualties and improving the environment for operational success
- support for an active and ambitious foreign, trade and defence policy.
Intelligence can provide vital clues about the intentions of others (eg military plans) and the ambitions of adversaries (eg negotiating positions in political or trade disputes)
- and beyond these vital roles of intelligence in providing information, modern intelligence can be a more active tool of government - disrupting the plans of adversaries, influencing the policies of key foreign actors and contributing to modern electronic warfare.
In so far as it seeks to forecast the future, assessment based on intelligence will seldom be precise or definitive. This is particularly so when it seeks to understand complex developments and trends in future years. Greater precision is sometimes possible in relation to intelligence's warning function - highlighting the possibility of a specific event in the near term future (eg a terrorist attack). But even in this field, precision will be hard to achieve. Intelligence will rarely provide comprehensive coverage of a topic. More often it is fragmentary and incomplete.
The history of major intelligence failures - the failure to detect plans for the World Trade Centre attack in 2001, Iraq's intention to invade Kuwait in 1990, the imminent collapse of the Berlin Wall in 1989 or, much earlier, the failure to anticipate the strength of Turkish forces in the Dardanelles in 1915 or Japanese plans for Pearl Harbour - provide a cautionary lesson for any policy-maker who believes intelligence is always accurate or that it can provide guarantees.
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