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Director General's Review

The world in which we live continues to be uncertain and often unpredictable. It has become more complex, with the scale and pace of threats continuing to accelerate. In this environment, ASIO works to protect Australia, its people and its interests by collecting and assessing security intelligence, and providing advice to the Australian Government. This advice extends to government agencies and to industry to assist them manage security risks and disrupt harmful activities by individuals, groups and nation states.

During this reporting period, ASIO made a significant contribution to combating terrorism, espionage, foreign interference, cyber and malicious insider–related activities that threatened Australia’s national security.

A major survey of 64 of our federal, state and territory government and industry stakeholders—conducted at the end of this reporting period by an external, independent person with extensive national security experience—concluded that, without exception, ASIO is regarded as an effective, capable and reliable partner offering high-quality and largely unique services.

As the Director-General of Security, I am proud of the efforts of ASIO staff and the staff of federal, state and territory national security partners who have kept Australia and Australians safe. I commend them for their work and their sacrifices in a year that presented significant challenges.

The security and operating environment

During this reporting period, a range of factors contributed to the steadily worsening overall security and operational environment. These factors included:

  • heightened terrorism, espionage and foreign interference threats to Australians and Australian interests, at home and overseas;
  • our unprecedented security intelligence caseload—in terms of both the volume and seriousness of the threats we investigated; and
  • an increasingly complex and resource-intensive operating environment.

Countering terrorism

Since the national terrorism threat level was raised in September 2014, there have been five onshore terrorist attacks targeting people in Australia and 13 disruption operations in response to imminent terrorist attack planning in Australia. All but one of these cases have been linked to or inspired by the Islamic State of Iraq and the Levant (ISIL).

The heightened terrorism threat environment, combined with the trend towards ‘low-capability’ attacks by individuals or small groups requiring limited planning, sustained the high volume and tempo of ASIO’s counter-terrorism investigations and operations. During this reporting period, our security intelligence contributed directly to the disruption by law enforcement partners of three planned terrorist attacks in Australia, as well as the disruption or containment of other terrorism-related activities.

Notwithstanding these successes, the difficulty of identifying preparations for low-capability attacks by individuals or small groups, and the imperative to respond quickly when preparations are detected, placed considerable pressure on ASIO and law enforcement partners’ staff and resources. It is important to reinforce that, due to the nature of these types of attacks, security and law enforcement agencies cannot guarantee that preparations will be detected in time to prevent future attacks.

While low-capability attacks have become more common, complex attacks remained a significant threat during this reporting period. This was demonstrated by the disrupted attack planning in Melbourne in December 2016.

Turning our attention offshore, we saw during this reporting period the tragic loss of Australian lives in terrorist attacks in the United Kingdom and Iraq. This reinforces the global nature of the threat posed by terrorism to Australians and Australian interests.

I am concerned in particular about the terrorist threat in South-East Asia. We must remember that more Australians have been killed in terrorist attacks in Indonesia than anywhere else. The re-emerging threat in the region can be attributed to several factors, including:

  • the ongoing influence of ISIL;
  • the significant number of South-East Asian foreign fighters involved in the conflict in Syria and Iraq and their potential return to the region;
  • the release from prison of a significant number of convicted terrorists who remain capable and influential; and
  • the utility and attractiveness of possible ungoverned spaces in the region—which can be used as safe havens for planning and logistic support by terrorists.

ASIO is supporting a broader Australian Government commitment to work closely with South-East Asian partners to combat violent extremism in the region. This commitment has been displayed most recently by the government’s offer of support to the Philippine Government’s response to the conflict in Marawi.

Throughout this reporting period, ASIO worked closely with our security partners in South-East Asia to counter the threat in the region and will continue to support their efforts, and the Australian Government’s broader strategy of engagement in the region, in 2017–18.

Countering espionage, foreign interference and malicious insiders

Australia continued to be a target of espionage and foreign interference during this reporting period. Foreign intelligence services sought access to privileged and/or classified information on Australia’s alliances and partnerships, our position on international diplomatic, economic and military issues, our energy and mineral resources, and our innovations in science and technology. While the harm from espionage and foreign interference is immediately evident in some cases, in other instances the harm may take years to eventuate. Espionage and foreign interference is an insidious threat—activities that may appear relatively harmless today can have significant future consequences.

During this reporting period, ASIO identified a number of states and other actors conducting espionage and foreign interference against Australia. Our investigations revealed countries undertaking intelligence operations to access sensitive Australian Government and industry information. We identified foreign powers clandestinely seeking to shape the opinions of members of the Australian public, media organisations and government officials in order to advance their country’s own political objectives. Ethnic and religious communities in Australia were also the subject of covert influence operations designed to diminish their criticism of foreign governments. These activities—undertaken covertly to obscure the role of foreign governments—represent a threat to our sovereignty, the integrity of our national institutions and the exercise of our citizens’ rights.

Through our work in the Australian Cyber Security Centre (ACSC), we regularly observed cyber espionage activity targeting Australia. Foreign state-sponsored adversaries targeted the networks of the Australian Government, industry and individuals to gain access to information and progress other intelligence objectives. ASIO provided support to the ACSC’s investigations of these harmful activities as well as the centre’s work to remediate compromised systems. The number of countries pursuing cyber espionage programs is expected to increase, as these programs can offer significant returns with relatively low cost and plausible deniability. As technology evolves, there will be an increase in the sophistication and complexity of attacks.

We remained alert to and promptly investigated threats from malicious insiders—those trusted employees and contractors who deliberately breach their duty to maintain the security of privileged information. These investigations continued to be complex, resource-intensive and highly sensitive. A critical element of our response to this threat has been to conduct targeted outreach with government and industry executives and agency security advisers, to improve their capabilities to detect malicious insiders and mitigate the harm caused by their actions.

Operating environment

Rapid technological change continued to provide people who are engaging in activities that threaten Australia’s security with new tools to conceal their activities from security and law enforcement agencies. The widespread use of encrypted communications by security intelligence targets remains an area of particular concern to ASIO. We provided support during this reporting period to the Australian Government’s examination of policy options to respond to this issue.

Technology offered security and law enforcement agencies new opportunities to identify activities of security concern. Building and maintaining technical collection capabilities to stay ahead of the threats, however, was resource intensive. Transforming existing agency information and communications technology (ICT) infrastructure to effectively exploit new capabilities, manage the large volume and variety of data available, and to be adapted easily to new technologies is a major challenge, and one that will require significant, ongoing investment.

In addition to technological challenges in the operating environment, we faced heightened threats to our staff, facilities and information. This requires the diversion of resources to ensure the security and effectiveness of our operations.

National security partnerships

Close collaboration among Australia’s national security partner agencies has been essential in responding to these security challenges. Collaboration among Australian partner agencies continued during 2016–17 to be at an all-time high. This has included work to progress shared national security objectives through joint agency bodies such as the federal, state and territory Joint Counter Terrorism Teams (JCTT), the National Threat Assessment Centre (NTAC), the Jihadist Network Mapping and Targeting Unit and the ACSC.

ASIO’s international partnerships also remained critical to our work and delivered significant benefits for Australia’s security. We maintained relationships with more than 350 partner agencies in 130 countries. The exchange of information on security threats with our partners contributed to the identification and disruption of planned terrorist attacks, both in Australia and overseas. The sharing and joint development of intelligence capabilities also strengthened our individual and collective abilities to detect, monitor and respond to threats.

Security awareness

Raising awareness of threats to Australians and Australian interests among Australian federal, state and territory parliaments, government agencies, and industry remained a significant focus for ASIO. Security and law enforcement agencies cannot identify and prevent all harmful activities affecting all Australians and Australian interests—finite resources must necessarily be focused on the areas of greatest overall harm. It is important that security risk managers within government and industry understand the threats and take steps to detect and defend against harmful activities.

During this reporting period, I and my senior ASIO colleagues briefed a range of government ministers, parliamentarians and industry leaders on terrorism, espionage and foreign interference–related issues. I addressed a number of forums on security issues, including the Australian Davos Connection and the launch of the Australian Strategic Policy Institute’s counter-terrorism handbook.

ASIO’s security outreach and engagement with government and industry continued through our Business and Government Liaison Unit (BGLU). The unit provided advice to stakeholders through its website, which provides subscriber access to intelligence-informed security advice. The unit also conducted briefing days tailored for at-risk industry sectors, focusing on security threats to aviation, places of mass gathering, defence industry, energy and resources, mass passenger transport, communications, and banking and finance. These briefings were highly valued by government and industry stakeholders.

Our ASIO–T4 Protective Security Directorate (ASIO–T4) provided a range of practical, physical protective security advice to support government and industry security managers, as well as assistance to strengthen the capabilities of our partners’ protective security units.

ASIO’s performance

Overall, ASIO performed effectively during this reporting period in what could be considered challenging circumstances. The major survey of 64 of our federal, state and territory government and industry stakeholders supported this assessment and showed that our work was held in high regard.

Notwithstanding this assessment of ASIO’s performance, we carried considerable risk within our investigative caseload and faced significant resourcing pressures in other areas of our business. These pressures reflect the challenge of simultaneously responding, with finite resources, to two major types of security threat—the terrorism threat, which shows no sign of diminishing, and the espionage and foreign interference threat, which is expanding in its scope and complexity.

During this reporting period, we addressed these pressures by rigorously prioritising our efforts and allocating resources to address the highest sources of threat or potential harm. The practical consequence of this is that we had limited scope to address a range of other known or emerging risks. We will continue to review our priorities to best address risk as we proceed through 2017–18.

Our annual performance statements, contained in Part 4 of this report, provide further information on our performance during 2016–17. A report on our financial performance is provided in Part 4 and our financial statements are provided in Part 6.

Organisational reform

Within ASIO, we continued to progress strategic reforms to ensure we are focused on work that provides clear value for our stakeholders and that we have the right culture, people and systems to effectively achieve the Organisation’s purpose. In July 2016, we launched the ASIO2020 program to progress these reforms. Some of the major issues addressed under the banner of ASIO2020 were:

  • We re-examined our value proposition to better reinforce with our staff, our partners and the public the unique contribution we deliver to protect Australia. This value proposition is now at the heart of our corporate and public communications, exemplified by the launch in July 2017 of our new asio.gov.au website, which explains clearly what ASIO does, how we do it, and why it matters.
  • We placed a strong emphasis on reinforcing a culture of innovation across our Organisation to position us to face the diverse challenges of the future. I appointed our Deputy Director-General for Counter-Terrorism as my Innovation Champion, and we are now supporting a range of ongoing innovation initiatives, programs and networks across ASIO.
  • We reviewed our career management system to ensure we source, recruit, and retain the best people and enable our staff to pursue fulfilling careers. We made progress in developing a competency-based model of career management and the systems required to support our workforce into the future.
  • We also worked to build an enterprise technology program that will enable ASIO to excel in using technology and data to achieve our purpose. Given the increasing opportunities and challenges brought about by rapid advances in technology, it is imperative that ASIO is a ‘data-enabled organisation’, connected to its partners, accountable to the people, innovative in its approach, and sustainable for the long term. During this reporting period, we agreed our strategy and began implementing the actions necessary to take us towards our vision.

In last year’s annual report, I put on record my commitment to achieve gender equity across all levels of ASIO by 2020. As part of this commitment, I joined the Male Champions of Change program, which aims to provide innovative leadership in addressing challenging gender equity issues such as:

  • the low representation of women in senior leadership positions;
  • realising the economic and social benefits of greater female workforce participation;
  • poor take-up and progression of women’s careers in non-traditional sectors; and
  • developing a strong culture of respect, engagement and inclusion for women across our communities.

During this reporting period, I addressed the Public Sector Women in Leadership Conference, conducted ‘listen and learn’ focus groups within ASIO, and attended Male Champions of Change meetings to share experiences and ideas with other senior chief executive officers.

We established the ASIO Diversity and Inclusion Standing Committee, chaired by my Deputy Director-General for Strategy, to develop, implement and review strategies to strengthen diversity and inclusion within ASIO. The committee, which forms part of ASIO’s governance structure, commenced late in this reporting period.

Release of The secret cold war: the official history of ASIO 1975–1989

In October 2016, we were delighted to host the release of the third and final volume of ASIO’s history, authored by Dr John Blaxland and Dr Rhys Crawley. The book was launched by the Attorney-General at ASIO’s headquarters. The launch was attended by former Directors-General of Security as well as a small group of officers who joined ASIO at the Organisation’s inception in 1949.

While at times challenging and confronting, the history of ASIO project has proved to be a rewarding and valuable endeavour for the Organisation. The three volumes have provided the public with insights into the reality of ASIO’s business and, importantly, the personal commitment made by many nameless ASIO officers who have made significant contributions to keeping Australia and Australians safe.

Outlook

Looking forward to 2017–18, an important focus for ASIO will be supporting the establishment of the Australian Government’s new Home Affairs portfolio and implementing the 2017 Independent Intelligence Review recommendations. I believe these measures will play an important role in strengthening our strategic direction, effectiveness and coordination of Australia’s national security and intelligence efforts, at a time when the nation is facing complex, long-term threats to our security.

During the next reporting period, I look forward to working together with national security partners to protect Australia, our people and our interests.

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