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Director General's Review

In 2017–18 we saw the significant challenges posed by espionage and foreign interference come to prominence in Australia in public and parliamentary debates. It was an important debate for the nation, and one that ASIO—as the nation’s security service responsible for protecting Australia from these threats—welcomed. Espionage and foreign interference represent a serious threat to Australia’s sovereignty and security and the integrity of our national institutions. Foreign actors are aggressively seeking access to privileged and classified information on Australia’s alliances and partnerships; position on international diplomatic, economic and military issues; energy and mineral resources; and innovations in science and technology. They are also attempting to clandestinely influence the opinions of members of the Australian public and media, Australian Government officials, and members of Australia-based diaspora communities.

During this reporting period, ASIO continued to discover, investigate and disrupt harmful espionage and foreign interference affecting Australia’s national interests. We worked with Australian Government policymakers and provided advice to support parliament’s consideration of legislative measures to strengthen Australia’s efforts to counter these threats. The passage of the National Security Legislation Amendment (Espionage and Foreign Interference) Act 2018 and the Foreign Influence Transparency Scheme Act 2018 represents a significant reform that will assist ASIO and our law enforcement partners to more effectively respond to harmful espionage and foreign interference, including through prosecution, and provide greater public transparency of foreign influence in Australia.

The July 2017 disruption of a plot to use an improvised explosive device against an Etihad flight departing Sydney and a potential plot to use toxic gas in a terrorist attack (Operation Silves) reinforced the persistent and serious nature of the terrorist threat to Australians and Australian interests. In addition to identifying a key individual involved in the plot and providing support for the disruption by law enforcement agencies, ASIO provided a wide range of assessments and advice to assist regulators, policymakers and industry develop improved aviation, air cargo and international mail security arrangements. We also worked closely with law enforcement partners to successfully disrupt a separate plot to conduct a terrorist attack in Melbourne.

Terrorism also remained a significant security issue beyond our shores in 2017–18, despite the welcome decline in the Islamic State of Iraq and the Levant’s (ISIL) capability in Syria and Iraq. In Australia’s immediate region, we saw a pro-ISIL Indonesian network conduct the deadliest terrorism campaign in Indonesia in over a decade. In the Philippines, the ISIL-backed seizure of territory in the southern Philippines city of Marawi from May to October 2017 was the first time ISIL had held territory outside the Middle East and Africa. ASIO continued to provide advice and assessments to inform Australian Government efforts to support our regional security partners. On 8 September 2017, we provided an assessment that underpinned the proscription of Islamic State—East Asia (IS-EA) under the Criminal Code Act 1995. The proscription of IS-EA criminalises a range of activities that would provide support to the group and enables the prosecution of Australians undertaking activities on behalf or in support of the organisation.

A significant undertaking for ASIO during this reporting period was supporting security planning and accreditation for special events held in Australia, including the Gold Coast 2018 Commonwealth Games (GC18) and the ASEAN–Australia Summit. As part of this work we conducted over 70 000 assessments of individuals requiring accreditation for the events.

Movement into the Home Affairs portfolio

On 11 May 2018, ASIO officially transitioned into the Home Affairs portfolio. Within the portfolio, ASIO remains an independent statutory authority, operating under the Australian Security Intelligence Organisation Act 1979.

This move was an historic change for ASIO, having been in the Attorney-General’s portfolio since the Organisation’s inception in 1949. Along with the formation of the Office of National Intelligence (ONI), the creation of the Home Affairs portfolio reflects the need for Australia’s security apparatus to become increasingly integrated and flexible to respond to the complex security issues facing the nation. The new arrangements provide an opportunity to further strengthen existing high levels of cross-agency cooperation on counter-terrorism, countering foreign interference and border security issues.

Transformation

In 2017, I commissioned Mr David Thodey AO to conduct a review of our approach to technology and its relationships with our approach to people, culture and collaboration. Mr Thodey’s report, A digital transformation of the Australian Security Intelligence Organisation, recommended that we change our business model to capitalise on the benefits of augmented decision-making and data science; establish a strong, digitally enabled culture; reform our human resources practices; establish strategic partnerships with industry, academia and government; and strengthen innovation within the Organisation.

In line with the review’s recommendations, during this reporting period we commenced preparations for a major transformation to ensure ASIO remains fit for purpose in an increasingly complex security and operating environment.

Performance

We achieved or substantially achieved eight out of nine of the performance objectives outlined in our 2017–18 corporate plan. This assessment of our performance was confirmed by responses in our 2018 annual stakeholder survey. The survey was conducted by an independent senior reviewer with extensive national security experience, who interviewed 74 senior stakeholders from 66 federal, state and territory government bodies; industry; and academia. The reviewer found that ASIO:

  • continues to be highly regarded as an effective partner offering high-quality and largely unique services; and
  • is perceived as a very credible organisation, with officers that are customer-focused, well trained and professional.

We partially achieved one performance objective relating to foreign intelligence collection. This assessment of our performance recognises that, while our stakeholders valued our contributions in this area, we could not meet all of their requests to collect foreign intelligence.

The annual performance statements in part 4 of this annual report provide further detail on our achievements during 2017–18 and the value of our work to our national security partners.

In relation to financial performance, ASIO achieved a small surplus of $0.972 million (excluding depreciation), which represents 0.2 per cent of our budget (see the report on financial performance in part 4). In 2018–19 we will review and further consider the sustainability of our current operations in light of our anticipated future operating environment and significant pressures on our operating and departmental capital budgets.

Outlook

Australia’s security and operating environment will remain complex and challenging for the foreseeable future, with heightened terrorism, espionage and foreign interference threats compounded by rapidly changing technologies that assist adversaries to cause harm, conceal their activities and uncover our efforts to discover them.

The implementation of ASIO’s organisational transformation program will be a major priority in 2018–19. The transformation will play a vital role in ensuring ASIO stays ahead of the security threats facing the nation. We will work with our Home Affairs and our national security partners to ensure our collective knowledge and capabilities continue to be effectively coordinated and deployed to safeguard Australians and Australian interests. We will also contribute to the Comprehensive Review into the Legal Framework of the National Intelligence Community, led by former Director-General of Security Mr Dennis Richardson AO, to inform that review’s consideration of whether Australia’s intelligence legislation remains fit for purpose.

Our core business—identifying and investigating security threats, and providing security intelligence and advice to our national security partners in federal, state and territory governments; law enforcement; industry; and academia—will continue at a fast tempo. The increased awareness of the espionage and foreign interference threat has come with an increasing demand from partners for ASIO assessments and advice. We will continue in 2018–19 to build our capability and capacity to service this growing demand.