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Director General's Review

This year marks ASIO’s 70th anniversary. Seven decades have passed since Prime Minister Ben Chifley established the Australian Security Intelligence Organisation during the earliest days of the Cold War. On 16 March 1949, ASIO commenced its work with just two employees, one being the inaugural Director-General of Security, Justice Sir Geoffrey Reed. Fast forwarding to 2019, and 13 Directors-General of Security later, ASIO has evolved into a workforce of nearly 2000 people, with officers located across Australia and the world.

The intervening years have been busy for ASIO, with each decade presenting its own unique challenges and defining moments. The Petrov Affair, the imagery and implications of which persist to the present day, was one such defining moment. Terrorist attacks such as the 1978 Sydney Hilton hotel bombing, the 9/11 attacks in the United States, and the Bali bombings were further defining moments where operational priorities dramatically changed. More recently, the challenges of international terrorism, the Islamic State of Iraq and the Levant (ISIL) and Australian foreign fighters, together with the rise in levels of espionage and foreign interference, have tested ASIO’s capacity. Regardless of the decade, these events reveal the very high stakes involved in ASIO’s work.

The one constant over the past 70 years has been ASIO’s resolute focus on protecting Australia from those who wish us harm. This year has been no different—another year of high operational tempo, another year where ASIO has again been at the forefront of confronting Australia’s national security challenges.

Security challenges

To say that we have had good operational success this year is not to say the job is done. The world in which we live is becoming ever more complex, more uncertain and, as a result of globalisation, more ‘connected’ than at any other time in history. The threats of terrorism, espionage and foreign interference recognise no borders. They are persistent, and their enduring nature means we cannot afford to rest on our successes. ASIO works every day to meet these security threats while preparing for the security challenges of the future.

Terrorism

Shifts in the world order continue to unleash forces of change that will be with us for generations. One result is the terrorist threat to Australia has become real and dangerous. This is why our national threat level remains elevated. Readily available weaponry, fueled by malicious intent and inspired, encouraged or directed by like-minded networks overseas, means that Australia-based extremists retain the intent and capability to conduct attacks on Australian soil.

ISIL’s ‘caliphate’ has been crushed and it has lost its safe havens and organised military capability. Remnants of ISIL, however, remain dangerous and will require ongoing attention. Our domestic terrorist threat environment has not significantly improved following the collapse of ISIL. In fact, the threat from home-grown terrorism, coupled with the anticipated attempts by some terrorist fighters to return to Australia, remains a matter of the gravest security concern.

We must now consider those who have travelled to overseas conflict zones and wish to return to Australia. They may take months or even years to return. Those who do will present a longer-term threat, as travellers to the Soviet Afghan war did in decades past.

The recent tragic events in Christchurch, New Zealand, earlier this year have brought the right-wing extremist threat back into focus. This threat is not something new, but current extreme right-wing networks are better organised and more sophisticated than those of the past. Regardless of the different vectors and threats, ASIO’s role in countering terrorism is far from over. At the time of publication, ASIO together with our law enforcement partners have thwarted 16 attacks in the past five years. To date, 93 people have been convicted of terrorism by Australian courts.

Countering espionage and foreign interference

While ASIO’s adversaries may have changed over the past 70 years, the challenges they pose have not. Australia remains a target for acts of espionage and interference by foreign states, who continue to target the government, academia and industry for access to sensitive and valuable information. These acts, which occur on a daily basis, are of unprecedented scale and sophistication. The threat to Australia from foreign states seeking to obtain strategic advantage at our expense cannot be understated.

Ironically, the very technologies that have enabled rapid globalisation are the same technologies that facilitate foreign espionage and interference. Modern, instantaneous broadband communication provides a great vector for cyber intrusions and attacks and facilitates foreign interference in ways not possible in the past.

Partnerships

We live in an increasingly uncertain world, challenged by complex security issues that no agency can manage in isolation. We draw great benefit from working with our long-term partners, who are also grappling with the threat posed by terrorists and foreign powers. Building on these partnerships, we have prevented the flow of foreign fighters into conflict zones, strengthened intelligence-sharing relationships, and increased collaboration on the challenges of foreign interference.

Home Affairs portfolio

After 70 years in the Attorney-General’s portfolio, ASIO moved into the Home Affairs portfolio on 11 May 2018. Such significant administrative and corporate changes naturally create challenges but also opportunities, and ASIO has been fully engaged in the implementation process. The changes have not affected our functions or statutory independence, and have delivered the expected strengthened levels of cross-agency cooperation. We have worked diligently to integrate ourselves and others into our new portfolio and deliver the efficiencies, coordination and results-driven change the Australian Government expects.

Meeting our challenges

Technological breakthroughs—and the use of these advances by those intent on causing harm to Australia—continue at an extraordinary pace and are being increasingly disruptive to our operating environment. ASIO is moving with this wave of technological change to harness new capabilities and develop protections against capabilities that are used against us. Through a major enterprise transformation project, we are positioning ourselves to be at the forefront of agencies utilising artificial intelligence and machine-learning to do business at machine speed in an age of ʻbig dataʼ.

Legislative change

The passage of the Telecommunications and Other Legislation Amendment Act 2018 by parliament on 6 December 2018 represented an important response to these technological challenges. The Act is designed to allow agencies to lawfully access communications and data through a range of measures, including enhanced obligations for industry to assist agencies in prescribed circumstances. The amendments recognise that ASIO and our partners must pursue smarter, more sustainable strategies to counter our adversaries, and that we must take the long view of the challenges confronting us.

Enterprise transformation

In 2018 ASIO commenced a significant Enterprise Transformation Program to implement the recommendations of David Thodey AO’s 2017 report A digital transformation of the Australian Security Intelligence Organisation. This program positions ASIO to take advantage of modern data and technology platforms and equip us with the tools to better respond to changes in our complex security and technology environments.

During the reporting period, ASIO has taken critical steps in the foundational stages of our enterprise transformation. For example, ASIO has approached the open market for the first time to engage with new technology partners, ensuring we are on the cutting edge of digital and technological innovation. We have also established a portfolio management capability to optimise allocation of our resources and investments across the enterprise, and have developed a new operating model to ensure our functions continue to work seamlessly together to deliver security intelligence outcomes. We are embedding an innovation ecosystem in our operating model and portfolio management, and introducing contemporary ways of working to support ASIO’s future as an agile, digitally enabled Organisation.

The roadmap for our enterprise transformation is the ASIO Strategy 2018–23. Launched in October 2018, the strategy sets the direction to realise our vision of delivering trusted intelligence to secure Australia. It works to leverage our unique expertise and capabilities to shape Australia’s security environment and foster institutional resilience to current and future threats.

Performance

We achieved six of the eight performance objectives outlined in our 2018–19 corporate plan. This assessment was confirmed by the findings of our 2019 Stakeholder Survey, which indicate ASIO performed effectively during this reporting period in challenging circumstances. The survey was conducted by an independent reviewer, who sought views on our performance from 74 key interlocutors across government and industry. The survey found ASIO was achieving its purpose, and our advice continues to be highly regarded and in high demand. Importantly, stakeholders commented positively on our willingness to collaborate and to engage with a wider range of stakeholders within government and industry.

Nevertheless, our challenges are significant and we cannot assume they will take care of themselves. Our stakeholders say we need to continue to experiment with bold new ideas, and to be even more agile, pragmatic in our advice and open to experimentation and collaboration.

We partially achieved two of the eight strategic performance objectives set out in our corporate plan for 2018–19. These both fall within our countering espionage, foreign interference, sabotage and malicious insiders key activity. While our work in these areas is well regarded, the higher level of espionage and foreign interference threat—combined with greater awareness among our stakeholders of that threat—has increased demand for our advice and support, which is stretching current resources. With the terrorist threat showing no signs of significantly decreasing, ASIO has limited scope to redirect internal resources to address the increasing gap between demand for our counter–espionage and foreign interference advice and our ability to furnish this assistance.

Our annual performance statement, contained in Part 4 of this report, provides further information on our performance during 2018–19 and the continued value of our work to our national security partners. In relation to our financial performance, the operating environment in 2018–19 continued to be challenging, resulting in ongoing pressure on our resources and sustainability. We continue to review the sustainability of our current operations in light of anticipated future pressures on our operating environment and departmental capital budgets.

Outlook

The forecast for Australia’s security environment is for only more complex challenges and more uncertainty. We expect this will fuel further demand for our advice among our expanding government and private sector stakeholder cohort, while our core business of investigating security threats continues on its own trajectory. ASIO will need to build new capability and capacity to meet current and future demand for our trusted advice and expertise.

In the coming years, as Australia’s security environment presents new challenges, we will necessarily prioritise our finite resources—across our counter-terrorism, counter–espionage and foreign interference, border integrity and protective security advice programs—towards addressing activities of the greatest potential harm to Australians and Australian interests.

Continuing the journey commenced by our predecessors, ASIO’s people will keep on doing their remarkable work, with integrity and propriety.

As the Australian Government determined 70 years ago, ASIO’s ultimate duty remains to secure the nation and keep its people safe. There is no higher priority.

Duncan Lewis AO DSC CSC
Director-General of Security