There are better ideas on how to run an ICAC and NSW could learn from other states

South Australia is now well ahead of NSW in protecting innocent people who are caught up in inquiries by its Independent Commission Against Corruption.

Both states have plenty of innocent people who have been hurt by these agencies. Yet South Australia has made changes while some of those in NSW cannot even understand the nature of the problem.

South Australia’s parliament unanimously approved amendments in September that replace the relatively benign reviewer of ICAC with a powerful independent inspector who will provide a real check on this agency.

The inspector will have the power to provide remedies whenever people caught up in ICAC’s inquiries suffer undue prejudice to their reputations.

The remedies include publication of statements and recommending the payment of com­pensation by ICAC.

This, according to a parliamentary report on the changes, means the inspector can publish a retraction – something that will be anathema to those who believe these commissions are infallible.

The South Australians are also considering going further by introducing a formal “exoneration protocol” – something that a ­recent NSW report has dismissed as “misguided” despite being endorsed by two former inspectors of ICAC and the Rule of Law ­Institute.

Parliamentary inquiries in both states have shown that these agencies inflict serious reputational and financial harm on the innocent.

Examples are outlined in the reports last month of the South Australian select committee on damage, harm or adverse outcomes resulting from ICAC investigations; and an equivalent report by the NSW parliamentary committee that oversees that state’s commission.

The report of the NSW committee, chaired by Tanya Davies, is weak. This committee seems incapable of accepting that everyone is entitled to a presumption of innocence until that presumption is displaced by a court, not a ­commission.

In a move that should send a chill down the spines of innocent people, the Davies report ­accepts that “some reputational impact is unavoidable” if ICAC is to investigate and expose corruption.

Yet it also says the committee was “concerned to hear allegations about previous ICAC counsel assisting co-operating with the media for headlines and conducting combative and emotionally charged public inquiries”.

The Davies report endorses last year’s findings by ICAC inspector Bruce McClintock SC, who examined the conduct of former counsel assisting Geoffrey Watson SC, who is now a director of the Centre for Public Integrity.

“The committee reiterates its support for the inspector’s audit and his findings,” the Davies report says.

This committee seems to believe that reputational damage should be inflicted whenever ICAC considers this to be warranted. Here’s what’s wrong with that approach:

In this country, and comparable jurisdictions abroad, those who adhere to the laws enacted by parliament and applied by independent courts are entitled to go about their business safe in the knowledge that they have done nothing wrong. That is the foundation of liberty in a nation governed by the rule of law.

ICAC is not a court and has a jurisdiction confined by a notoriously vague statutory definition of corruption.

It is incapable of ruling that laws have been broken and would be trampling on the turf of the courts by imposing penalties on people whose guilt or innocence has not been determined.

Yet consider what happens in NSW. For innocent people, the destruction of a reputation by a declaration of corruption by a mere commission is a penalty of utmost severity – particularly when NSW does not permit the merits of such a penalty to be tested on appeal. By accepting that the imposition of such a penalty by a non-court is “unavoidable”, the Davies committee has shown itself to be no friend of freedom under the law.

The contrast with South Australia is sharp. The power of SA’s new inspector to ease “undue prejudice” to anyone’s reputation that is caused by ICAC is outlined in an extensive new Schedule 4 in the ICAC Act.

The inspector can publish “any statement or material that the inspector thinks will help ­alleviate the prejudice; or recommend that the commission … pay an amount of compensation”.

But the select committee of the SA Legislative Council, led by SA Best’s Frank Pangallo, wants to go further. Its report recommends the introduction of a “publication protocol and exoneration protocol” that would be available not just at the conclusion of an ICAC investigation, but after prosecutions at which no adverse findings are made.

The names of those concerned would be published “in a prominent publication, on annual reports and on the ICAC website attesting to that fact”.

This is stronger than the NSW committee’s approach. It merely recommends that ICAC publish with each report a table of people involved indicating whether they were the subject of an adverse finding, a corruption finding or appeared as a witness.

The changes in SA respond to a series of scandalous cases in which innocent people were named, shamed and in some cases financially and professionally ruined.

One of those cases involved an 18-month ICAC investigation into allegations that two executives at a government agency took an improper taxpayer-funded trip worth $1000. When the matter came to court, the Magistrate’s Court found there was no case to answer. One of the executives told the committee she had to sell her home to pay legal costs of more than $100,000.