Don Dale royal commission demands sweeping change – is there political will to make it happen?


Sophie Russell, UNSW and Chris Cunneen, UNSW

The Royal Commission into the Protection and Detention of Children in the Northern Territory’s final report, which was handed down on Friday, revealed “systemic and shocking failures” in the territory’s youth justice and child protection systems.

The commission was triggered following ABC Four Corners’ broadcasting of images of detainee Dylan Voller hooded and strapped to a restraint chair, as well as footage of children being stripped, punched and tear-gassed by guards at the Don Dale and Alice Springs youth detention centres.

The commission’s findings demonstrate the need for systemic change. However, the commission will not, in itself, bring about that change. Its capacity to make lasting change lies with the government implementing its recommendations.

What did the commission find?

The commission found that the NT youth detention centres were not fit for accommodating – let alone rehabilitating – children and young people.

It also found that detainees were subjected to regular, repeated and distressing mistreatment. This included verbal abuse, racist remarks, physical abuse, and humiliation.

There was a further failure to follow procedures and requirements under youth justice legislation. Children were denied basic human needs, and the system failed to comply with basic human rights standards and safeguards, including the Convention on the Rights of the Child.

The commission also found that the NT child protection system has failed to provide appropriate and adequate support to some young people to assist them to avoid prison.

Importantly, the commission found that isolation “continues to be used inappropriately, punitively and inconsistently”. Children in the high security unit:

… continue to be confined in a wholly inappropriate, oppressive, prison-like environment … in confined spaces with minimal out of cell time and little to do for long periods of time.

What did the commission recommend?

Based on these findings, the commission recommended wide-ranging reforms to the youth justice and child protection systems.

Not surprisingly, a central focus of the recommendations relate to detention. They ranged from closing the Don Dale centre to significant restrictions on the use of force, strip-searching and isolation, and banning the use of tear gas, spit hoods, and restraint chairs.

There is a focus on greater accountability for the use of detention through extending the Commissioner for Children and Young People’s monitoring role. Recommendations also cover health care (including mental health and fetal alcohol spectrum disorder screening), education, training, and throughcare services for children exiting detention.

Among its suite of proposed reforms, the commission recommended developing a ten-year strategy to tackle child protection and prevention of harm to children, and establishing an NT-wide network of centres to provide community services to families.

Youth justice reforms include improving the operation of bail to reduce the unnecessary use of custodial remand; expanding diversionary programs in rural and remote locations; and operating new models of secure detention, based on principles of trauma-informed practice.

Adequate and ongoing training and education for police, lawyers, youth justice officers, out-of-home-care staff and judicial officers in child and adolescent development is also recommended.

The commission also emphasised the importance of developing partnerships with Indigenous organisations and communities in the child protection and youth justice systems. Several organisations in written submissions to the commission identified the importance of appropriately resourcing community-controlled, and locally developed and led, programs for Indigenous young people.

Increasing the age of criminal responsibility a good place to start

One of the commission’s most significant recommendations is to increase the minimum age of criminal responsibility to 12 years, and only allowing children under 14 to be sentenced to detention for serious offences.

If this recommendation were to be implemented it is likely to have far-reaching implications across Australia. Currently, the minimum age is ten years in all states and territories.

Of particular relevance to the commission is the adverse affect of a low minimum age of criminal responsibility on Indigenous children.

The majority of children under the age of 14 who come before Australian youth courts are Indigenous. In 2015-16, 67% of children placed in detention under the age of 14 were Indigenous. This concentration is even higher among those aged 12 or younger.

Nationally, 73% of children placed in detention and 74% of children placed on community-based supervision in 2015-16 were Indigenous.

Raising the minimum age of criminal responsibility opens the door to responding to children’s needs without relying on criminalisation, given its short- and long-term negative impacts.

It enables a conversation about the best responses to children who often – as the commission’s findings acknowledged – have a range of issues. These can include trauma, mental health disorders and disability, coming from highly disadvantaged backgrounds, having spent time in out-of-home care, and – particularly among Indigenous children – being removed from their families and communities.

The ConversationA positive outcome from the commission will require political will and leadership to respond effectively to broader systemic issues. Raising the minimum age of criminal responsibility is a good place to start.

Sophie Russell, Research Associate, UNSW and Chris Cunneen, Professor of Criminology, UNSW

This article was originally published on The Conversation. Read the original article.

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It’s time for a royal commission into banking regulation


Pat McConnell, Macquarie University

The handling of recent financial scandals show that regulators are confused about what they do, or should do. And as a result the regulation of the financial system, which is vital to a strong functioning economy, is just not working effectively.

We can see the problem in the recent testimony to the House Economics Committee. Recounting the sequence of events that led the Commonwealth Bank to inform regulators of the alleged breaches of money-laundering legislation, CBA Chair Catherine Livingstone said:

We were having board meetings at the time I was being called to Canberra by the Treasurer. When the board meeting, which went over multiple days, finished, which was lunchtime on the Wednesday, I immediately phoned the other two regulators, ASIC and APRA.

This raises a raft of questions. Having known about the allegations of money laundering since 2015, why did CBA not inform the regulators until August 2017? Why did the treasurer warn CBA before CBA talked to the two regulators? When did the Treasurer first hear of the money-laundering breaches? And why did the treasurer not instruct AUSTRAC (an agency of the Attorney General’s department) to inform ASIC and APRA?

In a previous parliamentary hearing, Greg Medcraft, Chairman of ASIC, had said:

I met two days before with the chairman of the Commonwealth Bank, the chair of risk and the chair of the audit committee… There was no mention of what happened. Then I saw the announcement and, about a week later, the chair called me in to apologise. Timeliness and transparency are big issues in this one

So, either ASIC and/or APRA were aware of the allegations of money laundering at CBA and took no action until prompted by the treasurer, or the communications between the various agencies of government are not working as planned. Either way, this is no way to regulate a modern financial system.

Even more regulatory confusion

Just as he is due to leave his role as head of ASIC, Greg Medcraft managed to end two high profile cases with modest wins.

Both ANZ Bank and NAB have settled with ASIC for their parts in manipulating the BBSW intereset rate benchmark. Although the settlement remains to be approved by the Federal Court.

Westpac remains the hold out, and the prosecution’s case has opened in the Federal Court.

But in the euphoria at ASIC, a niggling question remains – what about the Commonwealth Bank?

For some time, Medcraft has warned that action against CBA had not been ruled out and that information was being gathered. Recently Medcraft confirmed that the regulator had “plenty of time” to take action against CBA.

This also raises a number of questions. Not least why ASIC has not filed claims against CBA or announced that there would be no action taken against the bank. If CBA has no case to answer then ASIC should come out and exonerate the bank and relieve its long-suffering shareholders.

But if CBA has even a minor case to answer, and the regulator has held off hoping that the bank would settle without going to court, then ASIC may have been much too clever for their own good.

As a result of a shareholder action following the alleged money-laundering scandal, ASIC is now looking at whether the CBA board “complied with continuous disclosure laws when it decided not to alert investors to the suspicious behaviour”.

This leaves ASIC in an extremely difficult position – looking at a possible failure to disclose the money-laundering scandal at CBA, while at the same time hinting that CBA may have done the same thing with BBSW.

But ASIC is not the only regulator to be operating in the dark. The latest Banking Executive Accountability Regime (BEAR) legislation only adds to the confusion on how best to regulate financial services.

When questioned in recent Senate Estimates about the regulatory impact statements that have been done for new BEAR legislation, Helen Rowell, deputy Chair of APRA, replied that she personally had “not seen them; I couldn’t say whether anyone else within APRA has seen them”.

This is despite the fact that APRA has been given an extra A$40 million over four year to handle the new legislation – for what, and where did this figure come from?

Again, this is no way to regulate a banking system. The confusion around what regulators do and how they do it, must be sorted out.

Where next?

The most obvious answer to clearing up this mess is to initiate a royal commission that looks specifically at banking regulation. In particular, what form a modern banking regulation system should take; which regulators should do what; what the responsibilities of parliament, ministers and regulators should be; and how regulators should share information and tackle common problems (such as banking culture).

Such a royal commission should concentrate on clearing up issues of regulatory philosophy, structure, legal requirements and administration. Whether or not there is an all-purpose banking royal commission, the failures in the current system have to be remedied.

Of course, the government has only got itself to blame for getting in this mess.

The government’s own Murray Inquiry into the Financial System made a recommendation that could have helped. The inquiry recommended the establishment of a new Financial Regulator Assessment Board (FRAB), which would:

advise government annually on how financial regulators have implemented their mandates. Provide clearer guidance to regulators in Statements of Expectation and increase the use of performance indicators for regulator performance.

Sounds sensible? Not to the government, as it chose to accept all of the major recommendations of David Murray’s inquiry except for this one.

And, instead of having one professional body that looks at the performance of regulators, there has been a nonstop procession of “independent” inquiries, by banks themselves, the banking industry and even regulators. No big picture, just a patchwork of unconnected recommendations. And undoubtedly more to come.

The ConversationAn opportunity missed.

Pat McConnell, Visiting Fellow, Macquarie University Applied Finance Centre, Macquarie University

This article was originally published on The Conversation. Read the original article.

Allegations against the CBA show the need for a Royal Commission into the banks


Thomas Clarke, University of Technology Sydney

The Commonwealth Bank is facing another scandal as the Australian Transactions Reports and Analysis Centre (AUSTRAC) launches civil proceedings accusing the bank of being complicit in money laundering.

This exposes a deeply worrying prospect, that the Australian public are vulnerable to crime and terrorism directly funded through the Australian banking system.

AUSTRAC alleges CBA breached the Anti-Money Laundering and Counter-Terrorism Financing Act (2006) 53,700 times since 2012, where transactions were not reported by the bank, or reported too late. The bank faces a potential penalty of A$18 million per breach, which could amount to billions of dollars.

According to AUSTRAC, criminals deposited cash, amounting to tens of millions of dollars, over a period of two years in intelligent deposit machines where it was automatically counted and credited instantly to the nominated recipient account. The funds were then available for immediate transfer to other accounts both domestically and internationally.

In their evidence AUSTRAC details how four identified criminal syndicates were able to readily use CBA ATMs to breach the A$10,000 transaction threshold on 1640 occasions amounting to A$17.3 million. A total of A$625 million of suspicious transactions flowed through these CBA ATMs.

CBA’s response to these serious allegations is that it reports 4 million transactions to AUSTRAC per year contributing to the effort to “combat any suspicious activity as quickly and efficiently as we can.” The bank insists all key personnel have been trained in compliance with the Money-Laundering Act. The CBA acknowledges there was a software fault with a number of their ATMs which allowed these transactions to take place, but apparently this took several years to fix.

Unfortunately this response in the circumstances only provokes further questions.

Regulators asleep at the wheel

What this really shows up is the government’s “light touch” regulatory approach which translates into soft touch regulation. It seems regulators in Australia are too frightened to take action even when there is mounting evidence of illegality.

AUSTRAC itself did not launch any proceedings under the Anti-Money Laundering and Counter-Terrorism Financing Act until 2015. This followed a lengthy report of the Financial Action Task Force which concluded:

[AUSTRAC’s] graduated approach does not seem to be adequate to ensure compliance.

Since then AUSTRAC has taken action against Tabcorp on a money-laundering case which reached a A$45 million settlement in February 2017. This contrasts with far larger fines imposed on international banks for money laundering including a US$1.2 billion fine for HSBC and a US$262 million fine for Standard Chartered in 2012 from the US Justice Department.

At a US Senate hearings in 2012, a HSBC chief compliance officer famously quit his post on the spot in answering money laundering allegations, implying he could not defend the indefensible.

The Australian banking industry has faced minimal pressure to reform compared to other countries, where the restructuring of the banks is progressing. Australia has seen a succession of inquiries however each has focused on particular aspects of the banks functioning and proposed specific reforms.

It will require a Royal Commission into the Australian banks to examine the structural and systemic failures of the banks. The banks have become the main providers of not only retail but investment banking, insurance, superannuation and financial advice, and this deserves critical scrutiny.

If the AUSTRAC allegations against the CBA are proven in the Federal Court, this matter is of a different order of magnitude to earlier problems. It suggests a degree of irresponsibility which is unacceptable in major financial institutions.

It also suggests it’s deeply embedded in the banks cultural and operating processes, which undermines the security of Australian citizens. This would demand a substantive inquiry into the management, integrity and culture of the banks that only a Royal Commission could provide.

The ConversationIn the meantime, the CBA needs to provide firm evidence to the Australian public that none of its ATM machines can continue to be used for money laundering. It also needs to prove there are procedures in place for ensuring all suspicious banking activity by potential criminals or terrorists is fully reported to the Australian authorities as soon as the CBA has any knowledge of such activity.

Thomas Clarke, Professor, UTS Business, University of Technology Sydney

This article was originally published on The Conversation. Read the original article.

For whom the Pell tolls: what did we learn from George Pell’s royal commission appearance?


Timothy W. Jones, La Trobe University

Cardinal George Pell returned this week to the Royal Commission into Institutional Responses to Child Sexual Abuse in relation to the Ballarat and Melbourne case studies.

Giving evidence over the course of four days, via video link from Rome, Pell modified slightly his previous public positions. But, fundamentally, he insisted that he knew little, and fulfilled his duties in relation to what he did know.

On several occasions, counsel assisting the royal commission suggested that Pell’s claims to be ignorant of child sex offending in various contexts was implausible. If everyone around Pell knew, how could he not have known?

The forms of denial

One of the most important lessons we have learnt from Pell’s appearance is the church was – and still is – in a state of denial. It is in denial about the harms of sexual abuse, and about the adequacy of its responses to allegations of abuse.

Being in denial is a curious thing. In denying something, you implicitly admit that there is something to deny.

The late sociologist Stanley Cohen examined this phenomenon in his last book. Cohen argued that we have myriad techniques of keeping disturbing knowledge at bay: there are many ways of not knowing.

The simplest is literal denial. We saw plenty of this from Pell. He repeatedly said that he never knew of allegations of abuse; that he never heard rumours of Gerald Ridsdale’s offending when they shared a presbytery in Ballarat.

Even less plausibly, Pell claimed that advisors and colleagues deliberately kept information from him. As journalist David Marr wrote, Pell was apparently:

… hoodwinked decades ago by an archbishop, a bishop, his colleagues and even the Catholic Education Office.

A more nuanced way of avoiding knowledge is interpretive denial. This involves keeping knowledge at a distance by accepting a fact but giving it a different interpretation.

So, when questioned about his time as a consultor in Ballarat, Pell insisted that paedophilia was never mentioned in discussions of why priests were being moved unexpectedly between parishes. Many of his fellow consultors knew that child sex offences had been committed, and “homosexuality” may have been mentioned as the reason for the priest’s removal.

But Pell, incuriously, chose not to see the possibility that the homosexual conduct may have been intergenerational. He asked no questions, and admitted:

It was a sad story and of not much interest to me.

The most disturbing form of denial on display in Pell’s four days of testimony, however, is implicatory denial: a refusal to see the legal and moral implications that follow from information.

Pell went to great lengths to explain that, in almost all cases, he did everything that was appropriate to his role at the time. He was repeatedly challenged by counsel assisting and the commissioner, Peter McClellan, that a priest might have a moral responsibility that exceeds the literal duties assigned to their role. But Pell rejected this proposition:

He has a moral responsibility to do … what is appropriate to his position.

Pell claimed that in his positions as priest, consultor and auxilliary bishop, he did all that was appropriate to his position. He simply reported any allegations that he thought were plausible to his superiors. That they neglected their duties was not his responsibility.

What chance of change?

Pell may be right that that the lion’s share of blame for the gross miscarriages of justice being examined by the royal commission should be laid at the feet of his dead and dying former superiors. But what is also emerging is graphic evidence of the dysfunctionality of Catholic governance on this issue.

As my research has shown, Roman Catholic canon law – ironically – has the oldest and most clearly articulated legal provisions for the prosecution of sexual offences against children. Yet the enactment of these provisions is entirely in the diocesan bishop’s hands.

A diocesan bishop has a fundamental conflict of interest in the discipline of clergy in their diocese. He is simultaneously responsible for the pastoral care of the priest and for their punishment. This contravenes a basic principle of natural law – that no-one should be a judge in their own case.

If church authorities had believed the children’s allegations, investigated them and kept records of those investigations, it is possible that offending priests could have been removed and disciplined. Instead, allegations were regarded as implausible, offending priests’ denials were believed, and records were destroyed.

And where allegations were too stark to be denied, the gravity of the offending was denied, and priests were sent for “counselling” and relocated.

It is evident that Archbishop Frank Little and Bishop Ronald Mulkearns neglected their responsibilities and even contravened canon law in their dealings with sexually offending clergy. But Pell’s claims to have fulfilled his moral responsibility in the face of this dysfunction ring hollow.

Pell chose to keep knowledge of his fellow priests’ offending at bay and allowed his superiors’ neglect and malpractice to continue. After the exposure of this legal dysfunction and moral cowardice, we can expect the royal commission’s recommendations will include changes to Roman Catholic governance and canon law.

The Conversation

Timothy W. Jones, Senior Lecturer in History, La Trobe University

This article was originally published on The Conversation. Read the original article.