How will a Parliamentary Compliance Officer in NSW Parliament affect you?

By Dr Ashley Tsacalos, Lycia Hayes and Helen Zhang
23 Dec 2020
The establishment of the Parliamentary Compliance Officer means, more than ever, it is important for NSW Government employees to diligently comply with their record-keeping obligations, all probity and disclosure requirements as well as all relevant workplace obligations.

In the past 12 months, we have seen an increased call for greater transparency within Government across both State and Commonwealth Governments. In NSW, we have witnessed the unprecedented increase in the passage of Standing Order 52s compelling the production of Government documents, calls for greater accountability of actions of Senior Government Executives (as evidenced from the icare investigation) as well as increased scrutiny of both Ministers and their advisers (as demonstrated by the Operation Keppel inquiry in the Independent Commission Against Corruption (ICAC)). Following this, it is not surprising that on 17 November 2020, the NSW Legislative Council (or Upper House) passed a motion (PCO Motion) referring the proposal to establish a new role of a Parliamentary Compliance Officer (PCO) to its Privileges Committee (see here) (Inquiry).

What would the PCO's powers and responsibilities be?

In the coming months, the Inquiry into the establishment of the PCO will call for submissions, potentially hold public hearings and prepare a report outlining its recommendations in relation to the possible establishment of a PCO. The exact scope of the PCO's powers and their investigatory remit is yet to be defined and will likely be one of the matters addressed by the Inquiry.

As outlined in the PCO Motion, it is anticipated that the PCO will primarily be responsible for confidentially receiving, assessing and investigating "low level, minor misconduct" matters. As it is currently drafted, the PCO must define the term of "low level minor misconduct" in a protocol they develop within three months of their appointment. Once approved by the Privileges Committee and tabled in the NSW Legislative Council, the PCO will be able to use the protocol to guide their investigations.

At this stage, based on the PCO Motion, "low level, minor misconduct" matters are likely to encapsulate breaches of the Ministerial Code of Conduct, including:

  • the misuse of allowances and entitlements;
  • allegations of bullying and harassment;
  • other less serious misconduct falling short of corrupt misconduct; and
  • minor breaches of the pecuniary interests disclosure scheme, which requires members to disclose their pecuniary interests (e.g. real property interests, gifts with a cumulative value exceeding $500 and interests in company shares) when they begin their term in Parliament.

During the investigative process, it is suggested that the PCO will have the power to make inquiries and call for the production of relevant documents and records. This will provide another layer of scrutiny in terms of ensuring that all relevant persons are adhering to their record-keeping obligations under the State Records Act 1998 (NSW). As part of the PCO's role, it is likely that their investigations may extend to staff within departments and agencies who are relevant to the investigation and, as such, the PCO may have the power to compel the production of documents held by relevant departments and agencies.

It is also anticipated that the PCO may be responsible for

  • monitoring the operation of the Code and advising the Privileges Committee about potential reforms to the Code;
  • providing confidential advice to members about the Members' Entitlements scheme; and
  • educating members of Parliament about their obligations under the Code.

Subject to its powers and scope, the PCO role may ultimately become the investigative body that can address the "less serious" misconduct, potentially preventing poor behaviour from developing into "serious misconduct" and requiring intervention by the ICAC.

History of the proposed PCO or Parliamentary Investigator

This is not the first time that the NSW Government has contemplated establishing a PCO or a "Parliamentary Investigator" (who would perform similar functions to the PCO). The following timeline outlines (at a high level) various similar recommendations that have been made over the years but have not been implemented:

  • in 2003, the ICAC recommended the establishment of a "Parliamentary Commissioner", who would be responsible for investigating the regulation of secondary employment by its members. In 2004, the Legislative Assembly agreed that it would be preferable for the Assembly to consider options for investigating matters coming before the ICAC which involve parliamentary privilege "on a case by case basis";
  • in 2004, the Hon Peter Breen MLC gave the Legislative Council notice of a Bill relating to the appointment and functions of a Parliamentary Commissioner for Standards;
  • in 2005, Mr Bruce McClintock SC recommended that the Parliamentary Investigator role be adopted to ensure that minor complaints could be resolved quickly and matters not within ICAC's jurisdiction could be investigated;
  • in 2013, the ICAC recommended the establishment of a "Parliamentary Investigator" role in its report titled Reducing the Opportunities and Incentives for Corruption in the State's Management of Coal Resources (2013 Report);
  • in 2014, the Legislative Council referred an inquiry to the Privileges Committee to investigate the recommendation to establish a "Parliamentary Investigator" role as outlined in the 2013 Report. The Committee produced a report in June 2014 (2014 Report) summarising its findings; and
  • in 2016, NSW Premier, the Hon. Mike Baird, wrote to the Speaker of the Legislative Assembly and President of the Legislative Council, where he noted he was agreeable to the recommendations made in the 2013 Report and 2014 Report. In his letter, he requested that the two Houses "work together to provide the Government with a single set of recommendations covering the matters canvassed in the Reports". We understand that this never eventuated.

It is evident that a role such as the PCO has been contemplated for some time by the NSW Government and, historically, there has been considerable debate to determine the nature and scope of such a role. We await, with much anticipation, the outcome of the Inquiry and to what extent its recommendations are implemented.

How to prepare for the establishment of a PCO

We anticipate that the establishment of the PCO could have a range of implications for the Executive and senior Public Servants, their Ministers and Ministerial Officers. More than ever, it is important for Government employees to diligently comply with record-keeping obligations and to ensure they comply with all relevant workplace obligations. For example, it is currently unclear whether the PCO will have any role in overseeing compliance with the Government Sector Employment Act 2013 (NSW) (GSE Act). However, it may be a timely opportunity to provide internal training to remind staff of their general obligations under the GSE Act, particularly their obligations to act with integrity and to place the public interest above personal interests (see for example, section 7 of the GSE Act). To ensure you are prepared for these proposed changes, we recommend taking the following measures:

  1. Consult Department Liaison Officers (DLO): consulting with your DLO early about the potential scope and role of the PCO so you are well-equipped to implement new processes and procedures to deal with any PCO investigations. Although the PCO role is yet to be established, it would be useful for the DLO to monitor the latest developments regarding the role and be prepared to work with the Department if the role is established. Relevant departments and agencies may also consider making submissions to the Inquiry.
  2. Record-keeping obligations: ensure that all physical and digital records are stored using their document management system (which complies with their obligations under the State Records Act 1998 (NSW)) so they can easily be located if the PCO calls for the production of relevant documents and records. If your office frequently uses dissemination limiting markers in email correspondence (eg. Sensitive: Legal, Sensitive: Cabinet), ensure these markers are applied consistently. It may be a timely opportunity to require staff to undertake further record management training to ensure that they are aware of their obligations and responsibilities (in relation to all types of records, including those created on various electronic devices and applications) as Government employees.
  3. Internal policies and procedures: develop and/or update internal policies and procedures regarding matters likely to be subject to investigations by the PCO (eg. the use of allowances and entitlements, or allegations of workplace bullying and harassment, gifts and benefits policies etc.) and roll out updated training sessions for your staff in relation to same.

Need further assistance?

Please contact us if you would like to discuss the proposed PCO role and how it may affect you more generally. If you need assistance with gaining a greater understanding of your record management obligations, please do not hesitate to reach out to our experienced team.


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Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this communication. Persons listed may not be admitted in all States and Territories.