22.3.11 Combating the Financing of People Smuggling and Other Measures Bill 2011

Wednesday, 04 May 2011


Mr HAWKE (5:09 PM) —I want to commend the member for Fowler for his proper and valid concern for human rights and his ongoing compassion towards other human beings. It is something that we share in this place. And his remarks on slavery and all of those other worthy causes are of course welcome. In speaking on the Combating the Financing of People Smuggling and Other Measures Bill 2011, however, I think the member for Fowler is also courageous—courageous in standing up to his party’s machine and speaking out about the problems that we face in Australia today because of the upsurge in people-smuggling and the failed policies of the Gillard and Rudd Labor governments. We see here there are only three brave members from the Labor Party prepared to speak out on this bill—just three brave people coming forward to say that they believe that not enough is being done to combat people-smuggling in Australia today. The coalition has four times the speakers here today, coming forward to highlight what we see as a very serious problem for Australia’s future—in the context of riots in detention centres and an overburdened system—where people-smuggling is rampant and a lot of money is being made by people-smugglers. That is of course why we have this bill and its provisions in front of us today. So I do commend those three brave Labor Party souls. And I know the member for Dobell is going to come forward and strongly condemn people-smuggling and the government’s performance in this regard. I look forward to his remarks on how we are going to do better as a government and as a country.


I had the opportunity to meet with an Israeli prosecutor some months ago who has spent her time prosecuting terror groups and those institutions that finance them—banks, and anybody who holds money for groups that are responsible for terror activities around the world. She has had some success in many jurisdictions, notably the United States, including prosecuting North Korea and other different institutions and countries, for helping to finance activities related to terrorism. She has done that through seeking damages, by suing on behalf of victims of terror activities. This is a worthy instrument in terms of the purposes of this bill—that we should seek to hinder and hamper the operations of people-smugglers by restricting the ability of them transfer funds and to house funds and to use money in what is an illegal activity. So I want to commend her efforts in fighting terrorism.


The intention of this bill is a worthy one. It is sad that we have so much people-smuggling today that we have to introduce a bill like this, because this does affect a legitimate sector of the economy—the alternative remittance sector, which is a legitimate business with people conducting legitimate activity. One of the things I never enjoy in this place is our rush to regulate whole sectors of the economy in order to deal with very specific and defined problems and some people who are causing trouble. It places a burden on all of the rest of the sector. And that, again, is the undesirable element of this legislation that we are considering today.


With a more comprehensive regulatory regime for the remittance sector, the remittance sector are being made to pay because of an increase in criminal activity in relation to people-smuggling. An increase in criminal activity, which we would argue is a result of failed policy at a governmental level leading to a marketplace for people-smugglers and an increase in people-smuggling, has now placed a burden on the legitimate operators and the people in the sector who are conducting legitimate economic activity.


We know that the alternative remittance sector is entirely legitimate. It provides businesses and individuals in Australia with the ability to transfer funds overseas outside the formal banking sector. There is nothing wrong with that. We do not have to mandate that they go through banks or particular financial institutions, considering the diversity and enormity of the global economy today. The remittance sector can transfer funds quickly, securely, cost-effectively and is invaluable in countries where established banking networks are not commonplace or sophisticated. So this is an important sector of our economy that plays an important role in the international transfer of funds, something that is particularly important to a country like Australia, which relies heavily on foreign investment and the transfer of financial capital in and out of our financial markets on a daily basis. So it is an unwelcome development that we must over-regulate this sector because of criminal activity that we are not dealing with sufficiently as a nation. I want to reject Labor’s approach in handling people-smuggling, in handling border protection in general, which has led us to the point where we have this problem today.


There are of course other activities that are not related to people-smuggling that are impacted by this bill. In those intentions, it is a worthy act of the government and this bill in acting to deal with the practice of what is commonly referred to as ‘cuckoo smurfing’. I have not heard many members talk about cuckoo smurfing here today, but it is an interesting area—something I had the opportunity to read about and learn a little bit about. It is effectively money laundering. The term originates from a cuckoo bird, which lays its eggs in the nests of other birds.


The cuckoo smurfing technique involves a legitimate financial transaction occurring in one direction and an illegitimate flow in the other direction—this is criminal activity, in other words. These smurfs involved in this activity are engaged in an insidious crime using genuine recipients of their money. When you think of the smurfs, you think of the cartoon show. I used to watch it when I was growing up—the member for Ryan agrees with me there—with Papa Smurf and all of their related activities. But these smurfs are not nice characters, unlike most of the smurfs in the cartoon. In fact, there are master smurfs that spend all their time engaged in this process making a lot of money. It has been estimated that crime in Australia generates up to $6.3 billion a year, which is a lot of money. Money laundering activity in cuckoo smurfing is worth up to five per cent of global gross domestic product, which is $56 billion here, an amazing amount of money when you think about it.


What is being discussed here in relation to increasing the regulation provisions are worthy objectives, particularly the legislative framework on the regulation of remittance dealers and of the providers of remittance networks—that is, not just the dealers but those who house many dealers and provide networks for them—is a worthy objective in dealing with money laundering. We must have those frameworks in place to ensure that the law is adequate in emerging areas of the global economy. This is an emerging area of the global economy where the use of alternative networks for the transfer of funds is becoming increasingly more common. Therefore the law needs to be adequate in order to deal with them.


The term cuckoo smurfing is interesting. But when you look at the way that this money and these transfers work, for this bill to be entitled Combating the Financing of People Smuggling and Other Measures Bill, I am sure this is not the only mechanism that is used by people smugglers to conduct their insidious trade. Perhaps a more comprehensive suite of measures directed at people-smuggling would be better brought to this place. Of course, we know there is a lack of will in dealing with people-smuggling at the moment because of the associated problems with border protection, the failures and the government policy—and that is a sad thing.


It is the case that financial institutions that engage or house money for criminal organisations or outfits should understand they may be held liable for the actions, outcomes and consequences of housing or transferring that money. That is the exact principle that the Israelis are following up in relation to terrorism right now, and it is working. Damages are being awarded by courts internationally in relation to the consequences of financial institutions housing money for criminal activity.


In relation to people-smuggling, I would say to those financial institutions that may or may not know or have done their due diligence in understanding that if they are housing money for people smugglers or transferring funds for people smugglers they may be held liable down the track for the victims of the very sad situations we see when boats are sunk or when people lose their lives or when family members come forward to sue those institutions. As tragic as those events are, that is the system of law we all uphold—that is, people do have the right to come forward and hold everybody in the chain of what led to those events accountable, including financial institutions. There is no separation in law of the responsibility where events in criminal activity have occurred when these institutions have been involved.


While the government is keen to dress this up as a ‘very tough on people-smuggling’ measure, and indeed it will have some impact, the coalition does have some concerns in relation to some provisions that are being proposed here today. The coalition does support the bill in principle, and I have made it clear why that is. We have always had a good record on border protection. We have taken measures that needed to be taken in a timely fashion to ensure we did not get to this point where we are in effect penalising a whole industry for the operation of one criminal sector of that industry, and that is what we are doing here today. No member of this place should enjoy the fact that we are doing it, even though we have to do something to crack down on this insidious trade.


There has been an inquiry in the Senate, and we are foreshadowing amendments to this bill. I support many of the potential considerations the Senate is raising on this matter, including a legitimate concern with privacy relating to the increased ability of agencies to share information. The government reports that this bill is enhancing information sharing to ensure that government agencies work together in a coordinated way. However, there are some concerns that are valid when you think about the agencies that are involved. AUSTRAC can share financial intelligence with the Department of Foreign Affairs and Trade, the Defence Imagery and Geospatial Organisation, the Defence Intelligence Organisation, the Defence Signals Directorate and the Office of National Assessments under the provisions of this legislation. When looking at all of those providers we mentioned—I think it is up to 2,500 or maybe more, I might have the figure wrong; many thousands of those providers—when you are thinking about the impact upon that sector, then there is an argument to be had here and we have foreshadowed potential amendments to this legislation.


While we do in principle support this legislation it is unfortunate that it has come to this. If this is the government’s sole response to the very tragic situations that we have seen, which have been some years in the making in relation to the protection of Australia’s borders and the dramatic increase in people-smuggling activity we have seen in recent years, this will not be sufficient. This legislation will address only a very small symptom of a broader problem and not address its fundamental causes or roots.


No member of this place and no member of our community out there listening or that hears about this particular legislation, which has such a tough-looking bill title, should believe that this is going to solve what is becoming a rapidly growing problem for Australia today. It is not. The lack of interest shown by Labor members in speaking on this bill highlights that. Some will come out and say that we are very tough on border protection. Kevin Rudd had a view under his government that we were tough but compassionate at the same time. Members opposite are agreeing with me. But we have seen what tough and compassionate means. Who are we tough to and who are we compassionate to? When we are using tear gas and firing rubber bullets in detention centres I am getting very confused about who we are being tough to and who we are being sympathetic to when people-smuggling is flourishing and this insidious trade is increasing. It is confusing, and out there today in the world we are seeing the effects of this policy confusion. This bill is a response to this inherent policy confusion and failure from a Labor government that is desperately seeking some answer to a crisis of its own making.

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