Senator LUDLAM-Thanks, gentlemen, for joining us this morning. I will start with a fairly general one.
In the budget overview, it looks like the AFP have gone from about $1.28 million in the last budget to $1.39 million in this budget. Personnel have been reduced by about 14-is that correct?

Mr Wood-That is correct. The reduction is in outcome 2 and specifically in ACT policing, which is not a
Commonwealth appropriation; it is appropriation we receive from the ACT government. It does not relate to outcome 1-that is, the general nation and international operations of the AFP, where there is a slight increase in the number in that portion of the budget.

Senator LUDLAM-So that item has moved sideways and has not decreased?

Mr Keelty-It is not so much a matter of moving sideways. However, you are right, there is a $111 million net increase in the budget from last year to this financial year, but the reduction in staff is in ACT policing.
ACT policing is on a cost-recovery basis with an appropriation from the ACT government. It is not a reduction in the national figures.

Senator LUDLAM-Thank you. There was some reporting yesterday that the AFP is charging an additional $1.6 million for perimeter protection of this building. Can you explain that large jump of nearly 16 per cent? Are the demands on your agency higher? Can you give some background to that?

Mr Keelty-We did answer the question earlier today. I will ask Acting Deputy Commission Colvin to address that.

Senator LUDLAM-Just briefly, and I will check the Hansard.

Mr Colvin-It effectively relates to unit costs. It is not an increase in the number of personnel used to provide that service. That is still in negotiation with the department. That is not an established firm figure at this point. It relates to the unit cost; the cost of providing the service. We offer a full cost recovery service, so it is a matter of what the service costs and that is what we bill our client.

Senator LUDLAM-Thank you. You received nearly $83 million over four years to respond, investigate and disrupt terrorist activities offshore. Can you tell us in what country those activities are primarily focused?

Mr Keelty-Primarily, Indonesia but also the Philippines and Thailand, as well as a number of placements in other agencies in the United States and the United Kingdom.

Senator LUDLAM-What is the magnitude of that increase for those offshore operations in particular?

Mr Keelty-It is not an increase; it is a continuation of the funding we had over the previous years.

Senator LUDLAM-Can you provide the number of the AFP personnel and the total expenditure for the AFP to provide security at the ANSTO facility at Lucas Heights?

Mr Keelty-I am sure not sure that we have those figures. We might be able to get them during the course of this hearing.

Senator LUDLAM-Okay. I have another one along similar lines: the number of personnel and expenditure for AFP uniform protection for protective security at the joint defence facilities at Pine Gap.

Mr Keelty-We have rolled up figures for protection. Can we take that on notice to give you specific answers to those?

Senator LUDLAM-If you can unroll them for me that would be great. I think that in the October session I asked about the AFP's work with the police force in Burma, and also jointly at a training centre in Indonesia, and you provided some answers to questions on notice to us. Is there any update on that material which was provided last October? For example, you stated that you do not work with the military; you work with the civilian police force, which has been separate since 1885. Obviously, the judicial system in Burma is corrupt- if I could be so blunt. Can you provide us with some detail of the sort of work you do; whether that work is ongoing and whether you have any concerns about cooperation or perceived cooperation with that regime?

Mr Keelty-The sort of work that is done is in conjunction with other agencies who are represented in Burma such as the United Nations Office on Drugs and Crime. It is mainly in developmental work, training them in the areas particularly of drug marketing and illicit drug manufacture and distribution. We are very conscious of the situation over there, but we are also very conscious of the need to be there and trying to assist them to become, if you like, accountable and proficient in some of their counternarcotics activities.

Senator LUDLAM-Are there law enforcement agencies from other countries represented in a similar capacity in Burma?

Mr Keelty-There are, and I have actually met with some of them historically in another capacity. I do not have what other countries are present here, but there are others. I know the United States Drug Enforcement
Agency is present, but just off the top of my head I cannot think of the other agencies. I can get back to you.

Senator LUDLAM-Thanks. What is the umbrella organisation over it? Is it the United Nations agency that coordinates that activity, or is it bilaterally-

Mr Keelty-We are there bilaterally, working out of the Australian Embassy in Rangoon. We work with the Myanmar National Police.

Senator LUDLAM-Counternarcotics work is obviously laudable, and I do not think that anybody would disagree with that anywhere. But are you concerned that some of the various kinds of techniques that you
would be training in and teaching to those police can then very easily be turned to less savoury activities on behalf of the police force there?

Mr Keelty-We are very aware of that. We understand the sort of difficulty that can arise from the development we impart in the country if we train them in ways that certainly would not be acceptable under our own conditions here in Australia. But we have taken the view that we are better off being there with them than being on the outside criticising them for inaction or inability. It is a difficult area and we are conscious of all the ramifications of being there.

Senator LUDLAM-The answers that you provided to the questions on notice were actually very detailed and precise. I would like to note that I do appreciate that. I have a question with regard to the clearance that you need to get from DFAT in order to include Burmese police in the training and programs that you have described: do you have open permission to engage with Burmese police units or is there ongoing dialogue between you and the Department of Foreign Affairs and Trade?

Mr Keelty-We work through our mission in Burma. DFAT have an understanding of the work we do; it is very transparent and the idea is to increase the civilian capacity of the Myanmar National Police as opposed to the military capacity.

Senator LUDLAM-But is there a clear distinction?

Mr Keelty-There is. They do work quite independently of the military, and I have seen that firsthand. We are very conscious of the ramifications of being there, but obviously we have taken the view that we are better off being there than not being there.

Senator LUDLAM-Apart from counternarcotics work, what kind of work are your officers engaged in there?

Mr Keelty-It is largely in the counternarcotics area because of the difficulties with other forms of assistance. Obviously if there are other types of transnational crimes through Burma that are impacting on Australia such as people-smuggling or whatever it might be, though principally it is narcotics manufacture and distribution, we will assist them with that.

Senator LUDLAM-It has been put to me that this is in fact a criminal regime. Do you have threshold conditions on which you would withdraw that cooperation and support?

Mr Keelty-Certainly we would not provide cooperation where that cooperation would result in offences occurring either in Burma or in Australia. We are very conscious of the political situation but, at the same time, we are aware of the advantages of being there with other agencies trying to develop their capability and certainly trying to get an understanding of the impact of their narcotics production.

Senator LUDLAM-What is the state of narcotics production coming out of Burma over the last little period? How successful would you describe the work that you are doing there?

Mr Keelty-There has been a significant reduction in heroin being trafficked from Burma to Australia since the introduction of our programs there. We can give you the figures on that over a period of time, but there has been a significant impact. About 70 per cent of heroin that was coming to Australia was coming out of the Golden Triangle area and, of course, over time the heroin production has been overtaken by amphetamine production. One of the things that we have been able to do is to monitor that flow, having been in the country and working with other agencies in-country to watch the production of amphetamines as well.
So there is a dividend from being there and we can provide you with the figures on that.

Senator LUDLAM-I would appreciate that. In the answer to the questions that you provided to us, you said there are about five people involved in that work. Is that still the case?

Mr Keelty-All up, that is correct.

Senator LUDLAM-There are a few things there that you have undertaken to get back to us on. Thank you. In October when we last spoke, I asked you a question about AFP surveillance of activists and infiltration of groups, in particular civil society groups working on issues such as peace, environmental protection, climate change and animal rights. You responded in writing that the AFP does not engage in inappropriate surveillance activities of groups such as that. I wondering by what criteria you gauge what is appropriate and what is inappropriate surveillance? Can you give us some examples?

Mr Keelty-The majority of the surveillance operations we do are for the investigation of an alleged criminal offence. The sorts of examples you have used are not criminal offences. We do not engage in surveillance for intelligence purposes; we engage in surveillance for evidence-gathering purposes.

Senator LUDLAM-What about, for example, groups working on climate change at the moment that are considering activities around port or rail infrastructure in the coal industry? Does your agency monitor those groups and keep files on people who are engaged in that sort of work?

Mr Keelty-As a rule, we do not unless the activities of an interest group endanger the security and safety of the Commonwealth or of a high office holder in the Commonwealth, or if indeed it engages in criminal activity. To put your mind at rest, we do not gather intelligence through surveillance on interest groups. In fact, you may be surprised to learn that we have actually worked with some of the people in those interest groups, particularly in getting an understanding of environments that we are not familiar with such as illegal logging offshore.

Senator LUDLAM-I guess I am not too surprised to hear that. Is all of that work conducted by state police departments?

Mr Keelty-I am not in a position to comment on what the state police are doing in relation to those interest groups.

Senator LUDLAM-So the Commonwealth takes no role in coordinating those activities amongst law enforcement agencies nationally?

Mr Keelty-The AFP does not, that is correct.

Senator LUDLAM-That is pretty black and white-I appreciate that. I put some questions on notice in the middle of April which are now somewhat overdue, so I will just put some of them to you now. They relate to specific cases involving terror suspects. I was seeking some information on the expenditure of your agency on specific cases, and I have a couple of those questions here. Can you go to your records on the Jack Thomas case?

Mr Colvin-I may be able to help you with that, and at the end I will also come back and answer your question about numbers at the ANSTO facility and Pine Gap. In relation to the investigation of Mr Jack Thomas, between January 2002 and February 2009, effectively a seven-year period, the cost to the AFP was $1.2 million. That figure does not include the direct cost of engaging the AGS, the Government Solicitor, for matters relevant to the case, totalling $494,000.

Senator LUDLAM-So $1.2 million plus $494,000.

Mr Colvin-That is correct.

Senator LUDLAM-Is that file closed or is there still expenditure occurring?

Mr Colvin-That investigation has concluded.

Senator LUDLAM-The second question that I had was on the case of Dr Haneef.

Mr Colvin-In relation to Operation Rain, which was the name that the AFP had for the totality of that investigation, as at 30 December 2008 the total AFP cost of the investigation was $8.5 million. For Dr Haneef himself, the cost of the investigation was $4.6 million.

Senator LUDLAM-So just over $13 million in total.

Mr Colvin-No, the $8.5 million is a total figure. The $4.6 million related to Dr Hanif.

Senator LUDLAM-Thank you for that. Is that file concluded now?

Mr Colvin-Yes, it is.

Senator LUDLAM-The third question I had was on the total expenditure by the AFP on Operation Halophyte. I believe that started up in January 2006.

Mr Colvin-It started in 2005, and the matter is still before the court at the moment. The cost of the investigation to date between January 2005 and April 2009 is $5.1 million.

Senator LUDLAM-Finally, what was the expenditure by the AFP on the David Hicks case?

Mr Colvin-We cannot distinguish between the David Hicks and Mamdouh Habib cases, because both investigations were run together-I need to give you that caveat in terms of the way that the operation was conducted. The total expenditure on that operation between December 2001 and April 2009 was $598,000.
There were further direct costs in engaging the Government Solicitor which totalled $105,000.

Senator LUDLAM-For such a significant case, that is an order of magnitude less than you spent on the
Haneef case, for example.

Mr Colvin-That would be correct.

Senator LUDLAM-I have no further questions, so do you want to come back with some of the other information?

Mr Colvin-We will take on notice the actual budget appropriation, but the staffing figure as at 15 April for our officers stationed at ANSTO was 44. At the same date, 15 April, we had 50 officers stationed at Pine Gap.

Senator LUDLAM-Thanks very much for providing that.