1 Background

Referral to the Commission

  1. 1.1 On 29 October 2014, the then Attorney-General, the Hon. Robert Clark, MP, asked the Victorian Law Reform Commission, under section 5(1)(a) of the Victorian Law Reform Commission Act 2000 (Vic), to review and report on the use of regulatory regimes to help prevent organised crime and criminal organisations entering into or operating through lawful occupations and industries.
  2. 1.2 Lawful occupations and industries may be used to enable or facilitate organised crime and to conceal or launder the proceeds of crime. In 2014, the Parliament of Victoria Law Reform, Drugs and Crime Prevention Committee recommended that the Victorian Government investigate the appropriateness of using administrative regulatory measures to reduce the opportunities available to organised crime groups for engaging in illegal activities in Victoria.1
  3. 1.3 Regulatory regimes are the laws, regulations, policies and instruments that regulate particular occupations and industries; for example, laws that provide that only fit and proper people can obtain licences to operate in particular occupations or industries. Regulatory regimes may assist in preventing the infiltration of organised crime groups into lawful occupations and industries.
  4. 1.4 There are other legal responses to organised crime under Victorian and Commonwealth law which are, in general, not focused on specific occupations or industries. These include anti-association laws, anti-fortification laws, tools for the investigation and prosecution of criminal offences committed by organised crime groups, anti-money laundering laws, laws allowing for the forfeiture or confiscation of the proceeds of crime, and ‘unexplained wealth’ laws.

The Commission’s approach

Scope of the review

  1. 1.5 The Commission’s review is determined by the terms of reference. The terms of reference ask the Commission whether a framework of principles can be established for:
  • assessing the risks of organised crime infiltration of different lawful occupations or industries
  • developing suitable regulatory responses.
  1. 1.6 The Commission’s report will present recommendations for these two sets of principles. In establishing these principles, the Commission has been asked to consider, among other matters:
  • the experience of Victoria and other jurisdictions in using occupational and industry regulation to help prevent organised crime infiltration of lawful occupations or industries
  • the implications for the overall efficiency and effectiveness of regulatory regimes of using such regimes to help prevent organised crime infiltration of lawful occupations or industries
  • the costs and benefits of regulatory options to assist in preventing organised crime infiltration of lawful occupations or industries.
  1. 1.7 The full terms of reference are set out at page vii.

The terms of reference

  1. 1.8 The terms of reference are concerned with the use of regulatory regimes to prevent the infiltration of organised crime into lawful occupations and industries.
  2. 1.9 There are five key elements of the terms of reference.
Prevention
  1. 1.10 The reference is directed to preventative measures, not the punishment of organised crime activity. Accordingly, the reference does not deal with laws relating to the investigation, prosecution or sentencing of organised crime offenders in the criminal justice system.
  2. 1.11 However, there is some limited overlap between the criminal justice system and regulatory regimes. A regulatory regime may create criminal offences and criminal sanctions for the purpose of preventing organised crime infiltration of lawful occupations and industries, as stated by the terms of reference.
Organised crime and criminal organisations
  1. 1.12 The reference is directed to organised crime and criminal organisations. The meanings of organised crime and criminal organisations are considered at [2.2]–[2.14]. Organised crime involves serious, group-based offending for financial or other gain, on a planned and often ongoing basis. Organised crime is distinct from immediate or opportunistic offending.
Infiltration
  1. 1.13 ‘Infiltration’ denotes incursion by organised crime groups into lawful occupations and industries. The concept of infiltration does not denote organised criminality within an occupation or industry by otherwise legitimate occupation or industry participants; rather, the source of the criminality is external to the occupation or industry.
  2. 1.14 Infiltration involves both the entry of organised crime groups into an occupation or industry, and the operation of organised crime groups through an occupation or industry. ‘Operating through’ an occupation or industry includes the use of professional facilitators and specialist service providers. The term ‘infiltration’, as used in this paper, denotes both entry into an occupation or industry and operating through an occupation or industry.
 
Lawful occupations and industries
  1. 1.15 The review is about regulatory systems and is not an investigation of any particular occupation or industry. The terms of reference relate to occupations and industries that are lawful. Accordingly, the occupations and industries referred to in this paper are themselves lawful, but are said to have been infiltrated by organised crime groups or to be vulnerable to infiltration, in material on the public record. The Commission has reviewed this material in order to identify possible risk factors for infiltration of general applicability and relevant regulatory regimes for examination. The list of occupations and industries referred to in this paper is not exhaustive.
Regulatory regimes
  1. 1.16 As stated in the terms of reference, regulatory regimes include laws, regulations, policies and instruments that are used to regulate a given occupation or industry, including licensing regimes and occupational registration requirements.
  2. 1.17 The terms of reference ask the Commission to establish principles for assessing the risks of infiltration of lawful occupations and industries, and for developing suitable regulatory responses to those risks. The terms of reference do not ask the Commission to make recommendations for legislative reform. However, any principles recommended by the Commission and accepted by the Victorian Government may ultimately lead to legislative reform.

Advisory committee

  1. 1.18 The Commission has established an advisory committee comprising individuals with expertise in areas relevant to the reference. The role of the advisory committee is to provide technical advice about the issues raised by the reference. The members of the advisory committee are:
  • Ms Julie Ayling, Research Fellow, Regulatory Institutions Network, Australian National University
  • Professor John Braithwaite, Distinguished Professor and ARC Federation Fellow, Regulatory Institutions Network, Australian National University
  • Dr Matthew Butlin, Chair, Victorian Competition and Efficiency Commission
  • Assistant Commissioner Stephen Fontana, Victoria Police
  • Emeritus Professor Arie Freiberg, Faculty of Law, Monash University
  • Dr Elizabeth Lanyon, Director, Regulation and Policy, Consumer Affairs Victoria
  • Ms Gail Owen, Deputy Chair, Victorian Commission for Gambling and Liquor Regulation
  • Dr Russell Smith, Principal Criminologist and Manager, Transnational, Organised and Cyber Crime Program, Australian Institute of Criminology.
  1. 1.19 The advisory committee met for the first time on 16 March 2015 and will meet again after the close of submissions and the completion of formal consultations.

 

Division

  1. 1.20 The Chair of the Commission has exercised his powers under section 13(1)(b) of the Victorian Law Reform Commission Act 2000 (Vic) to constitute a Division to guide and oversee the conduct of the reference.
  2. 1.21 Joining the Chair on the Division are Commissioners Liana Buchanan, Helen Fatouros, Bruce Gardner PSM, Dr Ian Hardingham QC, His Honour David Jones AM, Eamonn Moran PSM QC, Alison O’Brien, and the Hon. Frank Vincent AO QC.

Structure of the consultation paper

  1. 1.22 This paper is based on the preliminary research conducted by Commission staff and consultation with members of the advisory committee.
  2. 1.23 The paper is structured as follows:
  • Chapter 2 examines the meanings of ‘organised crime’ and ‘criminal organisations’ and outlines the main types of criminal activity allegedly engaged in by organised crime groups in Australia.
  • Chapter 3 provides an overview of the lawful occupations and industries that are said to have been infiltrated, or to be vulnerable to infiltration, by organised crime groups, suggests key forms and purposes of infiltration, and presents a draft model for assessing the risk of infiltration.
  • Chapter 4 examines key features of Victorian regulatory regimes that are designed to prevent, or may be useful in preventing, the infiltration of organised crime groups into lawful occupations and industries.
  1. 1.24 Chapters 3 and 4 contain questions for the purpose of formal consultation. The complete list of questions is provided at pages 72–74.

Formal consultation process

  1. 1.25 The next stage of the reference will involve consulting with relevant organisations and individuals to test the draft model for assessing the risk of infiltration, to gather information about current regulatory regimes, and to identify any additional issues.
  2. 1.26 The formal consultation process has two parts:
  • face-to-face meetings between Commission staff and representatives of law enforcement agencies, regulators, industries and occupations, and other key stakeholders
  • written submissions to the Commission in response to the questions set out in this paper, by 3 August 2015. Information about how to make a submission is set out at pages v–vi.

 

Report

  1. 1.27 The information that the Commission receives from its formal consultations, combined with additional research, will inform the principles developed for recommendation to the Attorney-General. A report setting out these principles will be provided to the Attorney-General by the reporting date of 29 February 2016.

Footnotes

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