Businesses, Agents and Trade Professionals

2017 Industry Summit transcript

Michael Outram
Acting Australian Border Force Commissioner
Department of Immigration and Border Protection

31 July 2017
Melbourne, Australia

First I would like to acknowledge the Minister for Immigration and Border Protection, Honourable Peter Dutton, colleagues from the Department and the Border Force, friends and stakeholders across industry. Thank you, and good morning.

It’s a real pleasure to be here as the Acting Commissioner. And I’d first of all like to thank the Minister for his keynote address. I’d also like to acknowledge that we have delegates here from the Fiji Revenue and Customs Authority. We do a lot of work through the World Customs Organization with our colleagues from Fiji, and they’re here observing today in preparation for a summit they’re going to in Fiji next year and so we extend a warm greeting to you.

The importance of our relationship with industry of course cannot be overstated. It is through fora such as these we continue to develop robust relationships, dialogue and partnerships between you and for example, the Australian Border Force.

Let me start by making two really important points.

First – faster trade and travel and a strong, secure border are not mutually exclusive; in fact on the contrary, they are mutually reinforcing concepts.

Second – the ABF is and will remain Australia’s customs service into the future.

Both as the acting Commissioner of the ABF, and the acting Comptroller-General of Customs, I can assure you that the ABF will continue to deliver the strong trade, cargo and traveller outcomes that you have come to expect. And that while we face an era of reducing budgets compared to ever increasing volumes, we are simultaneously committed to continual improvement as a facilitator of both trade and travel.

Some commentators have quite recently expressed concerns that the Border Force might lose its focus on the traditional customs role as part of the recently announced portfolio changes, and that customs and border security functions should be mutually exclusive and separated.

Quite frankly, to separate out the trade/travel facilitation imperatives, and the trade/travel risk management task, in my view would be reckless.

To meet the increasing level of demand, and at the same time increase the speed at which border checkpoints can be traversed, we need to know more about the integrity of the supply chain, more about travel and trade routes, and more about the companies and individuals involved.

To know more, we need more advanced data, into the future, sooner, in as automated a way as possible, as well as the establishment of trusted and secure entities and transactions of the sort that the Minister referred to.

And this is where our partnership with industry is critical; the more data and information we can get from industry, while protecting privacy and commercially sensitive data of course, the more we can allow trade to flow while identifying the goods and activities that concern us, and the better our mutually beneficial outcomes will then be.

The move into a Home Affairs Portfolio will not change this focus. Our trade modernisation agenda remains intact, as does our investment in the products of that modernisation: ongoing programmes like the Australian Trusted Trader, Single Window, SmartGates and more. Our investment in innovation and technology will continue to be a priority for us.

The changes announced will bring greater engagement with our law enforcement and intelligence partners—and this is a positive and welcome development because it enhances rather than detracts from our vital role as Australia’s customs service.

And I would like to focus for a moment on the Minister’s statements this morning in relation to the Home Affairs portfolio. What that means for the immigration and customs functions, and how that affects—or perhaps doesn’t affect so much—our immigration reform and trade modernisation policy plans as they currently exist.  And in doing so perhaps dispel a few myths along the way.

There has been extensive media coverage, and industry speculation, about the announcement made by the Prime Minister on Tuesday 18 July. Much of this speculation—particularly that related to the alleged ‘downgrading’ of immigration and customs functions—is misplaced. The Department of Home Affairs will be a central department combining the Department of Immigration and Border Protection and the national security elements of the Attorney-General's Department. The Department of Home Affairs will provide strategic planning, coordination and administrative support to the independent statutory operational agencies, including the Australian Border Force.

The creation of the Department of Home Affairs will enhance the coordination of traditional immigration and customs functions and strengthen our focus on industry engagement and facilitation of legitimate trade and travel and at the same time, will continue to reduce the regulatory burden to strengthen the Australian economy and build a prosperous and cohesive society.

The Department of Home Affairs and the portfolio that it supports will further enhance our capability, effectiveness and outcomes in my view.

Our immigration and customs functions have increasingly become about balancing risk and benefit to Australia. This will continue under a Home Affairs portfolio, but as our ability to understand and manage risk grows, so too does our ability to find new ways to capture the benefits of global trade and migration. By focussing our efforts on those consignments or people who represent the highest risk, we are also able to help facilitate and streamline our processes to make the legitimate movement of goods and people as seamless as possible.

Now this is all predicated on us being able to access information about inbound and outbound movements of people and goods as far ahead of the actual crossing of the border as possible. We can then link this data with national security and criminal intelligence and information data to better target our interventions. Further freeing up resources devoted to keeping passengers and goods moving.

I want to be very clear. This is not a choice between security and facilitation, as some would try and frame it. A secure trade and migration programme is built on the foundation of a secure border. We can have both and we must have both—as there can be no separation, really, between the two.

But the challenges we face are growing. The volumes, as the Minister averted to, of people and goods crossing our border continues to grow at strong rates. And this is good, this is beneficial. At the same time, the diversity of the countries of origin of goods that travel to Australia is also growing. On top of the challenge of managing the sheer volumes we are talking about, we must respond to the sophistication and connectedness of criminal syndicates, and those who would otherwise do us harm, and their desirability to take advantage of our systems, and of yours for that matter, is growing.

I’ll talk about this in more detail shortly but first, in the absence of our Secretary, Mike Pezzullo, this morning, I would like to provide some context to you on the immigration function delivered by the Department will feature within the Home Affairs portfolio.

The immigration function has been distributed across government as a ‘federated network’ for some time now—with different agencies contributing to different aspects of it.

For example, for several years, our colleagues at the Department of Human Services have been responsible for the coordination and delivery of settlement services to new migrants. This federated approach will both continue and in fact be enhanced under the new portfolio arrangements. And this does not represent a significant change in the way we do things; however we expect to see an increase in policy advice sought and provided from a range of other government agencies to inform the Department’s programmes. The core functions of the Department—granting visas and citizenship, managing entry, exit and visitor stay, detecting and apprehending overstayers and the enforcement activities that we conduct, detention and removal included—will remain in the Home Affairs portfolio.

So I’d now like to touch on some the ABF’s operations, some of the recent developments in the trade, traveller and customs domain, and how the Border Force continues to work with industry and innovate at the border.

As you know, the Australian Border Force was stood up two years ago as of this month. The integrated Department and the Border Force within it was conceived as a 21st century, leading edge border organisation – more flexible and able to respond to changes driven by conditions at the global level.

For the ABF, our “new normal” really is characterised by unprecedented and escalating border flows—in the form of travellers and trade—and a complex, and increasingly volatile environment.

And we have a number of complementary imperatives.

Facilitation I’ve mentioned, we assist, day-to-day, the seamless movement of legitimate trade and travellers across our border.

Compliance—our preferred approach is to encourage and monitor compliance with border related laws and regulations, especially those relating to the Customs Act, Migration Act, the Maritime Powers Act.

And these compliance activities of course, are underpinned when necessary by enforcement activity, which supports our national security, supports our economy by targeting and thwarting illegal and criminal behaviour.

In combination, all these imperatives also support the overall economic prosperity by ensuring effective collection of duty and revenue and the protection of the Australian way of life.

I’d like to highlight some key statistics that speak to the tremendous work that our officers have accomplished since integration on1 July 2015.

And let me say that since I arrived at the Border Force from the Federal Police, it becomes very quickly clear that the officers of the Australian Border Force and the staff that support them are incredibly committed to the task. And very skilled at what they do. They’re our greatest asset.

I’d like to highlight some of the key statistics that support – showcase their work. They’ve:

    • Processed more than 81 million air and sea travellers and crew.
    • Received and risk assessed more than 73 million air cargo consignments, 6 million sea cargo consignments, and inspected more than 100 million international mail items – to give you a sense of some of the volumes we’re dealing with. And in doing so have detected more than 16 tonnes of illicit drugs and precursors, 250 million individual illicit cigarettes and more than 170 tonnes of tobacco.

And in terms of community harm and collection of revenue, they’re not insignificant statistics. We take our community protection role extremely seriously, and have for example in the last twelve months, have continued our increased operational focus to deter and detect goods suspected of containing asbestos from crossing the border.

And as the weekend’s events have unfortunately demonstrated, we are also dealing with significant national security challenges such as terrorism. And this is coupled with irregular migration, people smuggling and organised attempts to exploit our visa programme.

Serious and organised crime groups also present of course, an ever-growing challenge.

Criminal alliances and joint ventures are well-financed, organised and innovative––and they are applying ever more diverse methods of concealment and complicated efforts to circumvent our border controls.

They utilise complex and opaque supply chains to disguise the true origin of goods and the real identities of players in their networks. 

Of particular concern to industry, they also actively groom, recruit and exploit trusted insiders within the trade, travel and migration sectors. These are clear and present risks that we must all face together.

Australia is a lucrative market for illicit goods and particularly illicit drugs – and the prices drug users will pay for illicit drugs in Australia are amongst the highest in the world.

In 2015-16 alone the ABF made more than 16,000 detections of major illicit drugs and precursors weighing more than 5000 kg.

Since then, authorities in Australia have made record seizures of ice and cocaine––with street values of nearly $900 million and $300 million respectively. That’s Australian dollars.

The ABF along with its primary law enforcement partner the AFP, the Federal Police, is undertaking significant work offshore, further up the supply chain to suppress the flow of illicit drugs closer to their source. This is difficult and dangerous work which cannot be underestimated. But I am in no doubt that this will be a key area of focus within the new portfolio of Home Affairs.

We continue to target the importation and distribution of illicit tobacco, which often involves serious and organised crime groups avoiding payment of government revenue of course. And our Tobacco Strike Team was established in 2015, and has seized more than 40 tonnes of smuggled tobacco and 95 million smuggled cigarettes. It has issued penalties worth $4.2 million and Australian authorities have restrained over $7.5 million in proceeds of crime from that work alone.

So our success in this field not only prevents revenue evasion but helps stem criminal investment in other activities, such as illicit firearms, narcotics trafficking, sexual servitude, counterfeit goods production and potentially, the financing of terrorism.

In this complex, rapidly evolving operating environment, we know that it isn’t always enough to do the same thing that we’ve always done in the way that we’ve done it. In fact, the very real challenge of resource constraints means that it is essential that we embrace change, that we innovate that we use technology to streamline and modernise existing processes, while pioneering new solutions and partnerships with industry.

Given the record volumes of border flows we are seeing, in order to continue to be a 21st century leading edge border organisation which serves the needs of our community we must actively work towards what we call a ‘seamless border’, that the Minister touched upon.

Where the majority of legitimate migrants, travellers and trade can move easily and effortlessly across the border without interference or unnecessary delay, while our officers can conduct more precise strikes against the people, organisations and commodities that present the highest risk.

We are no longer able to police the border simply by increasing the number of officers who can open more containers, or stop and question more passengers. Instead, it is crucial that we continue to seek ways to modernise and transform our operations to better manage the border. And this includes, but is not limited to:

  • helping Australian businesses trade more efficiently and effectively at the border
  • streamlining and better utilising intelligence and data collection, including biometrics, particularly to enhance automation
  • seizing on emerging technologies to better safeguard our processes, and
  • engaging in bilateral and multilateral agreements to further open up secure trade avenues to the benefit of both Australians and our international partners.

Our work to date to modernise trade and travel includes:

  • The initiatives outlined earlier by the Minister that are focused on significant reform of our visa processing systems.
  • Our commitment to the increased use of Free Trade Agreements—or FTAs—which enable importers and exporters to trade goods more efficiently at the border and receive preferential customs duty rates. This extends to goods—customs procedures and rules of origin—and services—the movement of natural persons.
  • The Australian Trusted Trader programme, launched on 1 July 2016, has streamlined trade for accredited traders and increased efficiency without compromising supply chain security, crucially. We currently have 45 fully accredited ongoing Trusted Traders under the programme and intend to increase this significantly over the coming years.
  • The establishment of Mutual Recognition Arrangements with Australia’s top trading partners is a key benefit to the Trusted Trader programme and is anticipated to create a direct benefit of $2.4 billion for participants over the next 10 years.
  • And we have recently removed the paper Outgoing Passenger Cards to the joy of many outgoing passengers no doubt, which has already helped reduce queue times and facilitate a quicker flow of travellers across the border.
  • And we continue to implement best practice regarding our airports, including our newest international airport in Canberra.

Now let me just touch on trade. Of course we continue to modernise our management of trade and travel across Australia’s borders too. Our goal of a seamless border requires continued proactive thinking and partnering with industry to find innovative solutions to this end.

Key to the future innovation is our commitment to deliver the Government’s significant and ambitious trade modernisation agenda. This presents an opportunity to reform aging systems firstly, and frameworks to support rising trade volumes and increasingly complex global supply chains.

A key component of trade modernisation is a single window for international trade that the Minister described. Developing the single window within the trade modernisation agenda will offer an enhanced return on investment for government and for industry.

And I won’t go into detail here but that’s a topic you will hear more about throughout the day.

I spoke briefly earlier about the Australian Trusted Trader programme and the associated Mutual Recognition Arrangements.

And I was recently in Brussels where I had the privilege to represent the Border Force at the WCO annual council. And there I was able to sign MRAs with our partners in Korea, Canada and Hong Kong. These arrangements will all ultimately benefit Australian traders and importers and that’s the intent of them.

Given the global nature of trade today, we are intent on streamlining and simplifying our processes wherever possible to deliver competitive benefits and better security outcomes.

As the government’s Free Trade Agreement negotiations continue with the Regional Comprehensive Economic Partnership, Indonesia, Hong Kong and Peru, the Department is working to ensure industry can continue to access important global markets, in a way that both enhances competitive advantage and minimises the cost of transacting with border agencies.

In particular we aim to support and implement procedures that reduce red tape, by streamlining customs processes, while maintaining the integrity of the border system. An example of this would be the consolidation of shipping, which can often occur in Free Trade Zones. This can represent a particular challenge though when seeking to establish the origin of goods and the subsequent treatment of these goods under Australia’s FTA arrangements.

The Department and the Border Force are addressing these challenges by ensuring agreements that Australia enters into have robust rules of origin and customs procedures and that our systems allow for an intelligence-informed, risk-based approach to managing the border.

In relation to travellers, we are continuing to look for innovative and cost effective ways of providing border services to keep pace with the changing needs of industry. We recognise the broader economic benefits these changes bring and the need to support these activities in a cost effective manner.

We are working with industry operators and across government in fact, to accommodate new and emerging air and sea ports and associated commercial offerings. While this model is still under consideration by government, we’ve already delivered a ‘user-pays’ border processing capability to airports that allows VIP travellers to be processed in separate locations. 

Our goal is to make travel ultimately as seamless and as un-intrusive as we can for the legitimate, law-abiding majority, which allows us to focus our resources and attention on the areas which are problematic.

I’ll just give you another great example of our facilitation work – which is really in relation to automated Departures Smartgates, and you may have used them. I touched on them a little earlier on. The Minister mentioned that the Government announced another three year contract with Vision Box Australia to deliver a world-leading automated contactless travel clearance process for people arriving in Australia by air. And that will deliver upgraded biometric technology to clear passengers at Australia’s international airports, and in addition, travellers will eventually be able to self-process through the airport without a passport, using facial recognition technology.

Last year more than 16 million passengers used automated Departures SmartGates at our international airports—that averages to more than 40,000 people using the latest technology to depart Australia every day.

Our Departures SmartGates are in fact unique in that all travellers, irrespective of nationality and whether they hold an ePassport, are able to use them—and that’s a world first. And many of you who travel will know that when you go to other countries, you’re in the lane that doesn’t use a SmartGate, because you don’t come from that particular country.

Importantly, they aid in the facilitation of large volumes of travellers and make border control less intrusive, more seamless and faster for legitimate, low-risk travellers.

And of course, SmartGates technology, this is crucial, is supported by Advance Passenger Processing, which operates at check-ins overseas and onshore, verifying whether travellers hold a valid visa—or other authority—to enter or depart Australia.

We will be investing further in advanced, state-of–the-art biometric systems in the coming years in order to implement a high-volume, multimodal biometric matching, storing, analysis and data-sharing of facial image and fingerprint biometrics capability. Wow, that was a mouthful. But you get the idea.

And this will ensure the ongoing integrity of our visa and migration programmes, enhances existing automation measures, and further increases the speed and efficiency of border processing.

And of course in the near future, we will be exploring these and a whole range of new technologies that relate to trade and travel.

In conclusion, the ABF continues to facilitate and manage unprecedented and escalating increases of travel and trade at our borders.

On current projections, the magnitude of increase in trade and travel will require that the Department of Home Affairs, and industry, work together to deliver what we want to deliver, which is a seamless border.

Our aspiration is to be essentially invisible to the majority of law-abiding travellers, migrants and traders, in a fully automated border environment we will focus our resources and use intelligence and analytics to guide our enforcement intention to unlawful activity and non-compliant behaviour.

To achieve this, the Department of Home Affairs and the Border Force will continue to evolve—as has occurred in the past—to seize the opportunities and simultaneously manage challenges offered by increasing globalisation. This will require increased automation, harnessing new and digital technologies, and an enhanced capability to collect and analyse big data and intelligence.

We will also be building on and strengthening our partnership with industry and fellow border law enforcement agencies—both domestically and internationally.

And in the face of resource constraints, increased volumes and risk, offsetting increased border flows with more officers as I said, is simply not viable—investment in modernisation is crucial, as is the dual imperative to manage facilitation and security simultaneously.

We are investing in our ICT and intelligence capabilities, with the knowledge that many of our high volume transactions will be automated in the future.

Of course, equally important is investing in our people—it is their skills, their insights, their wisdom and innovation which will drive the change that we need in the years ahead. High value work—that of human judgement and analysis—will become even more important in the future as we make increased use of automation and things like algorithms.

The ABF has achieved much in the past two years, and I’m very proud of those achievements and so are our staff. And we continue to build on our capabilities to better fulfil our mission: to protect Australia’s border and manage the movement of people and goods across it.

Our dedication to this mission will not change under the Home Affairs portfolio. The ABF will remain Australia’s customs service operating in an enhanced security environment.

We cannot do this without the wholehearted participation of industry, and without forums like this Industry Summit. So I thank you for taking the time today to listen to me.

Thank you.