The Northern Territory’s “problematic Super Inspector” position to oversee the recently created Office of the Integrity and Ethics Commissioner, that the CLP Government filled with former ICAC inspector Bruce McClintock, has been flagged by a national organisation as “a good example of how oversight can go wrong” with integrity bodies.

A new report by the Centre for Public Integrity into the independence of integrity agencies across the country, titled “Securing Functional Independence for Core Integrity Agencies”, examined the institutional design features of every state and territory’s integrity agencies to determine whether they function with proper independence.

The NT’s new Office of the Integrity and Ethics Commissioner, which rolled all previous integrity bodies including the Office of the ICAC, Office of the Ombudsman, Information Commissioner and the Health Complaints Commission into the one body, was previously criticised by the CPI and other integrity organisations for its rushed formation and failure to provide the necessary hallmarks of independence from government, which the report expands on.

The CPI report determined that institutional independence for integrity bodies should include three essential dimensions – that they have “institutional distance” from the executive branch of government, that they have “appropriate accountability” through oversight mechanisms that do not weaken its independence and that all appointments are merit-based.

The NT’s new IEC body, it was determined, does not conform with those principles.

Concerns were previously raised by several integrity bodies about the appointment of IEC Commissioner Peter Shoyer and IEC chief executive Reece Kershaw because the NT’s legislation does not clearly establish independent appointment frameworks.

There was no recruitment process for the chief executive role before it was filled by the government and Chief Minister Lia Finocchiaro has refused to explain how a national recruitment campaign for Commissioner ended in the selection of former NT ombudsman Mr Shoyer from an unknown number of applicants across the country. It was later revealed head public servant Luccio Cercarelli was on the selection panel that chose Mr Shoyer, along with Justice Peter Barr and semi-retired, long-serving public servant Greg Shanahan.

The new CPI report recommended reforms to strengthen integrity and independence in integrity bodies, including that legislated merit-based appointment processes be established in legislation that require the involvement of proper independent selection panels and non-government dominated parliamentary oversight committees.

It also recommended separate funding arrangements for integrity agencies involving an “independent funding panel” rather than the executive, as well as that “robust but carefully designed oversight mechanisms” are established that are independent.

During its examination of oversight mechanisms of integrity bodies across the country, the report highlighted a case study from the NT it called the “Northern Territory’s Problematic ‘Super Inspector'”.

“The newly created Integrity and Ethics Oversight Inspector in the Northern Territory is a good example of how oversight can go wrong,” the report stated.

“This Inspector has vast power not just to investigate complaints about either the Commissioner or the Auditor‑General. The Inspector also has power to manage any conflicts of interest that arise because the newly created Commissioner role simultaneously heads multiple integrity offices, from the anti-corruption commission to Ombudsman to information commissioner role [to health complaints commission].

“This powerful position, however, is not independent of the executive [branch of government]. The executive has full discretion to appoint the Inspector and determine the terms and conditions of employment.”

Mr McClintock was announced as Inspector of the new Integrity and Ethics Commissioner office this month without going through a public appointment process, with Ms Finocchiaro telling Parliament he was appointed because of his “experience and demonstrated performance” as ICAC Inspector.

The CPI report also drew attention to the fact that the new and previous Inspector has a small staff of people “‘made available by the chief executive officer’ of an executive agency under an ‘arrangement’ with the Inspector” that it said was not ideal.

“This reliance on staff seconded from government agencies who are potential subjects of the Commissioner’s and Inspector’s oversight, introduces another conflict of interest into the oversight system,” it said. “Moreover, it also gives the executive another powerful lever to control the actions of the Inspector.”

Mr McClintock’s use of departmental staff while ICAC Inspector was thrust into the spotlight by the NT Independent in 2021, when it was revealed that a senior public servant who was investigated by the ICAC over allegations she manipulated a procurement contract had access to the ICAC Inspector’s email account and sensitive documents before she was investigated because of her role “assisting” Mr McClintock with administrative functions.

McClintock says no better way of doing things than the way they’re being done

Mr McClintock rejected all of the report’s comments about his role, stating his power to oversee all of the NT’s integrity bodies himself while answerable to nobody was “not vast” and said there was no better mechanism for oversight than an Inspector position.

“I should add that I regard the passage from the CPI paper you mention [about the role of Inspector] as betraying a degree of ignorance of the real world in general, and that of the Territory in particular,” he said.

Mr McClintock argued that it was “silly” to suggest his independence could be compromised by the executive government appointing him and setting the terms of his employment because that’s the way it has always been done.

“Every NACC, ICAC, IBAC and CCC head and every Inspector is appointed by the executive of the particular jurisdiction which determines the terms and conditions,” Mr McClintock said.

“So, I might add, is every judge in Australia. The suggestion that independence is compromised as a result is fatuous. Once you are appointed, you are independent.”

But the CPI report recommended that integrity agencies should also be subject to secondary oversight from a non-government-dominated parliamentary committee, with a non-government member as chair.

Asked about the issues that were raised in 2021 around his use of staffers from the Department of Chief Minister and Cabinet and the effect it had on public confidence and the potential for a similar issue raised in the new report, Mr McClintock said there was no alternative for staff.

“I fail to see how else it could be done in the Territory,” Mr McClintock said.

“If I had an office and staff independent of Chief Minister’s, it would cost at least $250K per annum, a cost to the Territory which cannot be justified, given the previous or anticipated amount of work on the part of the Inspector.”

The total cost to taxpayers to pay Mr McClintock has never been disclosed, with total annual costs buried somewhere in the DCM&C budget, which Mr McClintock recommended because he determined that it would be “inappropriate” for his “office” to be an expense of the Office of ICAC – ironically due to conflict of interest concerns.

According to his latest annual ICAC Inspector’s report for the 2024-25 financial year, Mr McClintock is receiving “administrative support” from DCM&C deputy chief executive Jean Doherty and her staffer Mel Griffiths, with Mr McClintock stating both have signed confidentiality agreements with him. The department staffers have access to his Inspector email account and other sensitive documents.

Mr McClintock was appointed Inspector of the ICAC in September 2018 for one five-year term with the legislation later changed by the then-Labor government to permit him another five-year term that commenced in December 2023. The CLP Government moved him into the new Inspector role of the IEC earlier this month after Mr McClintock co-authored a review recommending the creation of the IEC.

He said there was no conflict of interest in that because the “new Inspector framework is not mentioned in our report”. It appears the section pertaining to the duties of the Inspector in the ICAC Act was simply moved into the new IEC Act.

Ms Finocchiaro previously said his latest appointment would “align with the tenure of [his] existing contract”.

Mr McClintock suggested the public can trust him to identify and manage conflicts of interest should they arise.

“Further, if a situation arose in which I felt there was a conflict, I would disqualify myself and arrange, as the legislation permits for someone else to do the job,” he said.

“What you don’t seem to understand is that the issue is never simply whether there is a conflict of interest – such conflicts are a daily occurrence. The only question is how they are managed.”

There is nothing in the IEC Act requiring any public disclosure of conflicts of interest or how they are managed by the agency or the Inspector.