Customs turns to intelligence in Canute-like battle to stem tide of illegal imports
by: Cameron Stewart
From: The Australian
May 05, 2012 12:00AM
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A STATUE of a soldier sits on the desk of Mike Pezzullo, chief operating officer of the Australian Customs and Border Protection Service. It harks from his days as a senior Defence Department official but it now sits as silent witness to a very different war being waged by Pezzullo and Customs chief Mike Carmody.
The battlefield is the nation's shipping ports and airports, where technology, globalisation and organised crime are changing the game of border protection at frightening speed, arguably posing the biggest challenge to Customs in its history.
The recent revelation that gun smugglers used a suburban Sydney post office to illegally import 150 Glock pistols, and media reports that crime syndicates are exploiting flaws in Customs computer systems to help smuggle drugs into the country, have placed Customs on the defensive.
"We know that criminals target our staff and our systems," admits Carmody. "I am currently working on a comprehensive overhaul to strengthen its security." But the scale of the challenge is daunting and little understood by most Australians, whose engagement with Customs officers usually begins and ends at the airport.
"The fairly antiquated notion which people have of the border security role is still of the friendly officer at the airport," Pezzullo tells Inquirer. "But there is a whole realm of other business which we have to undertake which is more akin to intelligence and law enforcement, which is very much done behind the scenes."
While most people might imagine Customs casts a comprehensive eye across all freight coming into Australia, the reality is starkly different. Its 5800 officers are unable to physically inspect more than a small proportion of all sea and air cargo and freight parcels that come into Australia.
Even if Customs had the resources to inspect all sea and air freight it would "gum" the economy, which relies on the timely release of imports, Pezzullo says.
"The time involved in doing this would involve far more resources, plus time penalties on Australian industry."
Only 100,000 of the 2.5 million shipping containers - one in 25 - are subject to X-ray inspection, while barely 1.5 million - one in nine - of the 13.9 million air cargo assignments are X-rayed. Of the 54 million air freight parcels received through the postal system, only 21 million are X-rayed.
Customs says these odds are not as tempting as they might look to criminals, because 100 per cent of cargo and freight is risk-assessed, and high-risk shipments identified during this process are subject to inspection. But former NSW detective Tim Priest says there is growing evidence criminals are exploiting poor security in the nation's ports and airports.
"The Glocks incident alone is the starting point for a full scale national inquiry," he tells Inquirer. "Customs and the federal government have absolutely no defence on this incident and it can only mirror much larger oversights of, say, drugs such as cocaine and methamphetamines, weaponry, etc, flooding into this country.
"We need a federal/state task force made up of state police, customs, crime commission, ASIO and immigration to tackle each and every port and airport in the country, including post office mail exchanges, to find out just how deeply embedded has organised crime become in the customs/ border areas."
Carmody warns that globalisation and technology are making Customs agents' tasks increasingly difficult. He says cargo movements to Australia are set to double by 2020 and this cargo is being moved more quickly through complex supply chains, making it harder to detect the tracks of organised crime.
"With cargo, the interconnectedness of the international community makes it increasingly challenging to identify the origin of goods and the routes taken before they arrive in Australia," Carmody said in a recent speech. "With the growing globalisation of the world economy, much of this growth will come from areas that may pose additional security risks to the Australian border.
"Economic integration and complexity provides criminal groups with more opportunities to obscure sources, origins, destinations and entities."
Another fundamental challenge is the rise and rise of online shopping for goods overseas, which has revived the parcels trade but made it much harder for Customs to keep an eye on what is coming through.
The post is considered the final frontier of border protection, and one yet to be properly scrutinised, even though Customs is aware it is being used to ferry in illicit goods such as drugs and firearms.
Faced with these challenges, and knowing it will never have the resources to police Australia's ports and airports with a fine-toothed comb, Pezzullo is trying to tilt the odds in Customs' favour by using brains rather than brawn.
Pezzullo, who joined Customs from Defence in 2009, is heading an aggressive push to mould Customs into an intelligence agency, where the gathering, analysis and use of intelligence information will govern the targeting of air and sea cargo more than ever before.
This trend began in earnest in 2008, when then prime minister Kevin Rudd used his national security statement to rename the agency and ensure it would task and analyse intelligence in tandem with other national security agencies.
In truth, Customs doesn't really have much choice but to tread this path. If the agency doesn't have the resources to randomly screen even a modest portion of incoming cargo to Australia, then it needs to be highly selective about the cargo it does inspect.
Under Pezzullo, an intelligence team of about 480 analysts, spread across the country, are developing more advanced and complex risk-assessment models for cargo which take into account a myriad of factors. These go far beyond basic issues such as countries of origin, ports of transit, nature of goods and identities.
Pezzullo declines to reveal more about the modelling, but says it mirrors the traditional intelligence work done by the established spy agencies.
"We have sought to professionalise the risk-assessment intelligence and targeting functions and make it able to operate at the same level as the more classic national intelligence security agencies," he says. "We identify patterns, information gaps (and try to assess) the course of action which people are likely to take."
He says 85 per cent of the 4052 firearms and accessories found over the past three years were detected as a result of targeted intelligence assessment, as were about 96 per cent of drug detections.
Pezzullo believes Customs is winning the battle and points to the sharp increase in the number and weight of border drug detections in 2010-11. Customs had 15,494 drug detections in 2010-11, compared with 9462 in 2009-10.
But couldn't this increase in detections also reflect a much larger assault on our borders by organised crime, rather than better work by Customs?
"You could run that theoretical argument but I don't agree with it," Pezzullo replies. "We have other indicators which tell us otherwise. It's not a regulated market, so you don't really know, but if you go on prices of different types of drugs we are not being hit with more drugs across all drug types. If we were, we'd be seeing that in admissions to hospitals and movements in the price of different drugs."
Customs is also caught up in the controversy over the spate of shootings in NSW. Pezzullo is concerned some high-powered guns are getting through the customs net but says most guns are being recycled in the domestic market rather than newly imported. "Our current view is that the domestic black market continues to be the main source of illegal firearms but we are still concerned about the potential for illegal imports, mainly with higher velocity, more capable weapons."
As well as trying to prevent criminals from exploiting its electronic systems, Customs is also stepping up efforts to root out corrupt officers who pose arguably the greatest threat to the integrity of border control.
More than a dozen Customs officers are under investigation for corruption or integrity-related offences. Customs, at its own request, has recently come under the oversight of the federal anti-corruption body, the Australian Commission for Law Enforcement Integrity, although critics point out ACLEI is an under-funded minnow that lacks the clout to keep a close eye on the vast Customs network.
Despite these challenges, Pezzullo says Customs is now using its intelligence arm more effectively than ever. "The emphasis (now) is really on the intelligence," he says.
"Making risk judgments based on intelligence ... that is the future.
