A move to rescind temporary powers handed to the NSW corruption watchdog allowing it to use potentially illegal recordings in investigations has failed.
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The Independent Commission Against Corruption (ICAC) was controversially granted the exemption by the state's attorney-general last month, at the request of its chief commissioner, John Hatzistergos.
The recordings ICAC was seeking to use related to a probe into the alleged stacking of a Liberal-held Sydney council in order to influence planning decisions linked to fugitive developer Jean Nassif.
Critics including Opposition Leader Mark Speakman condemned the move, saying it allows ICAC to use the powers in relation to any investigation until the end of 2025.
The coalition offered an alternative change to the powers, which would limit them to just the one relevant investigation.
On Thursday, Liberal Democrat John Ruddick moved a disallowance bill in the upper house to block the regulation, a move that was supported by the coalition.
"ICAC does not stand for 'the Infallible Commission against Corruption'," Mr Ruddick told the house.
"Those that work at ICAC are themselves human and can at times misuse power."
Following a debate, the motion was shot down with 15 voting in favour and 24 against on Tuesday evening.
The opposition leader said Labor and the Greens had voted down an opportunity to improve the "rushed" regulation.
"Instead ICAC can now use or publish any existing or even new surveillance recordings made by private citizens without a warrant on any matter for years," Mr Speakman said in a statement.
Premier Chris Minns previously defended the temporary changes to ICAC's powers, saying the alternative was restricting them to the Liberal-linked investigation and being accused of making a politically motivated decision.
Independent MLC Mark Latham opposed the disallowance bill saying corruption of any size should be stamped out wherever possible.
"It's an extraordinary regulation, to match an extraordinary request, in an extraordinary circumstance," Mr Latham told the upper house.
Greens MP Sue Higginson also opposed the disallowance motion, saying ICAC is subject to intense scrutiny and had in the past delivered "serious wins" for the community.
"One of the questions that certainly I interrogated was whether we could limit this to perhaps one particular operation or investigation," Ms Higginson said.
"The reality is that we don't know yet the scope and scale of the material that ICAC holds."
Australian Associated Press
