The Special Commission into sexual abuse in the Hunter is about the importance of a fundamental principle - the separation of church and state, writes Suzanne Smith.

It is the genesis of decades of suffering, the silent wrecking ball in our community behind too many broken families, too many lost and shattered lives and too much pain." (Joanne McCarthy, The Newcastle Herald, 2012)

For many victims and their families in the northern NSW region of the Hunter, today will be a historic day.

It is the first day of hearings by the Special Commission of Inquiry set up by the premier Barry O'Farrell to investigate the police investigations into two notorious paedophile priests; Father James Fletcher and Father Denis McAlinden.

The Terms of Reference for the next two week's inquiry is about the "circumstances in which Detective Chief Inspector Peter Fox was asked to cease investigating relevant matters and whether it was appropriate to do so."

Which brings us back to the fundamental question; why has there not been, until fairly recently, a more concerted effort by the police to investigate, with the full resources and power of the law, the most senior members of the clergy? Some police have done a tremendous job but in very difficult circumstances. Troy Grant, the current National Party MP from Dubbo, successfully prosecuted Father Vincent Ryan who had 31 victims in the Hunter. One of his victims was awarded the largest payout in Australia's history; a sum of $3 million.

In 1996 at the age of 25, the then Senior Constable Troy Grant applied to have a senior clergyman, Monsignor Patrick Cotter charged with Misprison of Felony (covering up of crimes of another). It was the first time in Australia's history that a senior member of clergy would have been charged with the crime. The NSW Department of Public Prosecutions said Cotter was too frail, and they wouldn't take it to trial. Troy Grant persisted and wanted to pursue a charge of "attempting to pervert the course of justice." This arose after Monsignor Cotter tipped off Father Ryan about the police investigation. Again the DPP declined to carry it through to trial. For Troy Grant, haunting questions remains:

What really burns within me is what impact or influence on the church's response to these abhorrent issues a prosecution might have had, had the DPP gone ahead and prosecuted.. How many victims after 1996 might have been saved? I ask myself "Did I do a good enough job?" The DPP would not consider the level of culpability by the church. Even if we had lost, it was in the community's interest to make a stand and pursue the senior clergy who had responsibility for these priests.

The failure of the law enforcement bodies to pursue senior clergy until recently is one issue but more importantly is the notion of the separation between church and state. It is a complex question about loyalty, about beliefs, about cultural blindness.

As someone brought up in the Catholic faith, and whose family still holds those beliefs, I understand the power and influence of all those years of Catholic teaching and attendance at Mass.

We are taught to believe the Catholic Church is essentially good. It could not be bad or evil. Many of the teachings were about being good, and doing just works. There was no room for questioning. To a great extent, the teachings and the pastoral care are based on the best notions of love and caring.

The question to be asked however, is how do some serving police of the Catholic faith, distinguish between their Oath as an officer and their loyalty to their church. In the Maitland-Newcastle diocese there were instances of officers who were called upon to investigate priests with whom they had close relationships. Did those police always follow proper protocols? This will be tested in the Hunter Inquiry but also in the Royal Commission.

This issue of potential conflicts of interest affected not just the lower levels of the police but also in the higher echelons of state institutions. Recently I did this story for Lateline about an internal Catholic Church body called The NSW Professional Standards Resource Group. It was an "expert panel" of lay people, a former parliamentarian and a serving officer from the Sex Crimes Squad.

For eight years 1996 to 2004, a serving NSW police officer from the Sex Crimes Squad reviewed the church's investigations into victims' complaints. The church did not provide any names of victims to "protect confidentiality" and a NSW police spokesman, told Lateline the alleged perpetrators names were also kept from the officer. Former head of the DPP from 1994 to 2011, Nicholas Cowdery QC says he has "serious concerns" about a potential conflict of interest;

The problem with that is that a police officer doesn't leave behind his or her oath of office until they retire, so when the police officer comes into this body that officer… is obliged to enforce the law and take any action in that regard. Well the church may say we just wanted a police officer as a private individual or citizen but with the experience gained as a police officer, but that is no answer, because it places the officer in an impossible position and it is clear the police officer was not involved in all the proceedings of that body.

This participation of this officer was approved by the NSW Ombudsman's office and the NSW Police. The NSW Ombudsman ruled out any conflict of interest.

But Greens MLC David Shoebridge says the police should never have accepted the church's view that the victims did not want the police to know their names:

No Police Officer should simply accept a statement at face value when an organisation is saying the victims are happy, they have had a handshake, and the victims wish to remain anonymous. When the police are being told that the victims don't want to go to the police, there remained an obligation on the police to withdraw from the process and make their own independent inquiries. The Royal Commission not only needs to look at issues of collusion but also at the cultural pressures that were at play when we have had victims go to an internal church process, fearful of the authority of the church, spiritually conflicted and then effectively get battered down in the process.

It is important for society to understand how the important distinction between church and state became blurred for so long. Without this examination, history is likely to repeat itself... something we must all strive against.

Suzanne Smith is an award winning ABC television and online investigative journalist. She is currently a senior investigative reporter for Lateline. View her full profile here.