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Monday, 28 June 1999
Page: 6651


Senator CALVERT (5:45 PM) —I seek leave to have the three Regulations and Ordinances Committee reports incorporated in Hansard .

Leave granted.

The reports read as follows—

Standing Committee on Regulations and Ordinances

Senator Bill O'Chee

Scrutiny of Great Barrier Reef Marine Park Zoning Plans

On 30 June 1998 the Committee reported to the Senate on its continuing scrutiny of the Great Barrier Reef Marine Park Zoning Plans , see Annual Report 1997-98, p.91. The Committee advised that there were a number of important matters of continuing concern with these instruments. The Committee can now report that it has pursued the matter and has received assurances from the Minister which it considers acceptable.

The Committee's concerns related to what appeared to be an invalid subdelegation to officials of legislative powers to open or close considerable areas of the Great Barrier Reef to fishing, including recreational fishing and spearfishing, for periods of up to five years. These powers were to be exercised by instruments which were not even subject to tabling, much less to possible disallowance. In reply to the Committee's query the Minister provided advice from the Office of Legislative Drafting (OLD) in the Attorney-General's Department (AGD) that if the powers were legislative then they "certainly" should be provided directly by the Zoning Plans and thus be subject to full parliamentary control. The OLD advised, however, that the powers were in fact administrative and therefore valid.

The Committee reported that it was startled by this advice, which appeared to fly in the face of what it understood to be the difference between legislative and administrative powers. The Committee then asked the Minister for advice on the matter from the Office of General Counsel (OGC) in the AGD. The OGC advice, which accorded with the views of the Committee, was that the powers in question were "clearly" of a legislative nature. The OGC advice did not refer to the earlier advice from OLD. The Committee then suggested to the Minister that the Zoning Plans should be remade as soon as possible to correct the present unsatisfactory position.

The Minister responded to the Committee by providing further advice from the OGC that the powers, although legislative, would be likely to survive a court challenge to their validity on the grounds of subdelegation. The Committee replied that it did not accept this advice but that in any event it was a breach of parliamentary propriety to make legislative instruments which are not subject to tabling and disallowance. This was where the matter stood at 30 June 1998 when the Committee previously reported to the Senate on the Zoning Plans.

Since then the Committee has actively continued its scrutiny and, as noted above, has achieved what it regards as a satisfactory outcome. The Committee first wrote directly to the Attorney-General for more detailed advice on aspects of the legal position, with particular emphasis on the implications for the operation of the Legislative Instruments Bill. In this latter context the Committee wanted to be quite sure that the provisions of that Bill, if enacted, would apply to the instruments for which the Zoning Plans provided. The resulting opinion from the Chief General Counsel, Australian Government Solicitor, reviewed all the previous advice from the different areas of AGD and concluded that the provisions in question should be properly regarded as legislative. The Chief General Counsel also concluded, however, that the subdelegation of legislative power was not invalid. Nevertheless, the Chief General Counsel noted that, even if valid, there may be quite proper policy issues as to whether it is appropriate in all the circumstances to confer the delegated power. The Attorney-General advised that, in relation to the Legislative Instruments Bill, this latest advice would be drawn to the attention of the relevant officers.

Following this reply the Committee again wrote to the Minister asking that the decisions under the Zoning Plans be made subject to disallowance. The letter reads as follows:

2 December 1998

Senator the Hon Robert Hill

Minister for the Environment and Heritage

Parliament House

CANBERRA ACT 2600

Dear Minister

I refer to the three Great Barrier Reef Marine Park Zoning Plan Amendments about which the Committee has previously written to you.

As I mentioned in my letter of 30 June 1998 the Committee wrote to the Attorney-General about the Amendments and has now received an opinion of 24 August 1998 (attached) from the Chief General Counsel which confirms the view of the Committee and which indeed confirms earlier advice from the Office of General Counsel of 19 October 1997 and 16 January 1998 that the instruments are legislative. This is in contrast to earlier advice from the Office of Legislative Drafting of 2 and 5 December 1996 that the instruments are administrative.

The Chief General Counsel remains of the view, however, that although legislative the instruments are not invalid. The Committee does not accept this view, but whether or not the powers in the instruments are void it is a clear breach of parliamentary authority that such significant legislative instruments are not subject to parliamentary scrutiny and possible disallowance. On 30 June 1998 on behalf of the Committee I made a special statement to the Senate to this effect. I also draw your attention to the comments in the final paragraph of the opinion of the Chief General Counsel, viz. "Of course, even if the delegation is valid, there may be quite proper policy issues as to whether it is appropriate in all the circumstances to confer the delegated power on the authority." The Committee endorses this view and would appreciate your advice that amendments will be made to make the exercise of the powers subject to parliamentary disallowance. The present position is deficient in relation to transparency, accountability, sound public administration and parliamentary propriety.

The Attorney-General has advised that the OLD opinions of 2 and 5 December 1996 are subject to client privilege but that he had passed our request for copies of the opinions to the Authority. The Committee understands that the Authority would prefer a formal request from the Committee before the opinions are released and I now make such a request. The Committee notes, however, advice from the Attorney-General that the latest opinion from the Chief General Counsel will be drawn to the attention of relevant officers in your portfolio. The Committee would welcome your advice that if any of your portfolio areas have previously advised any person that these matters are administrative decisions then that advice will be formally withdrawn in favour of advice that they are legislative. In any event the Committee assumes that you have been doing this since October 1997.

In particular and importantly the Committee understands that there may be matters of litigation, grievance or dispute about the exercise of the powers. Here also the Committee would appreciate your assurance that your portfolio areas have clearly informed everyone affected that it has been the formal position of the Commonwealth since October 1997 that the powers are legislative and not administrative. It should be indicated to such people that they could argue that the powers are void. It would be a serious matter if any people affected or aggrieved about the exercise of the powers were not clearly informed by your officials of the official Commonwealth position.

Because of the importance of these matters the Committee would be grateful for an early reply.

Yours sincerely

Bill O'Chee

Chairman

Almost five months later, despite having asked for an early reply and despite reminders from the Committee staff, the Committee had not received a reply. It therefore decided that it would be helpful to discuss the matter with the Minister and Senator O'Chee and Senator Coonan did this on 29 April 1999. The Minister generously gave the Committee members as much time as they needed to state their case and in turn clarified aspects of his position. The Minister advised that the present round of closures and openings on the Reef was complete and that it was not intended to make any more until the end of the existing experimental period in 2001. However, any future determinations made after that date would be included in Zoning Plans which are subject to full parliamentary scrutiny and control. A subsequent Committee meeting agreed that this was a satisfactory outcome in all the circumstances. The Committee is therefore able to report to the Senate that all future activity in this important and sensitive area of protection of the Great Barrier Reef Marine Park will accord with parliamentary propriety.

The Committee is grateful to the Minister for the Environment and Heritage, Senator the Hon Robert Hill, for his personal attention to its concerns.

Bill O'Chee

Chairman

Senator Bill O'Chee

Chairman, Standing Committee on Regulations and Ordinances

Special statement on ministerial undertakings

One of the most important elements of the operations of the Standing Committee on Regulations and Ordinances is the practice of accepting undertakings from Ministers to amend or to take other action in relation to legislative instruments about which the Committee has concerns. The Committee accepts such undertakings even though amendment will take place in the future, in order to ensure that the implementation of policy and day to day administration of programs continues smoothly. When it accepts such undertakings the Committee withdraws any protective notice of disallowance which it has placed on the instrument, or refrains from giving a notice if it has not already done so. The Committee therefore relies on the good faith of Ministers to implement promptly any undertakings.

Prompt and timely implementation of undertakings is central to the success of the practice which the Committee has adopted. Failure to honour this principle could constitute a breach of parliamentary propriety and a breach of ministerial ethics. It is also deplorable because delay in implementation means that legislative instruments not only identified by the Committee but also accepted by the Minister as defective in relation to parliamentary propriety or personal rights, continue to be in effect and presumably be administered to the detriment of public life and to those people affected by the deficient instruments.

The Committee records and monitors the progress of ministerial undertakings and each Annual Report describes undertakings implemented during the reporting period and those which are still outstanding. Also, due to the efforts of the Committee, Explanatory Statements for instruments which implement undertakings advise of that fact. The Annual Report 1997-98 listed 87 instruments in relation to which undertakings had been implemented or were still outstanding. Unfortunately 42 of these were still outstanding and the Committee decided to take further action.

The Committee accordingly wrote to every Minister in whose portfolio responsibility there were outstanding undertakings, asking for reasons why the undertaking has not been implemented and for advice on when this would be done. The letter also asked for the date on which the portfolio agency had issued drafting instructions for the required amendments. The letter indicated that in the absence of a satisfactory explanation for delay the Committee intended to ask suitably senior agency officers to appear before it to explain the position in detail. The Committee asked if the matter could be given a high priority for attention.

The Committee can now report that it has received replies from Ministers which indicate that virtually all of the undertakings have been implemented, or that drafting of amending instruments has been completed or drafting instructions issued. This was pleasing, particularly because sometimes undertakings are qualified by saying that they will be implemented when the principal instrument is next amended. In several other cases a review of the program or an amendment of the enabling Act or the instrument had resulted in the concerns of the Committee not being met. In cases where a review was still in progress or was about to be initiated the Minister usually expressly assured the Committee that its concerns would be accommodated. In one case the Committee was advised that regulations had not been implemented due to an oversight, but that this would be rectified as soon as possible. Overall, the replies from Ministers demonstrated an awareness of the importance of an undertaking given to the Committee and of its prompt implementation.

The replies did, however, reveal one matter that was not satisfactory. In this case regulations gave an agency the power to decide subjectively which matters were relevant to arbitration of a dispute, and then to take them into account when making a determination. This provision was in contrast to two other provisions where the agency was either bound or permitted to take account of matters which are objectively relevant to the issue. In reply to the Committee's query, the Minister advised that the regulations would be amended at the next available opportunity to make them consistent. The Committee assumed that this meant that the power would be made objective, but it appears that the Minister meant that another of the powers would be made subjective. The Committee is pursuing this matter.

In two cases the Minister advised that, although undertakings had not yet been implemented by formal amendment, administrative action had been taken to meet the Committee's concerns pending amendment of the respective instruments. In each of these cases this was a less than satisfactory response because the deficiencies in question involved personal rights, which is an area where problems noted by the Committee should be addressed as soon as possible. One of the cases involved a lack of mandatory notice of safeguards for administrative penalties imposed by public officials, which the Minister advised was remedied by a detailed information sheet attached to infringement notices. The other case, which was particularly relevant in the light of recent discussion of the international organisation of the Olympic Games, concerned the Australian Sports Drug Agency Regulations made expressly to enable the Agency to provide leadership in the fight against the use of prohibited drugs in sport up to and beyond the Sydney 2000 Olympics. Here, following inquiries by the Committee, administrative action was taken to protect the rights of intellectually disabled athletes and of commercial companies dealing with the Agency. In both the present cases drafting instructions have now been issued.

In a number of cases Ministers had given an undertaking to amend the enabling or some other Act to meet the Committee's concerns. In one such case the required amendments had been passed by the House of Representatives but were still being considered by the Senate and consideration of another had reached an advanced stage with drafting instructions to be issued shortly. In another case the Minister advised that a particular program did not proceed and an undertaking was inadvertently overlooked. However, the Minister had asked the agency for advice on the amendments to the Act necessary to meet the undertaking and would advise the Committee when this was received. In two other cases the undertaking had been delayed due to the need to amend the enabling Act before implementation could be progressed.

Other undertakings were affected by changes in the enabling Act. In two cases the Minister advised that amendments of the enabling Act resulted in the particular undertakings becoming unnecessary because the relevant legislative provisions had been superseded. In another case the Minister advised that extensive amendments of the Act following a major review had delayed implementation of undertakings, although draft amendments of the required regulations had now been received. In another similar case the Minister advised that amendments of regulations which had now been finalised had been delayed by the commencement of amendments of the Act.

One particularly important area for the Committee to monitor is undertakings relating to national uniform legislative schemes. There are presently four separate undertakings outstanding to amend regulations made under the road transport reform national scheme, which provided for model laws which would then be enacted by all the States and Territories. The legislation also provided for a Ministerial Council which had to approve model laws and any amendment of them. The different Acts which set the broad framework of the scheme did not themselves include any substantive provisions regulating vehicles or traffic, but instead provided for this to be done by regulation. The Committee considered the regulations comprising the different modules of the scheme and over a two year period received undertakings to amend to remove strict liability offences, to provide for AAT review and to improve safeguards for administrative penalties. The Minister also advised that the regulations would not commence before the amendments were made. The Committee reported in detail on these undertakings on 19 September 1995, Senate Hansard p.976, and 12 March 1998, Senate Hansard p.892.

The Minister has now advised that amendments have been drafted in relation to two of the four sets of regulations although final clearance still has to be obtained from the Australian Transport Council and all of the State and Territory governments. However, this was acceptable in light of the Minister's assurance that the original regulations would not commence until amendments had met the Committee's concerns. The Minister also advised that it is unlikely that the other two will commence because a review was about to be initiated. The National Road Transport Commission has advised, however, that any revised regulations will take into account the concerns of the Committee.

There are a few matters arising out of this exercise which require further action, but in general the Committee can report that the position in relation to implementation of undertakings given to the Committee is broadly acceptable. The Committee intends to continue to monitor closely compliance with undertakings.

Bill O'Chee

Chairman

Regulation Impact Statements

Senator Bill O'Chee

Chairman, Standing Committee on Regulations and Ordinances

On 31 March 1999 the Chairman of the Productivity Commission, Mr Gary Banks; the head of the Office of Regulation Review (ORR), Dr Robyn Sheen; and Ms Sue Holmes, an official of the ORR, met with the Committee to discuss matters of mutual interest. The meeting followed the tabling on 10 December 1998 of the Productivity Commission's report Regulation and its Review 1997-98 .

The report was the first comprehensive statement on compliance with regulation review requirements, implementing the Productivity Commissioner's obligation to report annually on the Commonwealth's new, best practice procedures for making regulations. A core element of these requirements is the preparation of Regulation Impact Statements (RIS), which are intended to ensure that regulatory action is well informed and meets intended goals, while minimising any adverse effects on business and the community. The RIS requirements apply not only to regulations, but also to Bills, treaties and quasi-legislation.

The ORR, located within the Productivity Commission, has a central role in achieving the implementation of these initiatives. The two most important priorities of the ORR are to advise Commonwealth agencies on quality control mechanisms for regulatory proposals and for the review of existing regulations; and to examine all RIS prepared by agencies and advise on whether they provide an adequate level of analysis and meet the new requirements.

The establishment of RIS requirements has been one of the most significant recent developments in quality control of legislative instruments. At the State and Territory level this has generally been imposed by Act, whereas at the Commonwealth level it has been implemented by administrative direction, although the various editions of the Legislative Instruments Bill have included provisions for RIS. The elements of a RIS may vary between jurisdictions but typically they include:

an outline of the problem or issues which need action

the desired objectives of any action

. the different alternative options, including non-regulatory options, by which the desired objectives may be achieved

. an assessment of the impact, costs and benefits for business, government, consumers, and the community of each option

. mandatory consultation with the public and interest groups

. a recommended option

. a strategy to implement and review the preferred option

The Commonwealth RIS requirements were consolidated in A Guide to Regulation , published by the ORR, which was endorsed by the Government in September 1997. Since then the Committee has scrutinised the RIS, which are tabled, in addition to the Explanatory Statement, with all legislative instruments affecting business or competition.

The Committee has found the RIS to be of considerable assistance in its scrutiny of legislative instruments, despite the Committee having different priorities to the ORR. The Committee scrutinises delegated legislation to ensure compliance with high standards of personal rights and parliamentary propriety, whereas the ORR responsibilities are for the most effective and efficient regulations from an economy-wide perspective. These different objectives are by no means the same, but they are complementary and RIS have enhanced the ability of the Committee to carry out its functions.

The Committee has found RIS to be particularly useful because they are more detailed and thorough than Explanatory Statements in their background information. Also, RIS are structured in such a way that may reveal areas of especial concern to the Committee. For instance, every RIS must identify a problem which needs to be addressed and these problems are often set out with admirable frankness not usually seen in Explanatory Statements. These problems have included deficiencies in personal rights which have not been remedied for inappropriate lengths of time, or questions about validity which similarly have been left to continue for lengthy periods. The other parts of the RIS may similarly disclose difficulties about which the Committee will require further information from the Minister. This is not to say that RIS should displace Explanatory Statements, because the two emphasise different matters. Explanatory Statements are weighted towards the legal authority for the instrument and the provisions of individual clauses. The RIS, on the other hand, are weighted towards the goals of the instrument in the context of the competitiveness of business and the productivity of the economy.

The Committee closely scrutinises Explanatory Statements for deficiencies either in quality or quantity, taking the position that any such defects are breaches of parliamentary propriety. This view is emphasised by the fact that Ministers usually sign or initial tabled Explanatory Statements for regulations. Every year the Committee writes to Ministers about problems with Explanatory Statements. Sometimes these defects, although significant, are straightforward, with the Explanatory Statement simply not explaining or stating anything of value. Sometimes, however, the question is more serious. For instance, the Explanatory Statement for one set of regulations did not advise whether a statutory requirement to consult the Privacy Commissioner had been followed and, if so, what was the result of that consultation. Following inquiries by the Committee it was revealed that the Privacy Commissioner had indeed been consulted, but that his advice was overruled. The Committee then took action to have the Federal Executive Council Handbook amended to provide that such matters must be included, see the Committee's Annual Report 1996-97 p.73 and 81. The Committee also presented a paper to an Administrative Law and Ethics conference suggesting that there were questions about the ethical standards of the officers of the Department who had carriage of this matter, see the Committee's Annual Report 1997-98 , p.99.

The position is, however, different in relation to RIS. While the Committee carefully reads all RIS and, as noted previously, finds many instances of possible breaches of its principles, it does not scrutinise the actual processes in the making of a RIS or the adequacy of the RIS in complying with the administrative guidelines. The reason for this is that the development of a RIS is essentially a policy development process and the Committee always stays clear of policy matters. The success of the Committee in its core function of scrutiny of legislative instruments is due to the fact that Ministers know that it operates in a non-partisan fashion and does not question policy. The Committee finds RIS to be a valuable source of information, but it is not appropriate for it to become involved in policy development. The ORR is a specialist agency with the mandate to oversee the entire RIS process and liaison with the ORR along the lines of our recent meeting with the Chairman of the Productivity Commission and the head of the ORR will enable the Committee to be aware of any relevant developments. Also, the Senate legislation committees would scrutinise RIS in the course of their work. For these reasons, the Committee would be reluctant to become involved in arguments about the adequacy of RIS or other merits based issues.

There are several other areas where RIS are of particular value to the Committee. For instance, the scrutiny of national uniform legislative schemes presents special challenges for legislation scrutiny committees, see Annual Reports 1995-96, p.56 and 1997-98, p.83 . It is therefore encouraging that the Council of Australian Governments now has a mandatory requirement that new or amending regulations which are made by Ministerial Councils or national standard setting bodies are to have a RIS and comply with the Competition Principles Agreement. These requirements parallel these at the purely Commonwealth level and are supervised by the Committee on Regulatory Reform. As discussed in the special statements made to the Senate, the scrutiny of national schemes is difficult because of the tendency for Commonwealth, State and Territory Ministers to reply to concerns of scrutiny committees by saying that the schemes are the result of agreements between governments which cannot be changed. This has not affected unduly the operation of the Committee, which has accepted significant undertakings from Ministers to amend national scheme regulations and not to implement these provisions unless the changes were agreed to by the other Ministers. Nevertheless it is a concern.

The introduction of RIS for national uniform regulations is beneficial for the same reasons as for Commonwealth regulations. The RIS enable the Committee to have a much broader perspective on the background of uniform regulations, which will often be more complex than for legislation solely at the Commonwealth level. This may lead the Committee to issues relating to parliamentary propriety or personal rights which it may have missed if it had to rely solely on the Explanatory Statement. As with other RIS, the RIS here are usually quite candid in their comments on the development of regulations and these can be a useful source of inquiry.

Another function of the ORR is to supervise the national Legislative Review Program, which, like the RIS requirements, was established by administrative rather than legislative means. Along with the RIS, review and staged repeal is an important element in improving the standard of delegated legislation. Legislative requirements for this usually include the exotically named backcapturing and sunset provisions. The quantitative control of legislative instruments is important as well as the qualitative and this is another aspect of interest to the Committee.

Finally, the requirements for RIS, Explanatory Statements and staged repeal may change if the Legislative Instruments Bill is reintroduced and is enacted. Different versions of the Bill, first introduced almost five years ago, included provisions on these matters, but these should not change the functions of the ORR. Instead, they may emphasise its importance. The Committee will consider its options in the light of the actual provisions of any Bill.

The Committee discussed all these matters with Mr Banks, Dr Sheen and Ms Holmes and it is most grateful for the opportunity to explain its operations and to be briefed by an agency whose operations complement its own. Usually when officials of this seniority meet the Committee it is to explain some problem in a legislative instrument, but this was a more positive and welcome occasion.

Bill O'Chee

Chairman