Senator PATTERSON (1:52 PM) —I thank honourable senators for their contributions to the debate on the Electronic Transactions Bill 1999 . The government is well aware of the wide range of important issues raised by the development of electronic commerce in Australia. Honourable senators should know that we are, in fact, addressing these issues. I refer honourable senators to the government's strategic framework for the information economy which was issued in December 1998 after an extensive period of public consultation. The strategic framework identifies 10 strategic priorities that the government is addressing to ensure the smooth and rapid development of the information economy in Australia. More importantly, the framework addresses these priorities in the context of the government's clearly stated vision for the development of the information economy in Australia.

It is neither possible nor desirable to deal in this bill with all the legal issues raised by electronic commerce, which does not affect a discrete area of law but touches on everything we do. In that context, the aim of this bill is simple: it is to ensure that the community in general, and business in particular, will be free to use electronic communications to satisfy existing legal requirements in a way that is consistent with international developments.

Senator Lundy raised a number of questions, a couple of which were covered also by Senator Stott Despoja. One of them asked why the government does not use the full extent of the Commonwealth's constitutional powers, as recommended by the expert group, to enact a law that applies to all of Australia. Some comments have been made—I think by Senator Stott Despoja—about the Commonwealth's constitutional power to apply the Electronic Transactions Bill to states and territories. There is some doubt about whether the Commonwealth has a power to apply such electronic transactions legislation to the laws of the states and territories.

Before I seek to incorporate some of these answers into Hansard, I will just mention this. In 1991 I was at a Constitutional Centenary Foundation meeting, where we were discussing constitutional reform. I have to say that the republic was not one of the most important issues in that debate, but one of the major issues was whether our Constitution could sustain us through enormous changes in globalisation. After that debate, even though it may not be totally behind us, maybe it is appropriate for us now to think about other issues of the Constitution, like the ones that were raised by the Constitutional Centenary Foundation. That debate was railroaded—I will not be provocative and say how it was railroaded—onto a debate about the republic when there were issues like this that need to be addressed, as this debate highlights.

I have four questions that were posed, not directly but in essence in the form in which Senator Lundy proposed them, and quite extensive answers. I seek leave to incorporate those answers into Hansard.

Leave granted.

The document read as follows—

Issue 1: constitutional scope of the Bill

Why doesn't the Government use the full extent of the Commonwealth's constitutional powers, as recommended by the Expert Group, to enact a law that applies to all of Australia?

Some misguided comments have been made about the Commonwealth's constitutional power to apply the Electronic Transactions Bill to the States and Territories. There is doubt that the Commonwealth has power to apply a law like the Electronic Transactions Bill to the laws of the States and Territories. There would be real concerns about the validity of a Commonwealth law that sought to directly govern the interpretation and effect of State legislation.

It is the Government's view that a constitutional challenge to a comprehensive Commonwealth scheme for electronic commerce would create enormous uncertainty.

The Government prefers to take a cooperative approach with the States and Territories to develop the appropriate legal framework for electronic commerce. Relying on the full extent of the Commonwealth's constitutional powers in this area to achieve national policy goals is not the preference of this Government. Indeed, this area of national law reform has seen considerable cooperation from the States and Territories. Everyone recognises the need for swift and uniform action. In such a situation it is not necessary for the Commonwealth to use the Constitution as a coercive instrument.

Of course, in the appropriate circumstances the Commonwealth will rely upon all its constitutional powers. For example, a range of constitutional powers are recited in section 12 of the Year 2000 Information Disclosure Act 1999. However, that legislation is a special case. The inexorable approach of the year 2000 meant there was considerable urgency in the need for its enactment and for it to have national application.

In addition, that Act operates for a limited time. The Electronic Transactions Bill will continue to shape the interpretation of all Commonwealth legislation for the foreseeable future.

In such a situation, a cooperative approach with the States and Territories is clearly more desirable.

Issue 5: need for digital signature laws

Why hasn't the Government developed special laws for digital signature technology?

The Government has recognised that the confidence of Australian businesses and other users in the security and authenticity of their online transactions can be increased by facilitating the use of, and access to, authentication and encryption technology and systems.

The Bill adopts a generic principled approach to electronic signatures, setting minimum technology neutral standards for an electronic signature to be legally equivalent to a hand written signature. These standards are based on the UNCITRAL Model Law on Electronic Commerce.

The Electronic Commerce Expert Group recognised that it is not appropriate for legislation to `lock in' particular forms of electronic signature technology, particularly when there are no internationally agreed rules for laws on electronic signatures. While a number of jurisdictions internationally have developed legislation, it is still too early to tell whether it impedes or assists business. Legislation that was too prescriptive in this area would run the risk of stifling business innovation and investment in electronic commerce. The Government has balanced the need for certainty against the need for flexibility in achieving this result, and this balance has been generally supported by public comments we have received. However, if the market indicates that there is a clear need for more prescriptive legislation in this area in the future then it will be considered. To date, however, there is no compelling evidence of a need to adopt this approach. Concerns about the need for a legal regime for digital signature are often based on uncertainty about the trustworthiness and security of electronic transactions. It is these kinds of concerns that the National Electronic Authentication Council has been established to deal with.

The Council is a new peak body that will oversee the development of a national framework for electronic authentication of online activity and enhance business and consumer confidence in systems for authenticating electronic commerce transactions. The Council will provide a national focal point on authentication matters.

Issue 6: protection of consumers

Why doesn't the Bill contain any provisions to protect consumers involved in electronic commerce?

The Government is committed to enhancing online consumer protection. The Minister for Financial Services & Regulation announced the establishment of an Expert Group on Electronic Commerce on 17 September 1999. The Expert Group will provide advice on a range of consumer issues related to electronic commerce and promote innovative policy initiatives.

The establishment of the Expert Group was one of the initiatives contained in the detailed exposure draft Policy Framework for Consumer Protection in Electronic Commerce which Minister Hockey released on 26 May 1999. The framework outlines the Government's objective of creating a world class consumer protection environment for electronic commerce in Australia. The initiatives proposed under the Policy Framework include a Model Code of Conduct for traders on the Internet. Work on the development of the Model Code of Conduct has now begun and a draft will be released for public comment later in the year.

This is in addition the protection offered to consumers by the existing legal framework including the Trade Practices Act 1974 and State and Territory fair trading legislation.

Australia is playing a significant role in international work to ensure adequate protection for consumers online. Australia is working with other OECD countries in drafting Consumer Protection Guidelines for Electronic Commerce. The guidelines will be finalised during 1999 and will provide a framework for future multilateral cooperation between governments.

Australia's principal consumer protection enforcement agencies, the Australian Competition and Consumer Commission and the Australian Securities and Investments Commission have been active in enforcement in online commerce.

Issue 8: Exemption from clause 11, production of documents

Why is the exemption in subclause 11(5) for the activities of the Department of Immigration in the Bill rather than in regulations?

It is particularly important that clause 11 which allows the production of documents in an electronic form, should not apply to the legislation administered by the Minister for Immigration and Multicultural Affairs. The production of original documentary evidence in support of visa or citizenship processes is of fundamental importance to maintaining the integrity of the visa and citizenship processes.

The Bill has a two-step implementation process and, during the period until 1 July 2001, the Bill will only apply to specified laws of the Commonwealth. During this implementation period, regulations will be used to specify the laws of the Commonwealth to which the Bill will apply. After 1 July 2001, the Bill will apply to all laws of the Commonwealth unless specifically exempted. It is the Government's view that any permanent exemptions from the application of the Bill should appear on the face of the Bill. When the implementation period ends, the regulation making powers will be used primarily in situations where an exemption is required as a matter of urgency—for example, where an agencies IT systems fail for a considerable period of time and it is appropriate for that agency to stop accepting information electronically.

The Minister for Immigration and Multicultural Affairs identified the need for an exemption from this provision early on in the process of developing this law. It was appropriate to insert the exemption into the Bill when it was developed.

Senator PATTERSON —I thank honourable senators for their contributions. I commend the bill to the House and indicate that the government will be supporting the Democrats amendment.

Amendment agreed to.

Original question, as amended, resolved in the affirmative.

Bill read a second time, and passed through its remaining stages without amendment or debate.