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Tuesday, 13 June 2006
Page: 2


Senator LUDWIG (12:32 PM) —The Royal Commissions Amendment Bill 2006 can be summed up in the four words that were used to sum it up in the other place: too little, too late. It is too little because it does nothing to address the key obstacle to Commissioner Terence Cole uncovering the whole truth about the wheat for weapons scandal, and we all know what that is. It is the restrictive terms of reference that Commissioner Cole has to operate under. It is too late because the little it does do should have been done months ago. Labor recognised the problem back in March. If this issue had been addressed then, we would have avoided the expense and delay of the Federal Court case, which told the government what Labor told them for free—that we need action to stop the abuse of legal professional privilege to obstruct the inquiry.

Having recognised that problem in the first place, Labor supports this bill to remedy the problem. However, it should be clear to all senators that this bill is no solution to the real problem affecting Commissioner Cole, and that is, as I have said, his restrictive terms of reference—and I will come to that later—which this government has to take responsibility for.

This bill, in particular, will make amendments to the Royal Commissions Act 1902. The amendments will have an effect for the current inquiry into the involvement of Australian companies in the UN oil for food program and that is why we are dealing with the legislation here today not only promptly but urgently. However, the bill will also have a more lasting effect for all future commissions exercising powers under the act. The bill will provide a special procedure for commissions to determine the validity of claims for legal professional privilege over documents a commission seeks. Of course, legal professional privilege is a common law rule of evidence that prevents courts from requiring the production of evidence that would disclose confidential communications between a lawyer and their client. It is an important principle of justice, as clients should feel free to be able to provide full instructions to their lawyers so that lawyers can provide complete and accurate advice. This freedom is compromised if clients fear that their instructions could subsequently be used against them in a court.

However, legal professional privilege does not apply to all communications between a lawyer and their client. In order to attract the privilege the communication must have been made with the dominant purpose of either obtaining legal advice or in relation to actual, pending or reasonably anticipated litigation. As a result, not every claim of legal professional privilege is a valid one. It does concern Labor that we may be seeing an increasing trend for some companies to make exaggerated claims of privilege or to conduct certain business affairs in the presence of lawyers simply to form the basis for a later claim of privilege. We have seen examples of this in the current AWB, that is, the Australian Wheat Board, case, and to some extent in the James Hardie case before that. Parliament does have the opportunity to send, and should send, a strong message that this simply is not on. To properly protect the privilege we cannot allow it to be misused. Legal professional privilege is intended to be a safeguard in our system of justice, which relies on openness between lawyers and their clients. It is not meant to be a cloak for hiding unlawful conduct.

The bill does go some way to sending that message to businesses and others that might want to hide under that cloak by streamlining the process for assessing claims of privilege in the context of royal commissions. This should be a disincentive against making trumped-up claims by ensuring that the onus to pursue privilege claims lies with the claimant, not with the commission. It would provide that legal professional privilege remains a reasonable excuse for failing to provide requested documents to a commission only if either a court or a member of the commission has accepted that the document is in fact privileged.

However, under this bill a member of a commission would be empowered to demand by written notice the document for at least inspection in the first instance. Inspection could be made by either the member or a person authorised by the member—for example, an adviser. If the claim is accepted, the commission would be required to disregard the document for the purpose of any report or decision the commission makes.

The first question of course is: why is this bill necessary? It has clearly, in the context of this debate, been brought forward by the government to solve a problem. It is necessary because of a Federal Court case involving the Cole commission—that is, AWB Ltd against Cole. This case involved precisely the sort of exaggerated claim I am talking about today. AWB claimed privilege over the now infamous draft statement of contrition—not everyone will recall it, but I know many here in this chamber and certainly many in the gallery will—which had been produced in December 2005. Commissioner Cole determined that privilege was not attached to the document and there was no reasonable excuse for it to be withheld. AWB then applied to the Federal Court to order Commissioner Cole not to use the document. The Federal Court found that the document was not subject to privilege on the rudimentary ground that it had not been produced and circulated for the dominant purpose of obtaining legal advice. In short, it was produced for the purposes of public relations, not legal advice—and AWB’s public affairs department went into overdrive on that.

However, the court cast serious doubt over whether the commissioner also had the power to demand to inspect the document in order to make a determination on the claim of privilege. Ultimately, the court did not make a binding determination on the issue, but it did point out that, in principle, privilege would prevent the commission from inspecting a document over which privilege is claimed and that any abrogation of legal professional privilege to allow such an inspection could only be made by clear and unmistakeable language in the RCA, not merely by implication.

So that is the vital change that this bill makes. In providing a special process it makes it crystal clear that a commissioner can demand to see a document in order to make his or her determination over the matter of whether it can be admitted into evidence. The fact is that determining whether a document meets the dominant purpose test of legal professional privilege often requires the decision maker to see the document. In the House of Representatives, the shadow minister referred to concerns that were raised by the Law Council about the possibility that commissioners could be prejudiced by seeing documents that are later held to be privileged. It is a point that to make a determination you need to see the document. The Law Council raised the issue of whether that would prejudice the proceedings. As the shadow Attorney-General indicated, we are satisfied that adequate safeguards are in fact in place to prevent this problem.

Labor is convinced that this bill merely streamlines the process by putting the onus of commencing litigation on the claimant, not the commission. This should deter false and exaggerated claims as well as reducing the incidence of litigation—and the expense and delays that go with it—during the life of the commission. But let me make it clear that this bill does not in any way affect the substance of legal professional privilege or the protection it affords to lawyers and their client communications.

Having described what the bill does, I want to make it absolutely clear to the Senate what this bill does not do. The bill does not remove the obstacles to a full investigation by Commissioner Cole into the wheat for weapons scandal. The bill does not address the restrictive terms of reference with which the government has restricted the inquiry. The bill does not demonstrate any serious commitment to a full, open and transparent inquiry into what really happened behind the Iraq kickbacks scandal and how deeply this government is embroiled within it. Whether this bill passes or not, Australians can have no faith that the Cole commission will get to the whole truth of this shameful episode while it has the restricted terms of reference that have been provided to it by this government.

As I said, the reason for that is that this government has imposed terms of reference that restrict the inquiry. These terms are like blinkers, designed to deprive the inquiry of its peripheral vision, where if it focused its attention it might find a whole lot more. The Minister for Foreign Affairs, the Minister for Trade and even the Prime Minister himself might be examined a little closely because, when you look at their responsibilities, questions remain about whether they have failed in their responsibilities to protect the good name of Australia, questions remain about whether they have maintained an openness of government and questions remain about whether officers or ministers may have breached administrative law, international law or criminal law in Australia. We will perhaps for some time question whether the Cole commission might, with wider terms of reference, have found the answers.

It is very important to look at those sorts of issues, because in such an issue as this there should be no doubt that the Cole commission should have full and open powers to investigate all of the issues so that in the end, whatever the result might be, we can come away with the confidence that all of those stones that should have been turned over have been turned over and that everything that should have been brought to light has been brought to light and examined in the cold, hard light of day. But when you have a government that has imposed terms of reference which seek to constrict the ability of the commission to look under all of those rocks then you do have a problem—a manifest problem within government. You have to ask: did this government turn a blind eye, or was it involved in a systemic operation to undermine the Iraq sanctions regime? These questions will preoccupy us for some time, I suspect. It is an issue that goes to the heart of the integrity and competence of this tired government.

Let us not forget what happened here. An Australian company, not just any company we sometimes like to talk about but an Australian company that was Commonwealth owned for some time and to this day retains a Commonwealth sanctioned monopoly on the export of wheat, paid over $300 million in kickbacks to the regime of Saddam Hussein. At the same time Australia was a party to the United Nations sanctions against Iraq and the Australian government was preparing for war against Iraq to remove Saddam as a dictator. The bottom line is that, while the Australian government was asking our men and women in the Navy to participate in a blockade against Iraq, AWB was paying out $300 million. You have got to ask yourself: was the AWB undermining those efforts being made by paying kickbacks to prop up that very same regime? When you look at that scenario you do have to ask: how do the people who put that effort and energy in on behalf of our Defence Force in serving our country feel? How do they feel about this government who may have turned a blind eye and who may have not done the right thing by them? I cannot speak for them but you would have to put a question mark about how they feel about their operation. They would want to be proud to be serving this country and representing us internationally and they would want to be proud to hold their heads up and say, ‘We are doing the right thing internationally.’ They would not want to have that feeling in the back of their minds that there was a company, AWB, paying kickbacks to Saddam Hussein and they would wonder what kind of involvement the Australian government may have had.

We need to know what role the government played in the scandal. It could have been sheer incompetence. It would not be surprising; they seem to have demonstrated it everywhere else. They could claim sheer incompetence. They could put their hand up and say, ‘It was just absolute incompetence on our behalf.’ That is probably their best defence. Was it a failure to read cables, pick up the 29 warnings or take the necessary action? In the foreign minister’s case was it failure to follow up his own requests for more information, scribbled in the margin of one of the cables he did not apparently bother to read? It is all of that. That is the government’s best argument in all of this, I have to say: that they were incompetent, or maybe we will even accept lazy. Or perhaps, more plainly, they were just stupid. These are ministers with front-line responsibilities for our national security and economic wellbeing, but it seems that they do not read cables.

Should we accept incompetence as a defence or was it more than that? Was it wilful blindness? I do not know. Was it a sideways glance, a nod and a wink and ‘It’s okay’? We might not know. But the public should know. The government should ensure that if there is a suggestion that those matters are out there they can wipe them off by saying that they will ensure that the Cole commission has a clean, wide, open reference to make sure that we can then take those off the table. Otherwise we are left with all those unanswered questions.

We cannot make the accusation, though we can raise it: was it a deliberate action? We do not know. With all of the scenarios it is no exaggeration to say that this is one of the most appalling scandals I have seen in the history of this Commonwealth government. Yet we have an inquiry that is prevented from examining the most pressing and serious questions in respect of the whole matter. How did the Australian government betray the Australian people and the Defence Force and those people who are serving their country by letting money flow past their blockade into the treasury of one of the world’s most ruthless tyrants? One thing we do know is, whatever happens, the Howard government has continued to ensure that we will not be able to examine it completely, that there will continue to be a cover-up.

That has not changed one jot with this bill. It is a sensible bill, though, that makes a necessary, albeit modest, procedural change. But it does not go to the core mechanism: the restrictive terms of reference, as I have said. Even this little change has not been something the government has done willingly. It took the expense and delay of a Federal Court case to show them what action was needed. Of course, they do not have to take our advice. It would have been helpful if they had. They could have looked at the issue in more detail but they chose not to. Labor had raised the issue of legal professional privilege stymieing the commission’s operation in March. But, notwithstanding all that, we are pleased that the government are finally addressing the concerns that Labor raised months ago.

But as the tenor of my speech today highlights, we are disappointed with the delay. We are disappointed that the government had an opportunity with this bill to provide a better course of action by saying in their second reading speech that they had also examined the issue of the terms of reference and they agreed that they should be broadened. But they have not gone there. We do want the commission to complete its job as quickly as possible. We would have preferred to be debating a bill addressing the privileges issue weeks ago but we are pleased to support it today and facilitate its urgent passage through this parliament so that Commissioner Cole can continue his work with minimal further interruptions. But the government cannot be allowed to continue their ruse that the bill demonstrates their commitment to helping Commissioner Cole to find the truth. That is just simply baseless.