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Security of Critical Infrastructure Bill 2018

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2016-2017-2018

 

The Parliament of the

Commonwealth of Australia

 

THE SENATE

 

 

 

Security of Critical Infrastructure Bill 2017

 

 

(1)     Clause  5 , page 5 (after line 14) , after the definition of approved form , insert:

associate has the meaning given by section 8B.

[influence or control]

(2)     Clause  5 , page 5 (after line 17) , after the definition of commencing day , insert:

corporate entity means an entity other than an individual.

[influence or control]

(3)     Clause  5 , page 5 (lines 22 to 25) , omit the definition of critical water asset (not including the note), substitute:

critical water asset means one or more water or sewerage systems or networks that:

                     (a)  are managed by a single water utility; and

                     (b)  ultimately deliver services to at least 100,000 water connections or 100,000 sewerage connections.

[meaning of critical water asset]

(4)     Clause  5 , page 6 (after line 24) , after the definition of grace period , insert:

holding entity has the meaning given by subsection 8C(2).

influence or control has a meaning affected by section 8A.

interest in an asset means a legal or equitable interest in the asset.

[influence or control; meaning of interest]

(5)     Clause 5, page 6 (after line 28), after the definition of international relations , insert:

moneylending agreement has the meaning given by subsection 8(3).

[moneylenders]

(6)     Clause  5 , page 7 (lines 14 to 22) , omit the definition of protected information , substitute:

protected information means a document or information that:

                     (a)  is obtained by a person in the course of exercising powers, or performing duties or functions, under this Act; or

                     (b)  records or is the fact that an asset is declared under section 51 to be a critical infrastructure asset; or

                     (c)  was a document or information to which paragraph (a) or (b) applied and is obtained by a person by way of an authorised disclosure under Division 3 of Part 4 or in accordance with section 46.

[definition of protected information]

(7)     Clause  5 , page 8 (after line 34) , after the definition of security regulated port , insert:

senior officer of a corporate entity means:

                     (a)  for a body corporate—a director of the body corporate; or

                     (b)  for a unit trust:

                              (i)  the trustee of which is an individual—the trustee; and

                             (ii)  the trustee of which is a body corporate—a director of the trustee; and

                            (iii)  in any case—any other individual involved in the central management and control of the trust; or

                     (c)  an individual who is, or an individual in a group of individuals who are, in a position to determine the investments or policy of the entity or a trustee of the entity; or

                     (d)  an individual who makes, or participates in making, decisions that affect the whole, or a substantial part of, the business of the entity; or

                     (e)  an individual who has the capacity to affect significantly the financial standing of the entity.

subsidiary has the meaning given by subsection 8C(1).

[influence or control]

(8)     Clause  6 , page 9 (line 33) to page 10 (line 8) , omit all the words from and including “asset , including: ” to the end of paragraph (1)( f ), substitute “asset;”.

[influence or control]

(9)     Clause  6 , page 10 (lines 13 to 20) , omit paragraph ( 1 )( h ), substitute:

                     (h)  the name of each other entity that is in a position to directly or indirectly influence or control:

                              (i)  the first entity; or

                             (ii)  any entity covered by a previous application of this paragraph;

                   (ha)  in relation to each entity (the higher entity ) covered by paragraph (h):

                              (i)  the information in paragraphs (b) to (d), and (e) if appropriate, as if a reference in those paragraphs to the first entity were a reference to the higher entity; and

                             (ii)  information about the influence or control the higher entity is in a position to directly or indirectly exercise in relation to the first entity or any entity covered by paragraph (h);

[interest and control information]

(10)   Clause  6 , page 10 (after line 22) , at the end of subclause (1), add:

Note 1:       For example, if Holding Entity 1 holds a 10% interest in the first entity, and Holding Entity 2 holds a 10% interest in Holding Entity 1, the information mentioned in paragraphs (1)(h) and (ha) relating to those holding entities, would be given to the Secretary.

Note 2:       For the definition of influence or control , see section 8A.

Note 3:       For interests held by trusts, partnerships, superannuation funds and unincorporated foreign companies, see section 53A.

[interest and control information]

(11)   Clause  8 , page 12 (lines 1 to 3) , omit paragraph ( 1 )( a ), substitute:

                     (a)  together with any associates of the entity, holds an interest of at least 10% in the asset (including if any of the interests are held jointly with one or more other entities); or

[direct interest holders]

(12)   Clause 8, page 12 (line 4), omit “a lease of, or an interest in,”, substitute “an interest in”.

[leases]

(13)   Clause  8 , page 12 (after line 6) , at the end of subclause (1), add:

Note:          For interests held by trusts, partnerships, superannuation funds and unincorporated foreign companies, see section 53A.

[direct interest holders]

(14)   Clause  8 , page 12 (lines 7 to 17) , omit subclause ( 2 ), substitute:

Exemption for moneylenders

             (2)  Subsection (1) does not apply to an interest in an asset held by an entity if:

                     (a)  the entity holds the interest in the asset:

                              (i)  solely by way of security for the purposes of a moneylending agreement; or

                             (ii)  solely as a result of enforcing a security for the purposes of a moneylending agreement; and

                     (b)  the holding of the interest does not put the entity in a position to directly or indirectly influence or control the asset; and

                     (c)  if the entity is holding the interest solely by way of security—enforcing the security would not put the entity in a position to directly or indirectly influence or control the asset.

             (3)  A moneylending agreement is:

                     (a)  an agreement entered into in good faith, on ordinary commercial terms and in the ordinary course of carrying on a business (a moneylending business ) of lending money or otherwise providing financial accommodation, except an agreement dealing with any matter unrelated to the carrying on of that business; or

                     (b)  if the entity:

                              (i)  is carrying on a moneylending business; or

                             (ii)  is a subsidiary or holding entity of a corporate entity that is carrying on a moneylending business;

                            an agreement to acquire an interest arising from a moneylending agreement (within the meaning of paragraph (a)).

[moneylenders]

(15)   Page 12 (after line 17) , after clause  8 , insert:

8A   Meaning of influence or control

             (1)  An entity is in a position to directly or indirectly influence or control an asset if:

                     (a)  the entity is in a position to exercise voting or veto rights in relation to the body that governs the asset; or

                     (b)  the entity is in a position to make decisions that materially impact on the running of, or strategic direction in relation to, the asset; or

                     (c)  the entity has the ability to appoint:

                              (i)  persons to the body that governs the asset; or

                             (ii)  key personnel involved in running the asset; or

                     (d)  the entity is in a position to influence or determine decisions relating to:

                              (i)  the business plan, or any other management plan, for the asset; or

                             (ii)  major expenditure relating to the asset; or

                            (iii)  major contracts or transactions involving the asset; or

                            (iv)  major loans involving the asset.

Note:          For interests held by trusts, partnerships, superannuation funds and unincorporated foreign companies, see section 53A.

             (2)  An entity (the controlling entity ) is in a position to directly or indirectly influence or control another entity (the controlled entity ) if the controlling entity:

                     (a)  is in a position to exercise voting or veto rights in relation to the controlled entity; or

                     (b)  is in a position to make decisions that materially impact on the running of, or strategic direction of, the controlled entity; or

                     (c)  has the ability to appoint persons to the board of the controlled entity; or

                     (d)  is in a position to influence or determine decisions relating to:

                              (i)  the business plan, or any other management plan, for the controlled entity; or

                             (ii)  major expenditure relating to the controlled entity; or

                            (iii)  major contracts or transactions involving the controlled entity; or

                            (iv)  major loans involving the controlled entity; or

                     (e)  together with any associates of the controlling entity, holds an interest of at least 10% in the controlled entity (including if any of the interests are held jointly with one or more other entities).

             (3)  This section does not limit when an entity is in a position to directly or indirectly influence or control an asset or other entity.

  8B   Meaning of associate

                   Each of the following persons is an associate of a person:

                     (a)  any relative of the person;

                     (b)  any person with whom the person is acting, or proposes to act, in concert in relation to an asset;

                     (c)  any person with whom the person carries on a business in partnership;

                     (d)  any corporate entity of which the person is a senior officer;

                     (e)  if the person is a corporate entity:

                              (i)  any holding entity of the corporate entity; or

                             (ii)  any senior officer of the corporate entity;

                      (f)  any corporate entity whose senior officers are accustomed or under an obligation (whether formal or informal) to act in accordance with the directions, instructions or wishes of:

                              (i)  the person; or

                             (ii)  if the person is a corporate entity—the senior officers of the person;

                     (g)  a corporate entity if the person is accustomed or under an obligation (whether formal or informal) to act in accordance with the directions, instructions or wishes of:

                              (i)  the corporate entity; or

                             (ii)  the senior officers of the corporate entity;

                     (h)  any body corporate in which the person holds an interest;

                      (i)  if the person is a body corporate—a person who holds an interest in the body corporate;

                      (j)  the trustee of a trust in which the person holds an interest;

                     (k)  if the person is the trustee of a trust—a person who holds an interest in the trust;

                      (l)  any other person or body prescribed by the rules.

8C   Meanings of subsidiary and holding entity

Meaning of subsidiary

             (1)  A corporate entity (the lower entity ) is a subsidiary of another corporate entity (the higher entity ) if:

                     (a)  the higher entity:

                              (i)  is in a position to control more than half the voting power in the lower entity; or

                             (ii)  holds more than half the issued securities in the lower entity (disregarding any securities that carry no right to participate beyond a specified amount in a distribution of either profits or capital); or

                     (b)  the lower entity is a subsidiary of a corporate entity that is the higher entity’s subsidiary (including because of one or more applications of this subsection).

Meaning of holding entity

             (2)  A corporate entity (the higher entity ) is a holding entity of another corporate entity (the lower entity ) if the lower entity is a subsidiary of the higher entity.

[influence or control]

(16)   Clause  12 , page 15 (line 18) , after “ quantity of ”, insert “ at least ”.

[meaning of critical gas asset]

(17)   Clause 53, page 44 (lines 5 to 7), omit “, but the obligations that would be imposed on them are instead imposed on the partners, trustees or appointed officers”, substitute “, but with some modifications”.

[treatment of certain entities]

(18)   Page 45 (before line 2) , before clause  54 , insert:

53A   How certain entities hold interests

                   For the purposes of this Act, a trust, partnership, superannuation fund or unincorporated foreign company (as the case requires) is taken to hold an interest in an asset or entity if:

                     (a)  one or more trustees hold the interest on behalf of the beneficiaries of the trust; or

                     (b)  one or more partners hold the interest on behalf of the partnership; or

                     (c)  one or more trustees hold the interest on behalf of the beneficiaries of the superannuation fund; or

                     (d)  one or more appointed officers hold the interest on behalf of the company.

Note:          For the definition of appointed officer , see section 5.

[treatment of certain entities]

(19)   Heading to Division 4, page 49 (line 1), after“ Periodic reports ”, insert “ , reviews ”.

[review of Act]

(20)   Page 49 (after line 25) , after clause  60 , insert:

60A   Review of this Act

             (1)  The Parliamentary Joint Committee on Intelligence and Security must:

                     (a)  review the operation, effectiveness and implications of this Act; and

                     (b)  without limiting paragraph (a), consider whether it would be appropriate to have a unified scheme that covers all infrastructure assets (including telecommunication assets) that are critical to:

                              (i)  the social or economic stability of Australia or its people; or

                             (ii)  the defence of Australia; or

                            (iii)  national security; and

                     (c)  review the circumstances in which any declarations have been made under Part 6 of this Act (declarations of assets by the Minister); and

                     (d)  report the Committee’s comments and recommendations to each House of the Parliament.

             (2)  The Committee must begin the review before the end of 3 years after this Act receives the Royal Assent.

[review of Act]