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Part 3—Directions by the Minister

Part 3 Directions by the Minister

Division 1 Simplified outline of this Part

31   Simplified outline of this Part

The Minister may require a reporting entity for, or an operator of, a critical infrastructure asset to do, or refrain from doing, an act or thing, if the Minister is satisfied that there is a risk of an act or omission that would be prejudicial to security.

The Minister may give the direction only if particular criteria are met and certain consultation has been undertaken.

Division 2 Directions by the Minister

32   Direction if risk of act or omission that would be prejudicial to security

             (1)  This section applies if in connection with the operation of, or the delivery of a service by, a critical infrastructure asset the Minister is satisfied that there is a risk of an act or omission that would be prejudicial to security.

Direction to do, or refrain from doing, an act or thing

             (2)  The Minister may, subject to subsections (3) and (4), give an entity that is a reporting entity for, or an operator of, a critical infrastructure asset a written direction requiring the entity to do, or refrain from doing, a specified act or thing within the period specified in the direction.

             (3)  The Minister must not give the direction unless:

                     (a)  the Minister is satisfied that requiring the entity to do, or to refrain from doing, the specified act or thing is reasonably necessary for purposes relating to eliminating or reducing the risk mentioned in subsection (1); and

                     (b)  the Minister is satisfied that reasonable steps have been taken to negotiate in good faith with the entity to achieve an outcome of eliminating or reducing the risk without a direction being given under subsection (2); and

                     (c)  an adverse security assessment in respect of the entity has been given to the Minister for the purposes of this section; and

                     (d)  the Minister is satisfied that no existing regulatory system of the Commonwealth, a State or a Territory could instead be used to eliminate or reduce the risk mentioned in subsection (1).

Note:          The Minister must also undertake consultation before giving a direction (see section 33).

Matters etc. to which regard must be had

             (4)  Before giving the entity the direction, the Minister must have regard to the following:

                     (a)  the adverse security assessment mentioned in paragraph (3)(c);

                     (b)  the costs that would be likely to be incurred by the entity in complying with the direction;

                     (c)  the potential consequences that the direction may have on competition in the relevant industry for the critical infrastructure asset;

                     (d)  the potential consequences that the direction may have on customers of, or services provided by, the entity;

                     (e)  any representations given by the entity or a consulted Minister under subsection 33(2) within the period specified for that purpose.

             (5)  The Minister:

                     (a)  must give the greatest weight to the matter mentioned in paragraph (4)(a); and

                     (b)  may also have regard to any other matter the Minister considers relevant.

33   Consultation before giving direction

Consultation with relevant State or Territory Ministers

             (1)  Before giving an entity a direction under subsection 32(2), the Minister (the Commonwealth Minister ) must:

                     (a)  consult the following persons (the consulted Minister ):

                              (i)  the First Minister of the State, the Australian Capital Territory or the Northern Territory in which the critical infrastructure asset is located;

                             (ii)  each Minister of the State, the Australian Capital Territory, or the Northern Territory, who has responsibility for the regulation or oversight of the relevant industry for the critical infrastructure asset in that State or Territory; and

                     (b)  after reasonable steps have been taken to negotiate in good faith with the entity as described in paragraph 32(3)(b), give the entity and each consulted Minister written notice of the proposed direction.

             (2)  The notice must invite the entity and each consulted Minister to make written representations to the Commonwealth Minister in relation to the proposed direction within the period specified in the notice, which must be:

                     (a)  at least 28 days after the notice is given; or

                     (b)  a shorter period if the Commonwealth Minister considers the shorter period is necessary because of urgent circumstances.

             (3)  Subsection (1) does not limit the persons with whom the Commonwealth Minister may consult.

34   Requirement to comply with direction

                   An entity must comply with a direction given to the entity under subsection 32(2).

Note:          If the entity is not a legal person, see Division 2 of Part 7.

Civil penalty:          250 penalty units.

35   Exception—acquisition of property

                   Section 34 does not apply to the extent (if any) that its operation would result in an acquisition of property from a person otherwise than on just terms.

Note:          An entity that wishes to rely on this section in proceedings for a civil penalty order bears an evidential burden in relation to the matter in this section (see section 96 of the Regulatory Powers Act).