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Foreign Influence Transparency Scheme (Charges Imposition) Bill 2017

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2016 - 2017

 

 

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

 

 

HOUSE OF REPRESENTATIVES

 

 

FOREIGN INFLUENCE TRANSPARENCY SCHEME (CHARGES IMPOSITION) BILL 2017

 

 

EXPLANATORY MEMORANDUM

 

 

 

(Circulated by authority of the

Attorney-General, Senator the Hon George Brandis QC)

           



FOREIGN INFLUENCE TRANSPARENCY SCHEME (CHARGES IMPOSITION) BILL 2017

General Outline

1.                    The Foreign Influence Transparency Scheme (Charges Imposition) Bill 2017 provides legislative authority for the Government to impose a charge for applications for registration or renewal of registration under the Foreign Influence Transparency Scheme Act 2017 .

2.                    The Foreign Influence Transparency Scheme Bill 2017 establishes a scheme requiring registration by persons who undertake certain activities within Australia on behalf of foreign principals.  It is intended to provide transparency for the Australian Government and the Australian public about the forms and sources of foreign influence in Australia.

3.                    The scheme will provide transparency of the nature and extent of influence activities undertaken by persons acting on behalf of foreign actors in Australian political and governmental processes.  The scheme is intended to provide oversight of the many and varied ways in which foreign actors seeks to exercise influence for the purpose of affecting political and governmental systems and processes, including the views of the Australian public on such matters. This will provide decision-makers and the Australian public with the information to accurately assess the interests being brought to bear in such processes.

4.                    The scheme will:

·          require persons undertaking certain activities on behalf of a foreign principal to register

·          contain appropriate exemptions for certain activities or classes of persons

·          require registrants to disclose information about the nature of their relationship with the foreign principal and activities undertaken pursuant to that relationship (both at the initial point of registration and on an ongoing basis for the duration of that relationship)

·          place additional disclosure requirements on registrants during elections and other voting periods

·          allow some information to be made publicly available, to serve the transparency purposes of the scheme

·          be accompanied by charges for certain activities (for cost recovery purposes)

·          be supported by powers which will be vested in the Secretary, including issuing notices to produce information or documents and collecting fees, and  

·          be supported by criminal offences for non-compliance.

5.                    The scheme is not intended to restrict, deter, criminalise or punish otherwise lawful activities or associations.

6.                    To offset the cost of establishing, administering and maintaining the scheme, the Australian Government has agreed that it will be partially cost recovered. In this instance, partial cost recovery will be achieved by way of levies, meaning that registrants will be charged when certain activities are undertaken.  

FINANCIAL IMPACT

7.                    The implementation of charges for the scheme will partially recover the costs of the Australian Government to establish, administer and maintain the scheme.  It is not intended to generate revenue.

8.                    A Cost Recovery Impact Statement will be made available online before any charging activity is undertaken by the scheme.



 

STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

Foreign Influence Transparency Scheme (Charges Imposition) Bill 2017

9.                    This Bill is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

10.                This Bill provides legislative authority for charges to be imposed for applications for registration and renewal of registration under the Foreign Influence Transparency Scheme Act 2017

Overview of the Bill

11.                The object of the Foreign Influence Transparency Scheme (Charges Imposition) Bill 2017 (the Bill) is to provide legislative authority for charges to be imposed for applications for registration and renewal of registration under the Foreign Influence Transparency Scheme Act 2017.

12.                The amount that will be charged will be set out in regulations made for the purposes of the Bill, in accordance with the Australian Government Charging Framework. 

Human Rights implications

13.                This Bill engages the following rights and freedoms:

·          the right to opinion and freedom of expression in Article 19 of the ICCPR, and

·          the right to work in Article 6 of the ICESCR.  

Human rights limited by the Bill
Legitimate objective of the Bill 

14.                Under international human rights law, any limitation on rights and freedoms must be reasonable, necessary and proportionate for the pursuit of a legitimate objective. For an objective to be legitimate, it must address a pressing or substantial concern, and not simply seek an outcome regarded as desirable or convenient.

15.                The objective of the Bill is to enable the Government to levy a charge on a person who makes an application for registration or renews registration under the Foreign Influence Transparency Scheme Act. 

16.                The object of the scheme is to enhance government and public knowledge of the level and extent to which foreign sources may, through intermediaries acting on their behalf, influence the conduct of Australia’s elections, government and Parliamentary decision-making, and the creation and implementation of laws and policies.

17.                Foreign influence can have serious implications for political sovereignty and national policy as it may result in the prioritisation of foreign interests over domestic interests. For example, where a foreign principal engages an intermediary to represent their interests within Australia, the relationship between the intermediary and the foreign principal, and thereby the foreign interest, can remain hidden. This undermines the ability of decision-makers in government, as well as the public, to fully understand and evaluate the actions of that intermediary, and to make informed decisions.

18.                During elections, referendums and plebiscites in particular, foreign influence can undermine the legitimacy or perceived legitimacy of government and its processes, enable the perception of corruption, and obfuscate information that might impact the voting decisions of the public. Consequently, it is important that activities that could impact Australia’s political and governmental systems and processes, which are undertaken on behalf of foreign principals, are distinguished from activities undertaken by domestic principals to influence such processes. 

19.                There is currently no formal mechanism requiring instances of foreign influence to be made known to government and the public. While some forms of foreign influence are captured through lobbying registers, these registers primarily target very narrow conduct, being lobbying of government representatives and politicians. Furthermore, these registers are not supported by binding legislative or regulatory frameworks and enforcement mechanisms. Similarly, Ministerial codes of conduct that variously regulate the post- employment activities of Ministers, are not supported by binding legislative or regulatory frameworks. This can impede the ability of these schemes to illuminate activities undertaken by former Ministers on behalf of a foreign actor.

20.                The scheme will achieve its transparency objective by publicly identifying the forms and sources of foreign influence exerted in political and governmental processes in Australia. It will do this by way of a publicly available register containing information about the nature of a person or entity’s relationship with a foreign principal and the activities undertaken pursuant to that relationship.

21.                To ensure the scheme captures contemporaneous information on foreign influence activities, registrants will be required to update the register annually, in response to a change in material circumstances and during the voting period for a federal election, referendum or other designated vote.

22.                The scheme will also require disclosure statements to be included as information or materials disseminated, distributed or otherwise communicated on behalf of a foreign principal. As a further layer of transparency, the scheme will require an annual report to be tabled in Parliament detailing information on the operation of the scheme, including the total number of registrants, the total number of foreign principals and their country of origin and the nature of activities engaged in on behalf of foreign principals.

Right to opinion and freedom of expression

23.                Article 19(2) of the ICCPR states that everyone shall have the right to freedom of expression; this right shall include freedom to seek, receive and impart information and ideas of all kinds, regardless of frontiers, either orally, in writing or in print, in the form of art, or through any other media of his choice. The right to freedom of expression includes the right not to impart information. Any limitation on the freedom of expression must be reasonable, necessary and proportionate for the pursuit of a legitimate objective and for the respect of the rights or reputations of others or for the protection of national security, public order, or public health or morals.

24.                The Bill engages the right to freedom of expression as it will require a person who applies for registration or renews registration under the Foreign Influence Transparency Scheme Act to pay a charge.  A person who is unable or unwilling to pay a charge under the scheme may be dissuaded from imparting information and ideas, or engaging in further registrable activities, on behalf of a foreign principal, particularly in light of the penalties which attach to failing to register under the scheme. In this sense, the Bill could be seen to limit to right to freedom of expression.   

25.                The obligation to register is intended to support the transparency objectives of the scheme. This information is intended to enable the Australian Government and public to understand and properly judge the activities of persons who act on behalf of foreign principals. In General Comment No. 34 (CCPR/C/GC/34), the Human Rights Committee emphasised the importance of the principles of transparency and accountability for the protection and promotion of human rights. By ensuring transparency of the sources and interests behind certain activities, the Bill will promote the rights of individuals to hold opinions as protected by Article 19(1).

26.                The obligation to register will promote a number of other human rights, including the ability to hold opinions and take part in public affairs. It does this be ensuring access to current and accurate information about activities being undertaken to influence political and governmental systems and processes. In this regard, any limitations on the freedom of expression, to the extent that they promote these and other human rights, are reasonable.

27.                The Bill will provide legislative authority for the imposition of charges to allow cost-recovery of part of the costs associated with establishing, administering and maintaining the scheme.  There is nothing to prevent the person required to register under the scheme passing the cost of registration or renewal of registration on to the foreign principal on whose behalf the person is acting.  Such foreign principals, including foreign governments and foreign businesses, will often have significant resources and the ability to meet these costs.

28.                Accordingly, while the Bill may limit the right to freedom of expression, the limitation is reasonable because it is appropriate for the Commonwealth to partially cost-recover the costs of establishing and administering the scheme, and the possible limitation is proportionate to the overall transparency benefits of the scheme.

Rights to work and rights in work

29.                Article 6 of the ICECSR recognises a person’s right to work, which includes the right of everyone to the opportunity to gain his or her living by work which he or she freely chooses or accepts.

30.                The Bill limits the right to work, in that it will impose charges under the Foreign Influence Transparency Scheme Act and in doing so, places additional limits on registration by requiring the payment of a registration charge and an annual registration renewal charge.  These charges may have a financial or regulatory impact on a registrant and a person who is employed to undertake registrable activities may be limited in doing so.  For example, a person who is undertaking activities on behalf of a foreign principal may not be able to pay the charge associated with registration - should the person choose to no longer undertake activities on behalf of the foreign principal, this could be considered to be denying the individual an opportunity to gain his or her living by work which he or she freely chooses or accepts.

31.                The Bill will provide legislative authority for the imposition of charges to allow cost-recovery of part of the costs associated with establishing, administering and maintaining the scheme.  There is nothing to prevent the person required to register under the scheme passing the cost of registration or renewal of registration on to the foreign principal on whose behalf  the person is acting.  Such foreign principals, including foreign governments and foreign businesses, will often have significant resources and the ability to meet these costs.

32.                Accordingly, while the Bill may limit the right to freedom of expression, the limitation is reasonable because it is appropriate for the Commonwealth to partially cost-recover the costs of establishing and administering the scheme, and the possible limitation is proportionate to the overall transparency benefits of the scheme.

Conclusion

33.                The Bill is compatible with human rights.  To the extent that the Bill limits human rights, those limitations are reasonable, necessary and proportionate to the legitimate objective of the Bill, that it to assist to meet the costs of the Foreign Influence Transparency Scheme, which is intended to enhance government and public knowledge of the level and extent to which foreign sources may influence Australian governmental and political processes. 



NOTES ON CLAUSES

Part 1-Preliminary

Section 1-Short title

34.                Section 1 provides that when the Bill is enacted, it is to be cited as the Foreign Influence Transparency Scheme (Charges Imposition) Act 2017 (the Act).

Section 2-Commencement

35.                Section 2 provides for the commencement of this Bill, as set out in the table.

36.                The table provides that the whole of the Act will commence at the same time Foreign Influence Transparency Scheme Act 2017 commences, to enable the scheme to commence charging immediately. 

37.                The Foreign Influence Transparency Scheme Act will commence on a single day to be fixed by Proclamation.  However, if the provisions in that Act do not commence within the period of 12 months beginning on the day the Act received Royal Assent, the provisions will commence on the day after the end of that period. 

Section 3-Extension to external Territories

38.                Section 3 provides that the Act extends to every external Territory.

Section 4- Extraterritoriality

39.                Section 4 provides that the Act has extraterritorial operation and applies both within and outside Australia.  The effect of this provision is that the Act will apply to persons, or matters occurring, outside Australia and the external Territories.

40.                The geographic reach of the Act mirrors that of the Foreign Influence Transparency Scheme Act.  This is necessary, as it ensures that the charges imposed by this Act can be extended to apply to registrable activities under the scheme.   

41.                Extending the geographic reach of this Act is necessary so that charges may be imposed in situations where a person makes an arrangement with a foreign principal outside of Australia, and the arrangement is for the person to undertake registrable activities within Australia pursuant to that arrangement. 

42.                It is also necessary to be able to impose charges on former Cabinet Ministers, former members of Parliament and former senior public officials under sections 22 and 23 of the Foreign Influence Transparency Scheme Act.  For these categories of registrant, it does not matter where they undertake activities - they are required to register even if none of their activities are undertaken in Australia. 

Section 5 - Imposition of charges  

43.                Section 5 provides legislative authority to impose charges in accordance with subsection 63(1) of the Foreign Influence Transparency Scheme Act.

44.                Subsection 63(1) of the Foreign Influence Transparency Scheme Act provides that a person is liable to pay a charge when they apply for registration under the scheme, or when they renew their registration.

Section 6 - Amount of charges

45.                Section 6 provides that the amount of charges payable in relation to the scheme is to be prescribed in regulations, and sets out matters that regulations for the purposes of this Act may address.  Charges levied under this section will allow the scheme to be partially cost recovered.

46.                Subsection 6(1) provides that the amount of the charge that is payable by a person is the amount that is prescribed by the regulations.  Section 7 of the Act allows the Governor-General to make regulations for the purposes of the Act.   

47.                Subsection 6(2) provides that the regulations may do any or all of the following in relation to determining the amount that will be charged for each relevant activity:

·          prescribe an amount or a method for working out an amount

·          prescribe different amounts or methods for different circumstances

·          prescribe a nil amount for prescribed circumstances.

48.                Allowing these matters to be prescribed in regulations allows for flexibility and reflects the cost recovery policy and process adopted by the Australian Government.

49.                The Australian Government Charging Framework provides that where the Australian Government has made a decision to charge for a regulatory activity on a full or partial cost recovery basis, then these activities are subject to the Australian Cost Recovery Guidelines (the Guidelines). 

50.                Under the Guidelines, each cost recovered activity must ensure that there is an alignment between the expense incurred and the income generated through charges for it.  Ideally, this should be done on a yearly basis.  Enabling charges to be dealt with in regulations provides sufficient flexibility to be able to align the amount and methodology with the Guidelines, and will reduce the need to amend the primary legislation in the future.

51.                Paragraph 6(2)(a) provides that the regulations may prescribe an amount or method for working out an amount.  This provision allows the scheme to determine the amount charged for each relevant activity, and also a methodology for working out that amount.   

52.                Paragraph 6(2)(b) provides that the regulations may prescribe different amounts or methods for different circumstances.  This provision allows for flexibility in determining the charges that will be levied for the relevant activities and allows the scheme to charge different amounts for different circumstances, where this is in accordance with the Guidelines.

53.                Paragraph 6(2)(c) provides that the regulations may prescribe a nil amount in certain circumstances.  While the scheme will be offset by partial cost recovery, this provision allows for flexibility in a situation where there are special circumstances, or where it is otherwise appropriate, not to charge under the scheme for a certain activity.

54.                Subsection 6(3) provides that the amount of a charge does not have to bear any relationship to the cost of any services that are provided in relation to a matter in connection with the charge that is payable. This provision allows for a situation where the amount that a registrant is charged for relevant activities does not reflect the actual costs of the services provided to the registrant in relation to the person’s registration.  This means that the amount charged does not need to exactly align to the costs incurred by the Department to process the application, taking into account such matters as salary costs, general overheads and office supplies.  This provision reflects the nature of the Government’s cost recovery process, and how it will operate in relation to the Scheme. 

Section 7 - Regulations

55.                Section 7 provides that the Governor-General may make regulations prescribing matters which are:

·          required or permitted by this Act to be prescribed by the regulations, or

·          necessary or convenient to be prescribed for carrying out or giving effect to the Act.

56.                This is a limited rule making power, and ensures that there is requisite authority to make regulations as necessary for the effective operation of the Act. 

57.                Section 6 of the Act allows for amount of charge payable to be prescribed in regulations made under this Act.  There may be other matters related to this Act which are appropriate to prescribe in regulations.  Paragraph 7(b) ensures that where this is the case, it this will be limited only to those matters that are necessary or convenient for carrying out or giving effect to this Act.

58.                Any regulations made under this section will be legislative instruments for the purposes of the Legislation Act 2003 .