ParlInfo - Foreign Affairs, Defence and Trade Legislation Committee - Senate Standing - Defence Legislation Amendment (Security of Defence Premises) Bill 2010 [Provisions]

Foreign Affairs, Defence and Trade Legislation Committee - Senate Standing - Defence Legislation Amendment (Security of Defence Premises) Bill 2010 [Provisions] - Report, dated March 2011

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Australian Senate

Senate Legislation Committees

Reports on the Consideration of Bills January - June 2011

Volume 4

Australian Senate

Senate Legislation Committees

Reports on the consideration of bills January-June 2011

Volume 4

Foreign Affairs, Defence and Trade Committee

Legal and Constitutional Affairs Committee

Â© Parliament of the Commonwealth of Australia 2011

ISSN 1834-4062

This document was printed by the Printing Unit, Department of the Senate, Parliament House, Canberra.

TABLE OF CONTENTS

Foreign Affairs, Defence and Trade Committee " Autonomous Sanctions Bill 2010*, dated March 2011 ..........................................1

" Criminal Code Amendment (Cluster Munitions Prohibition) Bill 2010*, dated March 2011.....................................................................................51

" Defence Legislation Amendment (Security of Defence Premises) Bill 2010*, dated March 2011 ............. ..............................................129

Legal and Constitutional Affairs Committeet " Australian Capital Territory (Self-Government) Amendment (Disallowance and Amendment Power of the Commonwealth) Bill 2010, together with the amendments on sheet no. 7031,

circulated by the Australian Greens, dated May 2011.......................................193

" Australian Transaction Reports and Analysis Centre Supervisory Cost Recovery Levy Bill 2011*, Australian Transaction Reports and Analysis Centre Supervisory Cost Recovery Levy (Collection) Bill 2011* and Australian Transaction Reports and Analysis Centre Supervisory Cost

Recovery Levy (Consequential Amendments) Bill 2011*, dated June 2011.............................................................................................................255

" Child Support (Registration and Collection) Amendment Bill 2011*, dated May 2011 .......................................................................................293

" Civil Dispute Resolution Bill 2010*, dated December 2010...............................295

" Combating the Financing of People Smuggling and other Measures Bill 2011*, dated March 2011............................................................. 341

" Commonwealth Commissioner for Children and Young People Bill 2010, dated May 2011...................................................................................373

t Volume 5 contains further reports of the Legal and Constitutional Affairs Committee

* Provisions of bill referred to committee.

The Senate

Foreign Affairs, Defence and Trade Legislation Committee

Autonomous Sanctions Bill 2010 [Provisions]

March 2011

Â© Commonwealth of Australia 2011

ISBN 978-1-74229-368-4

Printed by the Senate Printing Unit, Parliament House, Canberra.

Members of the committee Core members

Senator Mark Bishop, ALP, WA (Char) Senator Russell Trood, LP, QLD (Deputy Chair) Senator Michael Forshaw, ALP, NSW Senator Steve Hutchins, ALP, NSW Senator Helen Kroger, LP, VIC Senator Scott Ludlam, AG, WA

Secretariat

Dr Kathleen Dermody, Committee Secretary Ms Christina Raymond, Senior Research Officer Ms Eija Vanhalakka-Stephenson, Senior Research Officer (until November 2010) Ms Angela Lancsar, Administrative Officer

Senate Foreign Affairs, Defence and Trade Committee Department of the Senate PO Box 6100 Parliament House Canberra ACT 2600 Australia

Phone: +61 2 6277 3535 Fax: +61 2 6277 5818

Email: fadt.sen@aph.gov.au Internet: www.aph.gov.au/Senate/committee/fadt_ctte/index.htm

Table of contents

Members of the committee..............................

List of recommendations.................................

Chapter 1

Introduction.....................................................

Background....................................................

Purpose of the bill..........................................

Conduct of the inquiry...................................

Acknowledgements.......................................

Chapter 2

Background ......................................................

UN sanctions.................................................

Administration in Australia of UN sanctions

Autonomous sanctions...................................

Australian autonomous sanctions .................

The need for new legislation ........................

Committee view.............................................

Chapter 3

Provisions of the bill........................................

Overview of the bill.......................................

Key issues......................................................

Procedural safeguards....................................

Drafting matters.............................................

The Explanatory Memorandum....................

Domestic privacy implications of Part 4 ......

Conclusion.....................................................

Appendix 1

..1

..2

.,2

..3

..4

..5

..6

..7

.,8

Public submissions 41

List of recommendations

Recommendation 1

3.33 The committee recommends that the government consider developing best practice guidelines for the policy formulation, drafting, implementation, enforcement, monitoring and administration of autonomous sanctions. These guidelines could be

informed by relevant international resources, research and public consultation.

Recommendation 2

3.41 The committee recommends that the government amend the Explanatory Memorandum to include guidance about the types of 'other writing' that may be incorporated by reference in regulations made under subclause 10(3).

Recommendation 3

3.56 The committee recommends that the government should amend the Explanatory Memorandum to set out the reasons for including subclause 14(5).

Recommendation 4

3.63 The committee recommends that the government consider:

" extending Part 2, Division 2 to the enforcement of sanction laws as defined in Clause 4; or

" if there is no legislative intention to do so, including in the Explanatory Memorandum an explanation of how Part 2, Division 2 is consistent with the purpose of the bill expressed in subclause 3(b).

Recommendation 5

3.73 The committee recommends that the government amend the Explanatory Memorandum to include a statement of reasons for the imposition in subclause 16(8) of strict liability in respect of the offences contained in subclauses 16(5) and 16(6).

Recommendation 6

3.88 The committee recommends that, for the avoidance of doubt, the government consider including in subclause 16(2) an element that an individual must hold an authorisation.

Recommendation 7

3.104 The committee recommends that the government consider including in the bill or the Explanatory Memorandum an express statement of the fault elements applicable to each of the physical elements of the offences set out in Clause 17.

Recommendation 8

3.108 The committee recommends that the government consider including in the bill:

" an inclusive definition of the 'administration' of an autonomous sanctions regime for the purposes of Clause 17; and

" a definition of an SES employee, by reference to the Public Service Act 1999, for the purpose of Clause 27.

Recommendation 9

3.117 The committee recommends that the government amend the Explanatory Memorandum to the bill to set out the reasons for:

" derogating from the privilege against self incrimination in Clause 22; and

" the non-inclusion of derivative use immunity in subclause 22(2).

Recommendation 10

3.118 The committee recommends that the government consider extending the use immunity recognised in subclause 22(2) to documents provided pursuant to a notice issued under Clause 19.

Recommendation 11

3.127 The committee recommends that the government amend the Explanatory Memorandum to the bill to explain the reasons for the immunity contained in Clause 25.

Recommendation 12

3.134 The committee recommends that the government amend the Explanatory Memorandum to the bill to set out the reasons for including the following clauses:

" subclause 10(3);

" Clause 12;

" Clause 13;

" subclause 14(5);

" Clause 16;

" Clause 22; and

" subclause 24(2).

Recommendation 13

3.146 The committee recommends that, subject to consideration of

recommendations 1-12 of this report, the Senate pass the bill.

viii 8

Chapter 1

Introduction

Background

1.1 On 26 May 2010, the Autonomous Sanctions Bill 2010 (the bill) was

introduced into the House of Representatives. By resolution of the Senate, the provisions of the bill were referred to the Foreign Affairs, Defence and Trade Legislation Committee on 26 May for inquiry and report by 15 June. On 15 June, the Senate granted an extension of the time to report to 26 August 2010.

1.2 On 19 July 2010, the Governor-General prorogued the 42nd Parliament and dissolved the House of Representatives. After due consideration, the committee reported to the Senate that it had resolved not to continue its inquiry into the provisions of the bill. On 30 September, the bill was reintroduced in the House of

Representatives and on the same day the Senate referred the provisions of the bill to the committee for inquiry and report by 18 November 2010. The Senate granted an extension until the end of the first sitting period in February 2011 (3 March 2011).

1.3 The Senate Standing Committee for the Scrutiny of Bills considered the bill and raised a number of concerns,1 which are discussed in chapter 3. When recommending the proposed legislation for inquiry and report, the Selection of Bills Committee identified the domestic privacy implications of the bill as an issue for consideration.2 This matter is also discussed in chapter 3.

Purpose of the bill

1.4 The purpose of the bill is to establish a framework for the implementation, enforcement and administration of autonomous sanctions. Autonomous sanctions are 'punitive measures, not involving the use of force, which a government imposes as a matter of foreign policy *as opposed to an international obligation under a UN Security Council decision1.3 The latter measures are referred to as 'UN sanctions'.

1.5 According to the Explanatory Memorandum (EM), autonomous sanctions are intended to:

" limit the adverse consequences of a situation of international concern (for example, by denying access to military or paramilitary goods, or to goods, technologies or funding enabling programs of proliferation concern);

1 Senate Standing Committee for the Scrutiny of Bills, Tenth Report of2010, 24 November 2010, pp. 388-400.

2 Senate Selection of Bills Committee, Report No 11 of2010, 30 September 2010, paragraph 2(c) and Appendix 3.

3 Explanatory Memorandum, p. 1.

" influence those responsible for giving rise to the situation of international concern to modify their behaviour to remove the concern (by motivating them to adopt different policies); and

" penalise those responsible (for example, by denying access to international travel or to the international financial system).4 5

1.6 Autonomous sanctions may be applied to specific governments, individuals or entities, or specific goods and services that are responsible for, or involved with, a situation of international concern. According to the EM, these measures may be supplementary to, or independent of, UN Security Council sanctions. Autonomous sanctions are 'likely to play an increasing part in responses of like-minded countries to situations of concern'.

1.7 The proposed legislation aims to expand the range of autonomous sanctions that Australia can implement to ensure that such measures match the scope and extent of those implemented by like-minded countries. The bill is also intended to create a flexible administrative framework to enable timely responses to situations of international concern.6

1.8 The bill is modelled on the Charter of the United Nations Act 1945 (Cth) (UN Charter Act), which establishes a framework for the implementation, enforcement and administration of UN sanctions. This is intended to harmonise the administration of autonomous and UN sanctions and simplify compliance.7

Conduct of the inquiry

1.9 The committee advertised the inquiry on its website and in the Australian on 5, 9, 16 and 30 June, 14 July, 11 August and 13 October 2010. It wrote to relevant ministers and departments calling for written submissions and also contacted a number of other organisations, commentators and academics inviting them to make

submissions to the inquiry. The committee received six submissions which are listed at Appendix 1. The committee agreed that, based on these submissions, a public hearing was not required.

Acknowledgements

1.10 The committee thanks all those who assisted with the inquiry.

4 Explanatory Memorandum, p. 1.

5 Explanatory Memorandum, p. 1.

6 Explanatory Memorandum, p. 2.

7 Explanatory Memorandum, p. 2.

Chapter 2

Background

2.1 Sanctions are a foreign policy tool designed to persuade recalcitrant leaders to change their behaviour *for example, to improve recognition of human rights, to adopt or restore democratic institutions, and to promote respect for the rule of law.1 Sanctions are punitive measures, not involving the use of armed force.2 As noted in

chapter 1, sanctions fall into two categories: UN sanctions and autonomous sanctions.

UN sanctions

2.2 The UN Security Council is the international decision-making body on peace and security matters. Its aim is to prevent threats to peace and security. It derives authority from Article 41 of the Charter of the United Nations to impose sanctions against persons or regimes when their actions threaten or breach international peace and security.

2.3 Actions that may threaten or breach international peace and security include: systematic oppression; abuses of human rights and democratic freedoms within a country; internal or international armed conflicts; and proliferation of weapons of mass destruction.3 Sanctions imposed by the UN Security Council are legally binding on all UN member states. Member states are required to apply sanctions in accordance with decisions of the Security Council.4 *

2.4 According to DFAT, the 'contemporary practice of the Security Council is to impose highly targeted measures aimed at removing the circumstances that have led to a particular threat to, or breach of, international peace and security'/ These include:

" freezing funds, financial assets and economic resources owned or controlled by persons or entities in the member country;

" ensuring that these funds, assets or resources are not made available to

persons or entities subject to sanctions; and

" preventing designated persons entering or transiting through their territories.6

1 Reed M. Wood, 'The Hand upon the Throat of the Nation: Economic Sanctions and State Repression 1976-200 *Ã¬, International Studies Quarterly, (2008), 52, p. 490.

2 DFAT, Submission 3, p. 1.

3 DFAT, Submission 3, p. 1.

4 DFAT, Australia and the United Nations, What measures are imposed as UN Sanctions? http://www.dfat.gov.au/un/unsc sanctions/unsc sanctions measures.html (accessed 2 June 2010).

5 DFAT, Australia and the United Nations, What measures are imposed as UN Sanctions? http://www.dfat.gov.au/un/unsc sanctions/unsc sanctions measures.html (accessed 2 June 2010).

2.5 Goods subject to sanctions include military and security goods and services, including those with potential application to weapons of mass destruction and missile programs, or 'items that are used to fund conflict'.6 7 Food and medical items have been traditionally exempted, but may be indirectly affected 'when a ban on exports deprives the target of the means of paying for food and other essentials'.8 9

Administration in Australia of UN sanctions

2.6 As mentioned in chapter 1, Australia implements UN sanctions through the UN Charter Act. Sanctions are applied by regulations made under the UN Charter Act, or under other legislation *for example, the Customs Act 1901 and regulations, the Migration Act 1958 and regulations, and the Banking (Foreign Exchange) Regulations

1959.9 Contraventions of sanctions are criminal offences.10

2.7 The Department of Foreign Affairs and Trade (DFAT) is the lead Australian Government agency responsible for the administration of UN sanctions. Other agencies with administrative responsibilities include the Department of Defence, Australian Customs and Border Protection Services and the Reserve Bank of Australia.

Autonomous sanctions

2.8 UN and autonomous sanctions are distinct but complementary measures. According to DFAT, autonomous sanctions may be imposed:

" when the UN Security Council is unable to act *for example, because the situation does not fall within its mandate, or because member states cannot reach agreement; or

" to supplement a UN Security Council measure. 11

2.9 Autonomous sanctions are similar in type to UN sanctions and, in addition, may be used to suspend non-humanitarian development assistance and

6 DFAT, Australia and the United Nations, What measures are imposed as UN Sanctions? http://www.dfat.gov.au/un/unsc sanctions/unsc sanctions measures.html (accessed 2 June 2010).

7 DFAT, Australia and the United Nations, What measures are imposed as UN Sanctions? http://www.dfat.gov.au/un/unsc sanctions/unsc sanctions measures.html (accessed 2 June 2010).

8 Margaret Doxey, 'Reflections on the sanctions decade and beyond', International Journal, Spring 2009, p. 543.

9 DFAT, Australia and the United Nations, How are UN sanctions implemented in Australia?, http://www.dfat.gov.au/un/unsc sanctions/unsc sanctions how.html (accessed 27 July 2010).

10 UN Charter Act, ss 27, 28.

11 Department of Foreign Affairs and Trade, Submission 2, p. 2. See further, Margaret Doxey, 'Reflections on the sanctions decade and beyond', International Journal, Spring 2009, p. 541.

govemment-to-govemment links.12 They may be applied by individual countries or groups of like-minded countries. The European Union is an example of a regional group imposing sanctions.13 Governments and academic commentators have foreshadowed a greater role for autonomous sanctions in international diplomacy.14 15

Australian autonomous sanctions

2.10 In his second reading speech, the Minister for Foreign Affairs, the Hon Kevin Rudd MP, emphasised that Australian autonomous sanctions follow international practice *they are intended to be selected measures aimed at maintaining international peace and security.13

2.11 DFAT explained that traditionally, autonomous sanctions in Australia have included financial sanctions, travel restrictions, restrictions on arms exports and a number of executive measures, including suspension of ministerial visits, cultural

relations and non-humanitarian development assistance.16 In contrast to UN sanctions, autonomous financial sanctions 'do not amount to a freeze on all the assets of, or a prohibition on making any assets available' to, individuals and entities subject to sanctions. At the time of writing, Australia has autonomous sanctions in place against

seven countries. Measures include financial sanctions, travel restrictions, arms embargos and the downgrading of govemment-to-govemment contacts.17

The need for new legislation

2.12 Australia has no legislation designed specifically to implement autonomous sanctions. Several submitters to this inquiiy supported the enactment of a coordinated legislative framework, replacing the existing 'patchwork' of instruments, which were said to be limited in many instances because they are intended for other purposes.18

12 DFAT, Australia and the United Nations, What measures are imposed as autonomous sanctions? http://www.dfat.gov.au/un/unsc sanctions/unsc sanctions measures.html (accessed 2 June 2010).

13 Margaret Doxey, 'Reflections on the sanctions decade and beyond', International Journal, Spring 2009, p. 548.

14 See Explanatory Memorandum, p. 1. See also, Margaret Doxey, 'Reflections on the sanctions decade and beyond', International Journal, Spring 2009, p. 547.

15 The Hon Kevin Rudd MP, Minister for Foreign Affairs, Second reading speech, House Hansard, 30 September 2010, p. 259.

16 DFAT, Submission 3, p. 1.

17 These countries are: Burma, Democratic People's Republic of Korea (North Korea), Fiji, the former Federal Republic of Yugoslavia, Iran, Libya and Zimbabwe. See further DFAT, Australia and the United Nations, What measures are imposed as autonomous sanctions? http://www.dfat.gov.au/un/unsc sanctions/unsc sanctions measures.html (accessed 2 March 2011).

18 Reserve Bank of Australia, Submission 1; Department of Foreign Affairs and Trade, Submission 3; Department of Defence, Submission 4\ Financial Services Council, Submission 5.

2.13 For example, the Reserve Bank of Australia (RBA) indicated that it has held longstanding concerns about the efficacy of the current financial sanctions regime under the Banking (Foreign Exchange) Regulations 1959. The RBA observed that these regulations were 'originally promulgated for the protection of Australia's currency and regulation of our foreign currency reserves'.19 Similarly, the Department of Defence *which administers sanctions pertaining to the export of arms and strategic goods20 *argued that using regulations intended for other purposes may prohibit the effective use of sanctions and have unintended consequences.21

2.14 Submitters identified substantial benefits in the proposed legislation, including a more flexible range of policy options, a capacity to match the measures applied by other like-minded countries, enhanced legal certainty, administrative efficiencies, a reduced compliance burden, and improved enforcement.22

Committee view

2.15 The committee recognises that autonomous sanctions are an important foreign policy tool, and acknowledges the need for Australia to have a coordinated legislative framework to optimise the effectiveness of such measures.

19 Reserve Bank of Australia, Submission 1, p. 1.

20 Under the Customs (Prohibited Exports) Regulations 1958 and the Weapons of Mass Destruction (Prevention of Proliferation) Act 1995.

21 Department of Defence, Submission 4, p. 1.

22 Reserve Bank of Australia, Submission 1 ; Department of Foreign Affairs and Trade, Submission 3; Department of Defence, Submission 4 ; Financial Services Council, Submission 5.

Chapter 3

Provisions of the bill

Overview of the bill

3.1 The purpose of the bill is to provide a framework for the application,

enforcement and administration of autonomous sanctions.1 The bill defines an autonomous sanction as one that:

(a) is intended to influence, directly or indirectly, one or more of the following in accordance with Australian Government policy:

(i) a foreign government entity;

(ii) a member of a foreign government entity;

(iii) another person or entity outside Australia; or

(b) involves the prohibition of conduct in or connected with Australia that facilitates, directly or indirectly, the engagement by a person or entity described in subparagraph (a)(i), (ii) or (iii) in action outside Australia that is contrary to Australian Government policy.2

3.2 The three substantive parts of the bill:

" provide for the making of autonomous sanctions by regulation, and the

enforcement of regulations;3

" create offences for:

" the contravention of autonomous sanction laws; and

" the provision of false or misleading information in connection with the administration of an autonomous sanction law;4 and

" establish a scheme for the provision, collection, disclosure and use of

information relevant to the administration of autonomous sanction laws.5

Key issues

3.3 The committee acknowledges the significant merit in the policy underlying the bill, but has identified three matters for further consideration, which were also raised by the Scrutiny of Bills Committee.6 These matters are:

1 Clause 3.

2 Clause 4.

3 Part 2.

4 Part 3.

5 Part 4.

" procedural safeguards in the exercise of proscriptive powers against

individuals or entities;

" drafting matters, particularly apparent ambiguities within provisions and inconsistencies between parts of the bill; and

" the reasoning provided in the Explanatory Memorandum (EM).

3.4 As noted in chapter 1, the Selection of Bills Committee identified the domestic privacy implications of the bill as an issue for consideration.6 7 The committee is satisfied that the bill is compliant with the Privacy Act 1988. This matter is also addressed below.

Procedural safeguards

3.5 The committee has been made aware of issues relating to procedural safeguards in the bill, in particular:

" maintaining transparency and accountability in the application of sanctions made by regulation;8

" minimising the risk that persons may unintentionally contravene autonomous sanctions because they:

" act in reliance upon other primary legislation, unaware that such legislation is subject to sanctions made by regulation;9 or

" are unaware that non-legislative instruments applying sanctions have been incorporated by reference into sanctions made by regulation;10

" balancing the significant public interest in the efficient and effective enforcement of autonomous sanctions with personal rights and liberties.11

3.6 Before turning to individual provisions, the committee notes that these matters arise primarily from the replication of provisions of the UN sanctions implementation legislation, the UN Charter Act. In an advice to the Scrutiny of Bills Committee, the Minister for Foreign Affairs (the Minister) referred extensively to consistency with the UN Charter Act as a rationale for several clauses in the bill.12

6 Senate Standing Committee for the Scrutiny of Bills, Tenth Report of2010, 24 November 2010.

7 Senate Selection of Bills Committee, Report No 11 of2010, 30 September 2010, paragraph 2(c) and Appendix 3.

8 Clause 10.

9 Clauses 12 and 13.

10 Subclause 10(3).

11 Subclause 14(5).

12 Senate Standing Committee for the Scrutiny of Bills, Tenth Report of 2010 (24 November 2010), pp. 389, 390, 392, 393, 394, 396, 398, 399.

3.7 The committee notes, however, that relying on the UN Charter Act to support the provisions in the bill may not be adequate. This view is based on three factors:

" the approach taken to procedural provisions in the UN Charter Act appears to be specific to the legally binding nature of the UN sanctions it implements;

" the international decision-making context in which UN sanctions are made; and

" the guidelines and practices governing due process in the development and implementation of UN sanctions.

The legally binding nature of UN sanctions

3.8 In 2007, DFAT advised the Senate Standing Committee on Legal and Constitutional Affairs that the UN Charter Act did not include external review or other procedural fairness-related provisions because it is concerned with implementing Australia's obligations under Article 25 of the UN Charter to apply UN sanctions.

DFAT advised that there is no legal scope to delay or alter the implementation of UN sanctions by including such measures in the UN Charter Act.13

3.9 The committee notes, however, that the same rationale does not automatically apply to autonomous sanctions, which do not uniformly have a basis in binding obligations under international law.14 15

Decision making context of UN sanctions *international standing

3.10 Under Chapter VII of the Charter of the United Nations, the Security Council can take enforcement measures to maintain or restore international peace and security. In some cases the Council has resorted to using mandatory sanctions as an enforcement tool13 and has established a number of committees charged with overseeing and implementing specific sanctions measures.16 For example, the Al-Qaida and Taliban Sanctions Committee considers listing submissions from

13 Senate Standing Committee on Legal and Constitutional Affairs, Report on the International Trade Integrity Bill 2007, (November 2007), [3.7],

14 Explanatory Memorandum, Autonomous Sanctions Bill 2010 (Cth) (EM), p 1; Department of Foreign Affairs and Trade, Submission 3, p.l.

15 See for example, Security Council S/RES/1373 (2001), 28 September 2001 (prevention and suppression of the financing of terrorist acts), implemented in Australia under Part 4 of the UN Charter Act.

16 See for example, Security Council Committee established pursuant to Resolution 1267 (1999); Security Council Committee established pursuant to 1636 (2005); and Security Council Committee established pursuant to Resolution 1718 (2006).

member states, delisting requests and proposed updates to the existing information relevant to the list of individuals or entities associated with Al-Qaida or the Taliban.17

3.11 The committees, established pursuant to a resolution passed by the Council, are subsidiary organs of the Council, consist of all members of the Council, and make decisions by consensus of all its members. As acknowledged by the Foreign Minister of Greece, UN sanctions are:

A powerful expression of the collective voice and collective will of the international community ...

Sanctions, imposed in a manner that signals the unity of purpose and determination of the international community, can achieve results without the use of force.18

3.12 Thus UN sanctions *and the due process requirements built into them *carry significant weight, legitimacy and credibility in the international community. Autonomous sanctions do not necessarily have this advantage.

Guidelines and practices governing due process in UN sanctions

3.13 The Security Council has over many years recognised the importance of ensuring due process for the listing and de-listing of individuals or entities designated for targeted sanctions.19 In September 2005, the UN General Assembly passed a resolution that, among other things, called upon the Security Council 'to ensure that fair and clear procedures exist for placing individuals and entities on sanctions lists and removing them, as well as for granting humanitarian exceptions.' In October 2005 the General Assembly resolved that:

Sanctions should be implemented and monitored effectively with clear benchmarks and should be periodically reviewed, as appropriate, and remain for as limited a period as necessary to achieve their objectives and should be terminated once the objectives have been achieved.

3.14 The Assembly called on the Security Council 'to improve its monitoring of the implementation and effects of sanctions, to ensure that sanctions are implemented in an accountable manner, to review regularly the results of such monitoring and to

develop a mechanism to address special economic problems arising from the

17 Security Council Committee established pursuant to Resolution 1267 (1999) concerning Al-Qaida and the Taliban and associated individuals and entities, Guidelines of the Committee for the Conduct of its Work..

18 United Nations Security Council, Annex to letter dated 12 December 2007 from the Permanent Representative of Greece to the United Nations addressed to the President of the Security Council, 'Enhancing the Implementation of the United Nations Security Council', A Symposium, 30 April 2007, S/2007/734, p. 2.

19 For a summary of measures see, for example, Thomas J. Biersteker and Sue E. Eckert, Strengthening Targeted Sanctions Through Fair and Clear Procedures, White Paper prepared by the Watson Institute Targeted Sanctions Project, Brown University, 30 March 2006.

application of sanctions in accordance with the Charter.' It also called on the Security Council 'to ensure that fair and clear procedures exist for placing individuals and entities on sanctions lists and for removing them, as well as for granting humanitarian exemptions.'20

3.15 In December 2006, the Security Council gave its commitment to ensuring that fair and clear procedures exist for placing individuals and entities on sanctions lists and for removing them, as well as for granting humanitarian exemptions.21 Since then the Security Council has continued to adopt resolutions directing its sanctions committees to review their guidelines and their consolidated lists. It has encouraged the committees to continue to ensure that 'fair procedures exist for placing individuals and entities on and for removing them from the Consolidated List and direct them to keep guidelines under 'active review in support of these objectives'.22 Each committee has guidelines for the conduct of its work. In 2009, as part of this commitment, the Security Council adopted a resolution establishing the Office of the Ombudsperson for the Al-Qaida and Taliban Sanctions Committee.23

3.16 The Council of the European Union has similarly taken steps to ensure that the implementation and evaluation of its UN and autonomous sanctions adhere to basic principles. For example, its guidelines state that:

The introduction and implementation of restrictive measures must always be in accordance with international law. They must respect human rights and fundamental freedoms, in particular due process and the right to an effective remedy. The measures imposed must always be proportionate to their objective.24

3.17 The guidelines also note the need to respect fundamental rights, which implies, in particular, that proper attention is given to the protection and observance of due process rights of the persons to be listed.25

3.18 In June 2010, the Permanent Representative of Australia to the UN Security Council commented that due process is essential to the credibility of targeted sanctions:

20 United Nations General Assembly, A/RES/60/1, 24 October 2005, paragraphs 106-109.

21 It resolved to adopt a de-listing procedure and directed its various sanctions committees to revise their guidelines accordingly. United Nations Security Council, S/RES/1730 (2006), 19 December 2006. See also Statement by the President of the Security Council, S/PRST/2006/28, 22 June 2006.

22 See for example, Security Council, S/RES/1822 (2008), 30 June 2008, paragraphs, 21,22, 25, 26, 28, 29 and S/RES/1904 (2009), paragraphs 14, 19, 20, 21, 34, 35.

23 Security Council, RES/1904 (2009), 17 December 2009, paragraphs 20-21.

24 European Union, Guidelines on Implementation and Evaluation of Restrictive Measures (Sanctions) in the Framework of the EU Common Foreign and Security Policy, 2 December 2005, Doc. 15114/05 PESC 1084 Fin 475.

25 ibid.

Member States have a legal obligation under the Charter to accept and enforce sanction measures created by the Council pursuant to Chapter VII. Australia takes this obligation seriously. However, as we have seen in recent years, the legitimacy and effectiveness of such measures depends, in large part, on perceptions of procedural fairness.26

3.19 Australia's autonomous sanctions do not have the same legal standing as UN sanctions and, based on the provisions of the bill, will not require a

decision-making process that is subject to the same level of scrutiny. In this regard, the committee believes that the bill would benefit from providing assurances about the soundness of the decision-making process and of the protection of individual rights.

3.20 As noted above, the Scrutiny of Bills Committee has identified a number of provisions that raise issues about procedural safeguards in provisions of the bill. These provisions are examined individually below.

The application of sanctions by regulation

3.21 Subclause 10(1) authorises the Governor-General to make sanctions by regulation for purposes including the proscription of persons or entities, and restrictions on the uses or availability of assets and the provision of goods and services.27

3.22 Before the Governor-General makes such regulations, the Minister must be satisfied that the proposed regulations will:

" facilitate the conduct of Australia *s relations with other countries, or with entities or persons outside Australia; or

" otherwise deal with matters, things or relationships outside Australia.28

3.23 The bill does not make provision for the internal or external merits review of decisions to apply sanctions made by regulation under subclause 10(1) *for example, decisions to name an individual or entity on a sanctions list, or to determine that an

individual or entity falls within categories of persons or entities identified on a sanctions list.

3.24 While the provisions of the bill do not oust judicial review rights, one submitter, the Queensland Law Society (QLS), expressed concern about the limitations of this remedy. The QLS referred to a 2010 decision of the Federal Court, suggesting that such decisions are not reviewable because they are non-justiciable

26 Gary Quinlan, Ambassador and Permanent Representative of Australia to the United Nations Security Council, Statement to the United Nations Security Council Regarding the Promotion and Strengthening of the Rule of Law in the Maintenance of International Peace and Security, S/PV6347 (Resumption 1), 29 June 2010, p. 8.

27 Subclauses 10(1 )(a)-(f).

28 Subclause 10(2).

political decisions.29 In Aye v Minister for Immigration and Citizenship ,30 a 2:1 majority of the Full Federal Court held that a Ministerial decision in relation to the application of bilateral financial sanctions to a Burmese national in Australia on a student visa was a non-justiciable political decision.31

3.25 The QLS referred to the court's finding of fact that the Minister made a determination under the Migration Regulations that the appellant's presence in Australia was contrary to Australia's foreign policy interests. This had the effect of cancelling the appellant's visa. The basis for the determination was that the appellant was deemed to fall within a class of persons who were subject to sanctions. The appellant was the adult daughter of a senior member of the Burmese militaiy. Her father was identified by name in the sanctions list, together with his 'close family members' who were identified by that category. The appellant had not concealed her

identity at the time of her entry into Australia. She had been in Australia for some time, had almost completed a masters degree and was about to enter into full-time employment when her identity was discovered and the Ministerial determination made. Her claim to remain in Australia rested on a submission that she was estranged

from her father, did not share the views that led to the imposition of the sanction and was financially independent of her parents.32

3.26 The QLS noted the court's decision that, if the Minister's determination were justiciable, any duty to afford procedural fairness would have been limited to a requirement that the Minister advise the appellant he was considering making the

decision, and allowing her to make submissions as to whether she was a member of the listed person's family, and whether in particular she was the daughter of the listed person.33

3.27 According to the QLS, the decision that such determinations are

non-reviewable heightens concerns about the sanctions policy underlying the bill. The QLS commented, in relation to the sanction applied in Ms Aye's case, that:

...the language of the sanction means that it accepts and embodies the principle of guilt by association without examination of the facts that support the policy of the sanction. This is repugnant to our common law tradition, and it is only in times of the gravest national crisis that our laws have operated on that basis,34

29 Queensland Law Society, Submission 2A, p. 1.

30 [2010] FCAFC 69 (11 June 2010).

31 ibid, [9]-[15] (Spender J), [125]-[128] (McKerracher J); [108] (Lander J, in dissent).

32 ibid, [18]-[45] (Lander J).

33 ibid, [16] (Spender J), [122] (McKerracher J), [114]-[115] (Lander J).

34 Queensland Law Society, Submission 2A, p 2.

3.28 The QLS submitted that 'more precision is needed as to the language and focus of the policy underlying autonomous sanctions'.35

Committee view

3.29 The committee considers that a regulation-making power is necessary for autonomous sanctions to be applied with the requisite speed and flexibility to respond effectively to situations of international concern.

3.30 The committee notes that the decision of the Full Federal Court in Aye v Minister for Immigration and Citizenship is consistent with the application of sanctions. There was no prima facie breach of rights in that case. The decision to apply sanctions is a non-justiciable political decision that is, by definition, not open to judicial review. There was no substantial argument put by any submitter for the

internal or external merits review of a decision to impose sanctions. However, government decision making needs to be clear and transparent. The agreement between the Gillard government and the Independent Members of Parliament of 7 September 2010 included an agreement to pursue the principle of transparent and

accountable government.36 This agreement does not exclude DFAT, Defence or the Attorney-General's Department. To the extent that it is a whole-of-govemment agreement, the commitment to pursue this principle is binding on these departments of

state.

3.31 The committee has not been made aware of any substantial abuse, systematic misuse or even aberrant behaviour in the application of autonomous sanctions to date. Nevertheless, mistakes or abuse could occur in the future. This needs to be avoided as

it could compromise the utility of sanctions application in the future. Accordingly, as an aid to sound, proper and lawful decision making, the government should consider firm steps to implement a suite of appropriate measures that provide for such outcomes on all occasions.

3.32 Such measures could include the development of best practice guidelines for the formulation, application, enforcement and administration of autonomous sanctions. The principles and guidelines produced by the Council of Europe may provide useful guidance in this respect.37 The committee encourages comprehensive public and industry consultation in the development of any such guidelines.

35 ibid.

36 Agreement between the Australian Labor Party (The Hon Julia Gillard MP and the Hon Wayne Swan MP) and the Independent Members (Mr Tony Windsor MP and Mr Rob Oakeshott MP), 7 September 2010, Clause 2.1(a).

37 See for example, Council of the European Union, Basic Principles on the Use of Restrictive Measures (Sanctions), 7 June 2004, Doc. 10198/1/04 PESC 450 REV1; Council of the European Union, Guidelines on Implementation and Evaluation of Restrictive Measures (Sanctions) in the Framework of the EU Common Foreign and Security Policy, 2 December

2005, Doc. 15114/05 PESC 1084 Fin 475.

Recommendation 1

public consultation.

Incorporation by reference to extrinsic material

3.34 Subclause 10(3) permits sanction regulations made under subclause 10(1) to incorporate material by reference to other instruments, or other writing as in force from time-to-time. Neither subclause 10(3) nor the EM identify the types of 'other writing' that may be incorporated by reference.

3.35 The Scrutiny of Bills Committee identified subclause 10(3) as a possible inappropriate delegation of legislation, because the EM does not justify specifically the need for incorporation by reference. While recognising the need for flexibility in the application of autonomous sanctions, the Scrutiny of Bills Committee stated that this explanation 'does not identify the necessity for regulations to incorporate other instruments by reference'.38

3.36 In response, the Minister advised that subclause 10(3) corresponds substantially to subsection 6(3) of the UN Charter Act. The Minister further noted the targeted nature of autonomous sanctions, the need for flexibility in setting the scope of sanctions measures, the importance of rapid responses to situations of international concern, and the benefits of ensuring harmonised measures across like-minded implementing countries. The Minister advised that the provision is intended to enable the incorporation of government-prepared sanctions lists and those prepared by international export control regimes, such as the Nuclear Suppliers Group, the Missile Technology Control Regime, the Australia Group and the Wassenaar Arrangement.39

Committee view

3.37 The committee recognises the overriding importance of maintaining consistency with autonomous sanctions imposed by like-minded countries, and the need for flexibility and timeliness in responding to situations of international concern. Accordingly, the committee notes the explanation offered by the government in paragraph 3.36 above. One further matter remains for discussion.

3.38 The committee notes that the incorporation by reference of'other writing' may not provide sufficient guidance to persons whose rights may be affected by autonomous sanctions.

38 Senate Standing Committee for the Scrutiny of Bills, Tenth Report of 2010 (24 November 2010), p.388.

39 ibid, p.389.

3.39 The committee considers that an indication in the EM of the types of 'other writing' that may be incorporated by reference would assist such persons to understand the sources they should consult to ascertain the existence and content of sanctions, and inform themselves of their compliance obligations.

3.40 The committee notes that the EM to the legislation amending the UN Charter Act, the International Trade Integrity Act 2007, indicated that 'other writing' may include UN Security Council Resolutions, decisions of UN sanctions committees, or documents prepared by the government where it is not possible or is inappropriate to identify the matter by reference to UN Security Council materials. The EM to the International Trade Integrity Act further expressed the government's intention to incorporate by reference 'publicly available' documents.40

Recommendation 2

3.41 The committee recommends that the government amend the Explanatory Memorandum to include guidance about the types of *other writing * that may be incorporated by reference in regulations made under subclause 10(3).

Effect of sanctions on other legislation

3.42 Clauses 12 and 13 provide that sanctions applied by regulations made under Clause 10 take effect over, respectively, existing and future legislation.

3.43 The Scrutiny of Bills Committee identified these clauses as possible inappropriate delegations of legislation because:

" Clause 12 is a Henry VIII clause, in that it permits subordinate legislation (regulations made under Clause 10) to take precedence over primary legislation; and

" Clause 13 overrides the doctrine of implied legislative repeal *'the normal assumption that future legislation may impliedly repeal earlier legislation'.41

3.44 The Minister advised the Scrutiny of Bills Committee that the provisions are necessary and appropriate due to:

" the existence of corresponding provisions in the UN Charter Act;

" the fact that decisions to impose sanctions are properly matters for the

executive as matters of foreign policy, with Parliamentary oversight of the legal framework and parameters for adoption;

40 Explanatory Memorandum, International Trade Integrity Bill 2007, p. 4. See further, Senate Standing Committee for the Scrutiny of Bills, Alert Digest No 7 of2007 (20 June 2007), p 7.

41 Senate Standing Committee for the Scrutiny of Bills, Tenth Report of 2010 (24 November 2010) pp. 390-392.

" the highly targeted nature of autonomous sanctions, meaning that there would be limited circumstances in which autonomous sanctions regulations would override existing or future laws;

" the efficacy of the proposed scheme *in particular, the need to respond rapidly to situations of grave international concern, without complications caused by the inadvertent creation of exceptions to, or the unintentional repeal of, autonomous sanctions; and

" the maintenance of appropriate parliamentary scrutiny via subclause 13(2), which enables future legislation to override sanctions regulations by express provision.42

3.45 DFAT further submitted that alignment with the corresponding provisions in the UN Charter Act is necessary to ensure that autonomous sanctions laws will have 'legal equivalence' to Australian laws implementing UN sanctions.43

Committee view

3.46 The committee acknowledges that in order to respond rapidly to situations of international concern, autonomous sanctions must be applied and administered efficiently. The proposed measures have the advantages of efficiency and convenience.

3.47 The committee is concerned, however, about the risk that a person may unintentionally contravene the proposed legislation because he or she relies upon another Act of Parliament, unaware that sanction regulations have superseded the provisions in that other Act. Given the proposed criminal consequences for the contravention of sanctions, the committee considers that the EM should provide reasons for the reversal of established principles of statutory interpretation.

3.48 The committee notes this risk could be further managed through effective 'front-end' compliance measures *including public notification mechanisms for autonomous sanctions created by regulation. The committee notes the Minister's advice to the Scrutiny of Bills Committee that the government makes substantial efforts to ensure that the public is advised of sanction laws:

[DFAT] conducts extensive outreach activities to attempt to ensure that potentially affected persons have relevant information on sanction laws. This includes targeted outreach activities throughout Australia with business and industiy (at least annually); maintenance of a comprehensive

sanctions website which provides links to relevant legislation and legislative instruments; and operation of a public email service.44

42 ibid.

43 DFAT, Submission 3, p. 3.

44 Senate Standing Committee for the Scrutiny of Bills, Tenth Report of 2010 (24 November 2010), pp. 394-395.

3.49 However, one submitter, the Group of Eight Ltd (Go8), expressed concerns about the adequacy of existing notification mechanisms. The Go8 commented in December 2010 on difficulties experienced by member universities in obtaining the necessary information to screen applications from overseas students:

Universities do not have access to intelligence services and could find themselves in a very difficult position. How should universities assess the risk posed by individual applicants in advance without such intelligence services?

One Go8 member university, in an attempt to do the right thing ... sent a

batch of more than 20 applications from students in Iran directly to DFAT for consideration [as to whether these persons were subject to sanctions]. Nearly three months later there has been no final response. Clearly this is not a solution for the longer term as universities need to have flexibility to respond quickly to student enquiries and applications.45

3.50 The committee reiterates its support for the government taking firm steps to implement measures to prevent inadvertent breaches of autonomous sanctions. The committee encourages comprehensive public consultation in the development and regular review of notification procedures, to ensure that they meet stakeholder needs.

Enforcement *interim injunctions

3.51 Clause 14 provides that a superior court may, on the application of the Attorney-General, grant an injunction restraining a person from engaging in conduct that contravenes an autonomous sanction made by regulation under Clause 10. Clause 14 provides for permanent (final) injunctions and interim injunctions, which

apply pending the determination of an application for a permanent injunction.

3.52 Subclause 14(5) prevents the court from requiring, as a condition of an interim injunction, the Attorney-General to provide an undertaking as to damages. This removes the usual discretion of the court to require an undertaking where an interim injunction restraining conduct (such as trade or business) would, in its opinion, cause adverse consequences if it is ultimately found that a person has not contravened an autonomous sanction.46 A court may determine that adverse consequences would arise, for example, where an interim injunction would prevent a person from earning a livelihood until the application for a permanent injunction is resolved. An undertaking as to damages would compensate the person for his or her

lost earnings, should the court subsequently dismiss the application for a permanent injunction.

45 The Group of Eight Ltd, Submission 6, p. 1.

46 See, for example, Federal Court of Australia, Practice Note CM 14 (usual undertaking as to damages).

3.53 As the EM was silent on the reasons for this provision, the Scrutiny of Bills Committee identified subclause 14(5) as potentially trespassing unduly on personal rights and liberties. The Scrutiny of Bills Committee called upon the Minister to explain the rationale for this provision and identify the extent of detriment that persons may suffer as a result.

3.54 The Minister advised that:

" the UN Charter Act contains a corresponding provision;

" it is not appropriate, as a matter of policy, to require an undertaking as to

damages in an application to prevent the commission of a criminal offence; and

" the provision is consistent with the concept of crown immunity in respect of a lawfully made decision of a Minister.47 48

Committee view

3.55 The committee notes the explanation offered by the government for the inclusion of this provision. Each piece of advice at paragraph 3.54 above is capable of rebuttal or rejection. Arguments for the inclusion of subclause 14(5) appear to be delicately balanced. Accordingly, the committee has had determinative regard in this instance to the overriding purpose of the bill as outlined in chapter 1 of this report. Nonetheless, the wider community should be aware of this significant development

and its potential implementation. Accordingly, the committee considers that the EM should set out the reasons for including subclause 14(5).

Recommendation 3

3.56 The committee recommends that the government should amend the Explanatory Memorandum to set out the reasons for including subclause 14(5).

Drafting matters

3.57 The committee now turns to several drafting issues contained in the bill. The committee has been made aware of apparent ambiguities within provisions and inconsistencies between parts of the bill.

Enforcement of sanctions made by regulation under Clause 10

3.58 Part 2, Division 2 of the bill creates mechanisms for the enforcement of sanctions applied by regulations made under Clause 10. These mechanisms are:

" injunctions to restrain contraventions, or apprehended contraventions, of sanctions; and

47 Senate Standing Committee for the Scrutiny of Bills, Tenth Report of 2010 (24 November 2010), p 393.

48 Clause 14.

" the invalidations of authorisations (such as licences, permissions, consents or approvals granted to persons or entities to engage in conduct or activities that would otherwise be prohibited by sanctions), where such authorisations are obtained through the provision of materially false or misleading information.49

3.59 These provisions are expressed as applying to sanctions imposed, or authorisations granted, pursuant to regulations made under Clause 10.50 51 52 Clauses 14 and 15 do not extend to the enforcement of 'sanction laws' more broadly. ('Sanction laws' are defined in Clause 4 as 'a provision that is specified in an instrument under

subsection 6(1)'.31 The effect is that a contravention of a sanction law enlivens the offence provisions in Clauses 16 and 17.)

3.60 This means that enforcement mechanisms for 'sanction laws' will be governed by the provisions of the relevant 'sanction law', or the common law if that legislation is silent. This may lead to inconsistencies between enforcement mechanisms available

in respect of regulations made under Clause 10, and those available under other sanction laws.

Committee view

3.61 The committee notes that the limitation of Part 2, Division 2 to sanctions made by regulation may be inconsistent with the purpose of the bill, to 'provide for the enforcement of autonomous sanctions (whether applied under this Act or another law of the Commonwealth) V2

3.62 Accordingly, the committee considers that there would be benefit in giving consideration to extending Part 2, Division 2 to the enforcement of sanction laws more broadly. If there is no legislative intention to do so, however, the committee considers that the EM should explain how Part 2, Division 2 is consistent with the purpose of the bill, as expressed in subclause 3(b).

Recommendation 4

3.63 The committee recommends that the government consider:

" extending Part 2, Division 2 to the enforcement of sanction laws as defined in Clause 4; or

49 Clause 15.

50 Subclause 14(1) and Clause 15.

51 Subclause 6(1) provides that a Minister may, by legislative instrument, specify a provision of a law of the Commonwealth as a sanction law.

52 Subclause 3(b).

Offences for the contravention of sanctions

3.64 Clause 16 creates offences for the contravention, by individuals and bodies corporate, of:

" sanction laws; and

" conditions of an authorisation (such as a licence, permission or consent) to engage in conduct or activities otherwise prohibited by a sanction law.33

3.65 The relevant maximum penalties identified in subclauses 16(4) and 16(9) are:

" for individuals, 10 years imprisonment and the greater of 2,500 penalty units or three times the value of the relevant transaction or transactions; and

" for bodies corporate, the greater of 10,000 penalty units or three times the value of the relevant transaction or transactions.

3.66 Clause 16 is based on a corresponding provision in the UN Charter Act, which was inserted by amendment in 2007, in response to the recommendations of the Cole Inquiry into the conduct of certain Australian companies in relation to the UN Oil-for- Food Program.34

3.67 The offences applying to individuals in subclauses 16(1) and 16(2) are expressed as fault-based offences. This means that each physical element of the offences (namely, conduct, which contravenes a sanction law or the condition of an authorisation) must be accompanied by a corresponding mental element (such as intention, recklessness, knowledge or negligence). Because the bill does not identify specific fault elements, the Criminal Code implies the following fault elements:

" an individual must intentionally engage in the conduct identified in subclauses 16(l)(a) and 16(2)(a);53 54 55 and

" the individual must be reckless as to whether the conduct contravenes a sanction law or a condition of an authorisation under a sanctions law for the purposes of subclauses 16(l)(b) and 16(2)(b),56

3.68 Subclause 16(8) provides that the body corporate offences are of strict liability, meaning that the offences in subclauses 16(5) and 16(6) do not require fault elements, but only physical elements (that is, engaging in conduct, which contravenes a sanction law or a condition of an authorisation). Subclause 16(7) provides an absolute defence for bodies corporate which can prove that they took reasonable

_______________________________________________________________________________________________________________________ 21_

53 Subclauses 16(1)-16(10).

54 Senate Standing Committee for the Scrutiny of Bills, Tenth Report of2010, 24 November 2010, p. 394 (the Minister's advice referred to s 27 of the UN Charter Act).

55 Criminal Code s 5.6(1).

56 Criminal Code s 5.6(2). Note that under s 5.4(4), recklessness can be established by proving intention or knowledge, or recklessness as defined in ss 5.4(l)-(3).

precautions and exercised due diligence to avoid contravening subclauses 16(5) and 16(6).57 In addition, bodies corporate may plead the defence of honest and reasonable mistake of fact in the Criminal Code.58

3.69 Four issues arise in respect of Clause 16, which are considered below.

Strict liability offences for bodies corporate

3.70 As noted above, offences committed by bodies corporate under subclauses 16(5) 16(6) are of strict liability. The Guide to Framing Commonwealth Offences, Civil Penalties and Enforcement Powers provides that strict liability offences must be properly justified. The guide cites the Scrutiny of Bills Committee opinion that such offences should be introduced only after careful consideration on a case-by-case basis

of all available options.59

3.71 The rationale for the strict liability of bodies corporate in Clause 16(8) is not addressed in the EM, however the Minister advised the Scrutiny of Bills Committee that:

" the clause corresponds to provisions of the UN Charter Act, to ensure

identical consequences for a breach of Australian laws implementing both autonomous and UN sanctions;

" the provision in the UN Charter Act follows the recommendation of the Cole Inquiry;60 and

" the strict liability of bodies corporate is balanced by the absolute defence of due diligence in the bill.61

Committee view

3.72 The committee considers that there is a strong case for the inclusion of strict liability offences in subclauses 16(5) and 16(6). However, consistent with the Gidde to

57 The Criminal Code provides that the body corporate bears the legal burden of establishing the defence on the balance of probabilities. Once this is done, the prosecution must refute the defence beyond reasonable doubt: Criminal Code ss 13.4 and 13.5.

58 Criminal Code s 9.2.

59 Guide to Framing Commonwealth Offences, Civil Penalties and Enforcement Powers, issued by authority of the Minister for Home Affairs (December 2007), [4.5].

60 The Hon Terrence Cole AO RFD QC, Report of the Inquiry into Certain Australian Companies in Relation to the UN Oil-for-Food Programme, Volume 1 (November 2006), Recommendation 2. This recommendation was accepted by government (in respect of bodies corporate but not individuals) and considered appropriate for broader application to all sanctions regimes: Australian Government, Response to the Report of the Inquiry into Certain Australian Companies in Relation to the UN Oil-for-Food Programme (2007).

61 Senate Standing Committee for the Scrutiny of Bills, Tenth Report of2010, 24 November 2010, pp. 396-397.

Framing Commonwealth Offences, Civil Penalties and Enforcement Powers , the committee considers that these reasons should be set out in the EM.

Recommendation 5

Defining criminal offences by reference to legislative instruments

3.74 The Scrutiny of Bills Committee identified subclauses 16(1) and 16(5) as potentially trespassing unduly on personal rights and liberties because the offences are defined by reference to a legislative instrument *namely a 'sanction law' as designated

by a legislative instrument made under Clause 6. The Scrutiny of Bills Committee sought the Minster's advice as to whether it would be possible to 'prescribe mechanisms for ensuring that potentially affected persons receive appropriate notice that a particular law has, under Clause 6, been specified as a sanction law'.62

3.75 The Minister advised that the specification of a sanction law by legislative instrument provides transparency and affords parliamentary scrutiny by way of disallowance. As noted above, the Minister stated that the government makes substantial efforts to provide public outreach and advice services.63 DFAT further commented that 'the sanction law instrument will act as an index to all laws to which the provisions of the bill, once enacted, will apply'.64

Committee view

3.76 The committee considers that the definition of offences by reference to 'sanction laws' in subclauses 16(1) and 16(5) is desirable. The committee sees significant benefit in identifying all sanction laws in a single legislative instrument. This approach would facilitate public awareness of the existence of sanction laws, as well as parliamentary scmtiny, since the instrument would be subject to disallowance. The committee considers it important that Clause 16 is accompanied by effective public notification mechanisms. It is encouraged by the Minister's assurance of the government's commitment to public outreach.

Defining criminal liability by reference to administrative instruments

3.77 The QLS expressed concern that subclause 16(2) is a violation of the doctrine of the separation of powers. It stated:

62 ibid, p. 394.

63 See further, Department of Defence, Submission 4, p. 2 for a summary of Defence involvement in industry engagement on sanctions, through the Defence Export Control Office.

64 DFAT, Submission 3, p. 5.

[Sub]clause 16(2)(a) fails to describe what 'conduct' is prohibited. Therefore an individual cannot refer to the bill and simply ascertain what acts or omissions will be caught by the legislation. Instead, the clause purports to criminalise conduct which contravenes a condition of an authorisation under a sanction law. The making of such authorisations is a function of the

executive arm of government. Therefore, by stating that an individual who engages in conduct that contravenes a condition of an authorisation ... under a sanction law, is tantamount to the executive having the power to create offences of an ad hoc basis. The making of laws and the creation of offences is a function of the legislature and the delegation of this power to the executive has serious implications for the separation of powers'.65

3.78 The QLS further submitted that subclause 16(2) may have 'unintended and unfair consequences' in that it may expose to criminal liability individuals who are not directly subject to an authorisation. It further noted that there is 'no reasonable precautions defence available to individuals as there is for bodies corporate in

[subjclause 16(7)'.

3.79 To address its concerns, the QLS proposed a single offence of 'engaging in conduct that is proscribed under a sanction law', with an inclusive definition of what may constitute 'proscribed conduct'.66

Committee view

3.80 The committee is not convinced that subclause 16(2) presents any separation of powers issues. It is clear on the face of the provision that the role of the executive is limited to the granting of authorisations. It is the legislature that ascribes criminal consequences to the contravention of an authorisation.

3.81 The committee considers remote the prospect that a person may be exposed to criminal liability where he or she is not directly subject to an authorisation. The illustrative examples of an authorisation in the note to subclause 16(2)67 suggest that such instruments are issued to individuals upon application, and their conditions apply only to those individuals. Further, in the event that the conditions of authorisations have a broader application, the fault element of the reckless contravention of a

condition would likely prevent this outcome. Under the Criminal Code, a finding of recklessness would require an individual to have been aware of a substantial risk that his or her conduct would contravene a condition of an authorisation, and to have nevertheless taken that risk unjustifiably.68 It is unlikely, in the committee's view, that

65 Queensland Law Society, Submission 2, p. 1.

66 ibid, p. 2.

67 Namely, a licence, permission, consent or approval.

68 Criminal Code, s 5.4.

an individual would be aware of a substantial risk that he or she may contravene the conditions of an authorisation granted to another person.69

3.82 The committee notes, however, that while the Guide to Framing Commonwealth Offences, Civil Penalties and Enforcement Powers does not expressly address this issue, it includes the following sample offence (to illustrate a different point, about the identification of the physical elements of an offence for the contravention of a licence condition):

[T]he offence should be framed in the following terms:

A person is guilty of an offence if:

(a) the person holds a licence (emphasis added); and

(b) engages in conduct; and

3.83 Accordingly, the committee considers that for the avoidance of doubt, consideration should be given to including in subclause 16(2) an additional element that an individual must hold an authorisation.

3.84 The committee favours the approach taken to the framing of the offence in subclause 16(2) over a single offence of'engaging in conduct that is proscribed under a sanction law'. In reaching this view, the committee is guided by the requirement in the Guide to Framing Commonwealth Offences, Civil Penalties and Enforcement Powers that offences should be drafted:

...so that each physical element of the offence is a in a separate paragraph. In particular, the conduct, circumstances and results constituting the offence should be set out in separate paragraphs.70

3.85 This drafting practice enables the relevant fault elements to be applied to each physical element. The committee notes that the offence as it is currently drafted requires an individual to have intentionally engaged in conduct (that is, an act or omission), and to have been reckless as to whether that conduct contravenes the

condition of an authorisation. Consistent with the abovementioned Guide, this formulation makes clear that the contravention is the result of conduct, rather than the conduct itself.

3.86 Framing an offence around the conduct itself *that is, the intentional contravention of a licence condition *may have unintended consequences. It may mean that an individual who holds an authorisation could avoid criminal responsibility

for contravening its conditions simply because he or she did not specifically mean to

69 The defences of mistake or ignorance of fact, and subordinate legislation in ss 9.1 and 9.4 of the Criminal Code may also be available to individuals in such circumstances.

70 Australian Government, Guide to Framing Commonwealth Offences, Civil Penalties and Enforcement Powers (December 2007), pp. 17-18.

do so. This would be the case even if the individual was aware of a substantial risk that his or her conduct may contravene the condition, and elected, unjustifiably in the circumstances, to take that risk. The committee is concerned that this approach may undermine the enforceability of autonomous sanctions, and may not provide a sufficient incentive to comply with sanction laws or the conditions of authorisations.

3.87 Finally, while the committee is conscious of the need to prevent unintentional contraventions of autonomous sanctions, it is not convinced that a 'due diligence' defence to subclause 16(2) is necessary for individuals. The fact that an individual

exercised due diligence is relevant to the fault element of recklessness. It is unlikely that an individual who took reasonable precautions and exercised due diligence to avoid contravening the condition of an authorisation could be found to have taken an unjustifiable risk in the circumstances. The committee considers that a specific 'due diligence' defence, such as that contained in subclause 16(7) for bodies corporate, is necessary only in respect of strict liability offences.

Recommendation 6

3.88 The committee recommends that, for the avoidance of doubt, the government consider including in subclause 16(2) an element that an individual must hold an authorisation.

Front-end compliance

3.89 The QLS expressed concern that Clause 16 does not provide sufficient guidance on front-end compliance *that is, the acts or omissions that are necessary to comply with the provisions of the bill. It submitted that:

Failure to provide guidance on what is appropriate due diligence will result in many individuals inadvertently breaching the legislation. For example, a lawyer performing due diligence in a transaction may fail to undertake a search which may result in an unintentional breach of the legislation.71

3.90 The QLS suggested a front-end compliance model by which DFAT would undertake measures including:

Guidance documents, hypothetical scenarios, compliance checklists and decision trees (similar to those used by the Queensland Office of State Revenue) on their website which would assist the legal profession and public in complying with this legislation.72

3.91 It further submitted that:

71 Queensland Law Society, Submission 2,p. 2.

72 ibid.

If the individual or body corporate complies or makes a genuine attempt to comply with these guidance materials, their actions and omissions should not be subject to prosecution under Clause 16(10) of the bill.73

3.92 The Financial Services Council Ltd similarly commented that, 'at the least, guidance should be provided on the application of the law to clarify who should comply [with autonomous sanctions] and how'. It proposed legislative measures directed to promoting front-end compliance, including:

" limiting obligations to perform due diligence about the existence of sanctions to designated 'gatekeepers', to avoid duplication of compliance activities. (For example, in the case of financial sanctions, it suggested that only the last sender of funds out of Australia and the first receiver of funds into Australia should be required to undertake due diligence, and other entities would be entitled to rely upon those gatekeepers);

" limiting criminal liability to international transactions, on the assumption that the Australian Government (through agencies such as the Department of Immigration and Citizenship and ASIC) will ensure that there are no persons in Australia who are on autonomous sanctions lists;74 and

" as an additional safeguard to assist Australian companies comply with the autonomous sanctions regimes of other like-minded countries, requiring the government to monitor the autonomous sanctions lists of other countries and provide public notifications of listed entities or persons with a presence in Australia.75

Committee view

3.93 The committee reiterates its support for effective notification and public outreach mechanisms, including those directed to front-end compliance. It strongly encourages widespread consultation with relevant stakeholders in the formulation and ongoing development of outreach strategies.

3.94 The committee does not, however, support the inclusion in the bill of legislative front-end compliance measures, such as statutory notification requirements. It is evident from submissions that the nature and scope of due diligence requirements may be highly specific to individual sanctions. Prescribing standardised notification and front-end compliance measures may inadvertently enlarge the compliance burden by requiring actions that may not be necessary in all cases. The committee notes that the Governor-General has a regulation-making power in Clause 28 for various matters incidental to the operation of the proposed legislation. This power would enable the

73 ibid.

74 The Group of Eight Universities Ltd raised a similar point, submitting that the government should implement a process to 'flag the individuals considered to pose a risk and communicate this information to DIAC to ensure that those students are not issued a visa': Submission 6, p. 1.

75 Financial Services Council Submission 5, pp. 2-4.

government to implement regulatory front-end compliance measures that are specific to individual sanctions, if required.

3.95 Similarly, the committee is not convinced that a new defence is necessary for 'genuine attempts' to comply with guidance materials. In the case of bodies corporate, this factor would be relevant to the 'due diligence' defence in subclause 16(7). In the case of individuals, this would go to the issue of recklessness in contravening a

sanction law or condition of an authorisation under subclauses 16(1) and (2).

Offences for providing false or misleading information

3.96 Clause 17 creates offences for providing false or misleading information in connection with the administration of a sanction law. Subclause 17(1) creates the offence of providing false or misleading information or a document to a Commonwealth entity. Subclause 17(2) creates the offence of providing false or misleading information to another person, where the first person is reckless as to whether the second person will provide that information to a Commonwealth entity. In both cases, the information or document must be misleading in a material particular.

3.97 As the provision is silent about the fault elements applicable to the physical elements of the offences, the Criminal Code implies that a person must intentionally provide the information to the Commonwealth (or a third person in the case of subclause 17(2)), in connection with the administration of a sanctions law, and must be reckless as to whether the information or document was false or misleading.

3.98 The QLS identified various concerns with Clause 17, namely:

" that the requirement in subclauses 17(1) and 17(2) that information is

provided in connection with the administration of a sanction law is inconsistent with the purpose of the bill, to 'facilitate the collection, flow and use of information relevant to the administration of autonomous sanctions *;

" a perceived absence of mens rea (fault) in subclauses 17(1) and 17(2); and

" that the 'reckless giving' of information or documents in subclause 17(2) should not be a criminal offence.

3.99 The QLS proposed the following amendments:

" amending subclauses 17(1) and 17(2) to require a person to know that the information or document he or she provided was false or misleading;

" amending subclauses 17(1) and 17(2) to require the information or document provided to be directly relevant to the administration of a sanction law, rather than provided in connection with a sanction law; and

" removing the element of recklessness from subclause 17(2).76

76 Queensland Law Society, Submission 2, pp. 3-4.

Committee view

3.100 The committee supports the policy underlying Clause 17 and the drafting of the provision. To ensure effective compliance monitoring, the committee considers it appropriate to criminalise the provision of false or misleading information or documents in connection with the administration of a sanction law (rather than the narrower requirement of direct relevance). The committee further supports the fault element of recklessly providing documents or information that may be false or misleading (as opposed to the narrower requirement of knowingly providing false or misleading documents or infonnation).

3.101 The committee considers that a direct relevance requirement would not offer an adequate incentive for persons to provide infonnation or documents to the Commonwealth in order to monitor compliance. It may enable persons who deliberately provided false or misleading information or documents to avoid criminal liability simply due to the degree to which the document or information was connected with the administration of a sanction law. Similarly, a requirement that a person must know that the document or information was false or misleading would inappropriately remove criminal liability from persons who are aware of a substantial risk that the document or infonnation may be false or misleading, but nevertheless took the unjustifiable risk of providing it to the Commonwealth.

3.102 Given the importance of enforcement mechanisms to the effectiveness of autonomous sanctions, and thus Australia's international trading reputation, the committee considers that it is appropriate to require a high standard of conduct. It is satisfied that the offences proposed in Clause 17 are proportionate to the interests sought to be protected.

3.103 Given the uncertainty apparent in submissions about the application of fault elements, the Committee sees benefit in including in the bill or the EM a statement of the fault elements applicable to each of the physical elements of the offence. This measure could aid compliance by drawing attention to the standard of conduct required.

Recommendation 7

Undefined terms

3.105 In its submission, the QLS identified two undefined terms in the bill, which it considered would benefit from definition for the avoidance of doubt. These terms are:

" the 'administration' of an autonomous sanctions regime, for the puiposes of the offence of providing false or misleading information in Clause 17; and

" an 'SES employee' for the purposes of delegating the powers and functions of a CEO of a designated Commonwealth entity in Clause 27.77

3.106 The QLS suggested that 'administration' be defined inclusively, to provide guidance to the legal profession and the public.

Committee view

3.107 Given the criminal consequences of contravening sanction laws, and the importance of limiting and identifying precisely the persons to whom legislative power is delegated,78 the committee considers that these terms would benefit from definition to provide certainty. The committee notes that the term 'SES employee' is defined in the Public Service Act 1999, by reference to the Public Service

Classification Rules.

Recommendation 8

3.108 The committee recommends that the government consider including in the bill:

" an inclusive definition of the *administration' of an autonomous sanctions regime for the purposes of Clause 17; and

" a definition of an SES employee, by reference to the Public Service Act 1999, for the purpose of Clause 27.

Use immunity

3.109 Clause 22 abrogates an individual's privilege against self-incrimination, in relation to the provision of documents or information to the Commonwealth pursuant to a notice issued under Clause 19.79 Subclause 22(2) grants a 'use immunity' to such

individuals, in that 'information given' and 'the giving of a document' cannot be used in subsequent proceedings against them (other than proceedings for offences against Clauses 17 and 21).80

3.110 The Scrutiny of Bills Committee identified Clause 22 as potentially trespassing unduly on personal rights and liberties. It noted that the EM did not justify the abrogation of the privilege, or provide reasons as to why the provision did not also

77 Queensland Law Society, Submission 2, p. 3.

78 Australian Government Department of the Prime Minister and Cabinet, Legislation Handbook (2000), paragraph [6.38],

79 Clause 19 invests the CEO of a designated Commonwealth entity with power to serve on a person a notice to provide certain information or documents, for the purpose of assessing compliance with a sanction law.

80 Clause 17 creates offences for the provision of false or misleading information in connection with the administration of a sanction law. Clause 21 creates an offence for non-compliance with a notice issued under Clause 19.

include a 'derivative use' immunity. (That is, a prohibition on the indirect use of information provided by an individual to gather other, admissible evidence against him or her.)81

3.111 The Minister advised that Clause 22 corresponds to a provision in the UN Charter Act, which implements Recommendation 3 of the Cole Inquiry in relation to conferring investigatory powers on Commonwealth agencies to monitor compliance with sanctions. The Minister stated that:

given the correspondence between autonomous and [UN sanctions], it is appropriate that the same authority exists to enable sanctions enforcement agencies to monitor compliance with both [UN sanctions] and autonomous sanctions.82

3.112 The QLS stated that it did not support Clause 22 for two reasons. First, it submitted that a 'blanket abrogation of the privilege' is not 'essential in achieving the objectives of the Federal Government'. It commented that the privilege is necessary to 'maintain a proper balance between the powers of the State and the rights and liberties of citizens', and that it is 'a human right focused on preventing the indignity which occurs in compulsory self-incrimination'. The QLS acknowledged the need to balance individual rights with the effective administration of justice, but submitted that a preferable approach would be a public policy test, placing an onus on the government to prove, in individual cases, that it is in the public interest to override the privilege.

3.113 Secondly, the QLS observed that the immunity does not apply to documents provided pursuant to a Clause 19 notice *only the giving of a document. It submitted that subclause 22(2) should be amended to include the non-admissibility of a document.83

Committee view

3.114 The committee acknowledges that the privilege against self-incrimination is not absolute and must be balanced with the equally important public interest in enforcing sanctions and holding accountable persons who contravene them. The committee notes the finding of the Cole Inquiry that the enforcement of sanctions is critical to the maintenance of Australia's international trading reputation.84

81 Senate Standing Committee for the Scrutiny of Bills, Tenth Report of2010, 24 November 2010, p. 397.

82 ibid, p. 398.

83 Queensland Law Society, Submission 2, pp. 4-5.

84 The Hon Terrence Cole AO RFD QC, Report of the Inquiry * into Certain Australian Companies in Relation to the UN Oil-for-Food Programme, Volume 1 (November 2006), p. 80; recommendation 3.

3.115 The committee is of the view, however, that any derogation from the privilege against self-incrimination, and the absence of derivative use immunity, should be justified in the EM.

3.116 The committee further considers that the use immunity proposed in subclause 22(2) should extend to documents provided pursuant to a Clause 19 notice, in addition to the giving of the document. It appears to the committee that the exclusion of

documents from the provision would frustrate the immunity. Indeed, the Minister's advice to the Scrutiny of Bills Committee indicates that the omission of 'documents' from subclause 22(2) may be an oversight. The Minister explained the operation of the provision in the following terms:

the information or document is not admissible in evidence against the person who made it available ... (emphasis added).85

Recommendation 9

3.117 The committee recommends that the government amend the Explanatory Memorandum to the bill to set out the reasons for:

" derogating from the privilege against self incrimination in Clause 22; and

" the non-inclusion of derivative use immunity in subclause 22(2).

Recommendation 10

3.118 The committee recommends that the government consider extending the use immunity recognised in subclause 22(2) to documents provided pursuant to a notice issued under Clause 19.

Immunity of Commonwealth officers

3.119 Clause 25 contains an extensive immunity in favour of persons who, in good faith, give, disclose, copy, make records or use information or documents under clauses 18, 19, 23 and 24. The immunity extends to liability to 'any proceedings for contravening any other law because of their conduct' and 'civil proceedings for loss, damage or injury of any kind suffered by another person or entity because of that conduct'. Subclause 25(2) provides that the immunity does not prevent the person

from 'being liable to a proceeding for the conduct of the person that is revealed by the information or the document'.

3.120 Three issues arise in respect of this provision. First, the QLS submitted that:

[Subjclause 25(2), as it relates to information and documents under Clause 19, appears to contradict the protection provided by [sub]clause 22(2). In our view, we consider that the interplay between Clauses 19, 22 and 25 needs to be revisited.

85 Senate Standing Committee for the Scrutiny of Bills, Tenth Report of2010, 24 November 2010, p. 398.

3.121 Secondly, the immunity appears to apply exclusively to Commonwealth officers performing functions under Clauses 18, 23 and 24, and persons providing documents or information pursuant to notices issued under Clause 19. It does not extend to whistleblowers who disclose information or documents to the Commonwealth *including persons from private or non-government entities who may disclose such information. This issue was raised in the context of the 2007 amendments to the UN Charter Act. In a submission to the Legal and Constitutional Affairs Committee, Transparency International Australia suggested amending the provision to include such whistleblowers. The Committee noted, but did not express an opinion on, this matter and the proposed amendment was not incorporated.86 The bills digest to the amending legislation noted that such an approach would accord with reforms to UN practices and the former Secretary-General's calls for member states to replicate them.87

3.122 Thirdly, the need for a wholesale immunity is not justified in the EM. The committee notes the availability of various immunities and exceptions in other statutory information management schemes. For example, the Privacy Act makes provision for the collection, use and disclosure of information other than in accordance with the Information Privacy Principles, where required or authorised by law, or for law enforcement purposes. Similar provisions exist in other statutes, including secrecy legislation.88 There is also a defence of 'lawful authority' in section 10.5 of the Criminal Code, removing criminal responsibility for conduct that is 'justified or excused by or under a law'.

Committee view

3.123 Turning first to the issue raised by the QLS, the committee is of the view that the relationship between Clauses 19, 22 and 25 is satisfactory. On the committee's reading, the effect of subclause 25(2) is that subclause 25(1) provides an immunity

only in respect of the performance of functions under Clauses 18, 19, 23 and 24. Persons performing functions under these provisions remain liable for their conduct undertaken outside of or separately to these provisions, but which may be recorded in documents or information provided under Part 4 of the bill.

3.124 The committee is satisfied that there is no conflict between subclauses 22(2) and 25(2) because subclause 22(2) is limited to use immunity rather than derivative use immunity. This means that the conduct revealed in the information or document

86 Senate Standing Committee on Legal and Constitutional Affairs, Report on the International Trade Integrity * Bill 2007 (August 2007), paragraph [3.13], citing the submission of Transparency International Australia.

87 Juli Tomaras, Parliamentary Library, Parliament of Australia, Bills Digest: International Trade Integrity Bill 2007, No 12 2007-08 (3 August 2007), pp 21-22.

88 See, eg, Public Service Regulations 1999 (Cth) reg 2.1(5). For a comprehensive survey of similar provisions in secrecy laws, see Australian Law Reform Commission, Secrecy Laws and Open Government in Australia, ALRC Report 112 (2010), paragraphs [3.73]-[3.89],

provided, used or disclosed in accordance with Clauses 18, 19, 23 and 24 can be used to gather admissible evidence to support criminal charges in respect of that conduct.

3.125 On the second issue of whistleblower immunity, the committee considers that this matter is more appropriately addressed in the broader context of public interest disclosure policy and legislation.

3.126 On the third issue of the scope of the proposed immunity, the committee notes that the EM does not address the reasons for the inclusion, or the scope, of the immunity in Clause 25. Given that such immunities are a departure from the

fundamental principle of equality before the law, the committee considers that it is appropriate to explain in the EM why Clause 25 is necessary and proportionate to the interests sought to be protected.

Recommendation 11

3.127 The committee recommends that the government amend the Explanatory Memorandum to the bill to explain the reasons for the immunity contained in Clause 25.

The Explanatory Memorandum

3.128 A further issue *arising substantially from the reliance on provisions of the UN Charter Act *is the lack of information provided in the current EM.

3.129 The committee notes that the EM to the International Trade Integrity Bill 2007 *which contained the relevant amendments to the UN Charter Act *was comprehensive, especially in providing reasons for provisions on strict liability and delegations of legislative power (including incorporation by reference).89 The

Scrutiny of Bills Committee referred to the reasoning in that EM in its report on the International Trade Integrity Bill, and consequently made no further comment on several provisions.90

3.130 In contrast, as identified by the Scrutiny of Bills Committee, the EM accompanying the Autonomous Sanctions Bill provides limited or no explanations for a number of provisions pertaining to core principles governing the scrutiny of bills. These provisions, and the relevant scrutiny of bills issues, are:

" subclause 10(3) *delegation of legislative power (incorporation by

reference);91

" Clause 12 *delegation of legislative power (Henry VIII clause);

89 Explanatory Memorandum, International Trade Integrity Bill 2007, pp. 4-7.

90 Senate Standing Committee for the Scrutiny of Bills, Alert Digest No 7 of2007 (20 June 2007) pp. 7-8; Senate Standing Committee for the Scrutiny of Bills, Eighth Report of2007 (8 August 2007) pp. 294-298.

91 See recommendation 2 of this report.

" Clause 13 *delegation of legislative power (overriding the doctrine of implied legislative repeal);

" subclause 14(5) *curtailment of personal rights and liberties (waiver of undertakings as to damages in applications for interim injunctions);92

" Clause 16 *curtailment of personal rights and liberties (notification procedures for the designation of'sanctions laws');93

" Clause 22 *curtailment of personal rights and liberties (abrogation of privilege against self-incrimination);94 95 and

" subclause 24(2) *delegation of legislative power (disclosure of information to persons specified by legislative instrument).

3.131 The committee notes the direction in the Legislation Handbook , prepared by the Department of Prime Minister and Cabinet, that:

... where a measure in a bill is likely to be the subject of comment by the Senate Standing Committee for the Scrutiny of Bills, the reasons for proceeding in the manner proposed in the bill should be explained in the explanatory memorandum.,5

3.132 In 2006, the committee commented that EMs should 'provide members of parliament with the information necessaiy to be able to make informed decisions about the legislation before them'.96

Committee view

3.133 The committee notes that the EM, while explaining the effect of provisions in the bill, did not explain the reasons for including the provisions identified above. Accordingly, in addition to the matters identified in recommendations 2, 3, 4, 5, 7, 9 and 11 of this report, the committee considers that the reasons for these provisions

should be included in the EM.

92 See recommendation 3 of this report.

93 See recommendation 5 of this report.

94 See recommendation 9 of this report.

95 Australian Government Department of the Prime Minister and Cabinet, Legislation Handbook (2000), paragraph [8.19], See further, Senate Standing Committee for the Scrutiny of Bills, Third Report of2004: The Quality of Explanatory Memoranda Accompanying Bills, 24 March 2004, Chapters 3 and 4.

96 Senate Foreign Affairs, Defence and Trade Legislation Committee, Export Finance and Insurance Coiporation Amendment Bill 2006, September 2006, paragraphs [3.4]-[3.11], Recommendation 1.

Recommendation 12

3.134 The committee recommends that the government amend the Explanatory Memorandum to the bill to set out the reasons for including the following clauses:

" subclause 10(3);

" Clause 12;

" Clause 13;

" subclause 14(5);

" Clause 16;

" Clause 22; and

" subclause 24(2).

Domestic privacy implications of Part 4

3.135 In debate, the Deputy Leader of the Opposition and Shadow Minister for Foreign Affairs, the Hon Julie Bishop MP, expressed concern about the domestic privacy implications of the bill, arising from Part 4. The opposition called on the

government to elaborate on this aspect of the bill.97

3.136 Part 4 sets out an information management scheme, to enable a whole-of-govemment approach to monitoring and ensuring compliance with autonomous sanctions. Key provisions are:

" Clause 19 (supported by Clauses 20-23),98 which invests the CEO of a

designated Commonwealth entity (as identified by regulation) with coercive powers to require persons or entities to provide information or documents for the purpose of determining compliance with sanction laws; and

" Clauses 18 and 24, which permit:

" the CEO of a designated Commonwealth entity to request information from a CEO of another Commonwealth entity to provide information or documents for a purpose directly related to the administration of a sanction law;99

97 The Hon Julie Bishop MP, Deputy Leader of the Opposition, Shadow Minister for Foreign Affairs, House of Representatives Hansard, 26 October 2010, p. 1665. See further. Senate Selection of Bills Committee, Report No 11 of2010, 30 September 2010, paragraph 2(c) and Appendix 3.

98 Clauses 20-23 provide for, respectively: the provision of information to the Commonwealth on oath; criminal offences for failure to comply with a request for information; abrogation of the privilege against self-incrimination; and the copying and return of documents provided in accordance with a request for documents.

99 Clause 18.

&f the disclosure and use of information and documents within a designated Commonwealth entity for a purpose connected with the administration of a sanction law;100 and

" the disclosure of information or documents by a designated

Commonwealth entity to persons and entities specified in subclause 24(2), or others who are prescribed by legislative instrument, for a purpose connected with the administration of a sanction law. The provision is subject to a requirement that the CEO of the designated Commonwealth entity must be satisfied that the recipient will not disclose the information to anyone else without consent.101

3.137 In its submission, DFAT stated that the measures contained in Part 4 accord with the Information Privacy Principles (IPPs)102 because they do not pemiit:

" record keepers to disclose personal information, other than as authorised under the measures in Part 4; or

" persons, bodies or agencies to whom personal information is disclosed under Part 4 to use or disclose that information other than for purposes connected with the administration of sanction laws.103

3.138 DFAT submitted that this is consistent with IPP 11, governing the disclosure of personal information. IPP 11 relevantly provides that:

" a record keeper must not disclose personal information other than as required or authorised by law (ie, as authorised by Part 4 of the bill); and

" those to whom information is disclosed must not use or disclose the

information other than for the purpose for which the information was disclosed to them (ie, purposes connected with the administration of sanction laws).104

3.139 DFAT explained that Clause 19 limits the collection of information to the purpose of determining compliance with a sanction law. It stated that Clause 18 would allow a designated Commonwealth entity access to information held by other Commonwealth agencies only for a puipose directly related to the administration of a

100 Subclause 24(1).

101 Subclauses 24(2)(a)-(f). 24(3), 24(4).

102 The IPPs are contained in section 14 of the Privacy Act 1988 and impose requirements on Commonwealth agencies in relation to the collection, solicitation, storage, access, alteration, use and disclosure of personal information. Personal information is defined in section 6 as information or an opinion about an individual whose identity is apparent, or can reasonably be ascertained, from the information or opinion.

103 DFAT, Submission 3, pp. 6-7.

104 IPP 11, paragraphs (l)(d) and (3).

sanction law. Clause 24 would then limit the authority of the designated Commonwealth agency to share that information:

" within the entity or with specified external entities to purposes connected with the administration of sanction laws; and

" with external entities to cases where the CEO of the designated

Commonwealth authority is satisfied that the recipient of the information will not disclose the information to anyone else without the CEO's consent.105

3.140 DFAT further advised that:

These measures are based on Part 5 (and section 2A) of the Charter o f the United Nations Act 1945, which implemented Recommendation 3 of the Cole Inquiry. Recommendation 3 called for an appropriate body to be given a power to obtain evidence and information of any suspected breaches or evasion of sanctions that might constitute the commission of an offence against a law of the Commonwealth.106

Committee view

3.141 The committee is satisfied that the bill is compliant with the Privacy Act. In considering the provisions in Part 4, the committee has given weight to the advice of DFAT and the statements of the Minister. The committee further notes that the legislative policy approval process prescribed in the Legislation Handbook requires consultation with the Office of the Privacy Commissioner where the proposed legislation has implications for the privacy of individuals.107

3.142 The committee notes the importance of monitoring compliance with sanctions, as identified in the recommendations of the Cole Inquiry. It considers that these information-sharing arrangements are necessary to facilitate a coordinated, whole-of-govemment approach to the administration of sanctions.

Conclusion

3.143 The committee supports the policy underlying the bill. The creation of a framework for the administration of autonomous sanctions will address shortcomings in the existing scheme of ad hoc regulations. In doing so, the proposed legislation will enhance Australia *s capacity to respond to, and contribute to the resolution of, situations of international concern. Similarly, the effective administration of sanctions *both autonomous and UN-mandated *is integral to the maintenance of Australia's international trading reputation.

105 DFAT, Submission 3, pp. 6-7.

106 ibid, p. 6. See further, DFAT, Submission 3A.

107 Australian Government Department of the Prime Minister and Cabinet, Legislation Handbook (2000), paragraph [4.7(h)(vi)].

3.144 As outlined in this report, however, the committee has identified issues in relation to procedural safeguards in some provisions of the bill. The committee further considers that the bill could be strengthened through giving consideration to the

drafting matters identified in this report, and including in the EM statements of reasons for including the provisions identified in this report.

3.145 The committee notes that the effectiveness of targeted sanctions depends, in a large part, on the perceived credibility of the mechanisms and processes through which they are implemented.108 In making recommendations on these matters, it is the committee's intention to help enable the proposed legislation to operate more effectively.

Recommendation 13

3.146 The committee recommends that, subject to consideration of recommendations 1-12 of this report, the Senate pass the bill.

SENATOR MARK BISHOP CHAIR

108 As noted by Gary Quinlan, Ambassador and Permanent Representative of Australia to the United Nations Security Council in his Statement to the United Nations Security Council Regarding the Promotion and Strengthening of the Rule of Law in the Maintenance of International Peace and Security, S/PV6347 (Resumption 1), 29 June 2010, p. 8.

Appendix 1

Public submissions

1 Reserve Bank of Australia

2 Queensland Law Society

2A Queensland Law Society

3 Department of Foreign Affairs and Trade

3 A Department of Foreign Affairs and Trade

4 Department of Defence

5 Financial Services Council Ltd

6 The Group of Eight Ltd

The Senate

Foreign Affairs, Defence and Trade Legislation Committee

Criminal Code Amendment (Cluster Munitions

Prohibition) Bill 2010 [Provisions]

March 2011

Â© Commonwealth of Australia 2011

ISBN 978-1-74229-410-0

Printed by the Senate Printing Unit, Parliament House, Canberra.

Members of the committee Core members

Senator Mark Bishop, ALP, WA (Chair) Senator Russell Trood, LP, QLD (Deputy Chair) Senator Michael Forshaw, ALP, NSW Senator Steve Hutchins, ALP, NSW Senator Helen Kroger, LP, VIC Senator Scott Ludlam, AG, WA

Secretariat

Dr Kathleen Dennody, Committee Secretary Ms Jane Thomson, Principal Research Officer Ms Angela Lancsar, Administrative Officer

Senate Foreign Affairs, Defence and Trade Committee Department of the Senate PO Box 6100 Parliament House Canberra ACT 2600 Australia

Phone: +61 2 6277 3535 Fax: +61 2 6277 5818

Email: fadt.sen@aph.gov.au Internet: www.aph.gov,au/Senate/committee/fadt_ctte/index.htm

Table of contents

Members of the committee.............................................................................................iii

CHAPTER 1

INTRODUCTION......................................................................................................1

Referral of inquiry....................................................................................................1

Purpose of the bill.....................................................................................................1

Definitions................................................................................................................2

Convention on Cluster Munitions and Australia's role...........................................3

Previous parliamentary inquiries......................................................................... 5

Selection of Bills Committee...................................................................................7

Submissions..............................................................................................................7

Acknowledgements................................................................................................. 7

CHAPTER 2

THE USE AND LEGACY OF CLUSTER MUNITIONS WORLDWIDE ....... 9

Use of cluster munitions in warfare.........................................................................9

Legacy of cluster munitions .................................................................................. 10

Cluster munition stockpiles worldwide.................................................................11

Australia and cluster munitions ............................................................................. 12

CHAPTER 3

PENALTIES AND THE RETENTION OF CLUSTER MUNITIONS ............ 13

Views on the bill.....................................................................................................13

New offences..........................................................................................................13

Language - 'never under any circumstances'........................................................15

Adequacy of the penalties......................................................................................17

Intent requirement..................................................................................................18

Section 72.39..........................................................................................................19

Evidence.................................................................................................................20

The government's position.....................................................................................22

Committee view.....................................................................................................23

CHAPTER 4

INTEROPERABILITY........................................................................................... 25

Section 72.41...........................................................................................................25

Negotiating Article 21............................................................................................ 26

Interpreting Article 21............................................................................................28

Joint Standing Committee on Treaties and Government response ...................... 29

Evidence..................................................................................................................30

The government's position......................................................................................34

Article 21 positive obligations................................................................................38

The government's position on positive obligations........................................ 40

Committee view...................................................................................................... 42

CHAPTER 5

TRANSIT, RETENTION AND STOCKPILING OF CLUSTER MUNITIONS

ON AUSTRALIAN TERRITORY BY NON-STATES PARTIES .................... 45

Interpreting the Convention....................................................................................45

Section 72.42...........................................................................................................46

Evidence..................................................................................................................47

The government's position......................................................................................48

Committee view.......................................................................................................51

CHAPTER 6

INVESTMENT IN CLUSTER MUNITIONS PRODUCTION..........................53

Provisions of the bill................................................................................................53

Interpreting the Convention....................................................................................53

Joint Standing Committee on Treaties and Government response ...................... 55

Evidence..................................................................................................................56

The government's position......................................................................................59

Committee view.......................................................................................................60

Committee conclusion............................................................................................ 60

DISSENTING REPORT

BY SENATOR SCOTT LUDLAM, THE AUSTRALIAN GREENS ............... 63

vi 56

APPENDIX 1

PUBLIC SUBMISSIONS, FORM LETTER AND ADDITIONAL INFORMATION....................................................................................................67

APPENDIX 2

PUBLIC HEARING AND WITNESSES ............................................................ 69

Vll 57

Chapter 1

Introduction

Referral of inquiry

1.1 On 28 October 2010 the Senate referred provisions of the Criminal Code Amendment (Cluster Munitions Prohibition) Bill 2010 to the Senate Foreign Affairs, Defence and Trade Legislation Committee for inquiry and report by 24 March 2011.

Purpose of the bill

1.2 The purpose of the bill is to introduce legislative measures to ensure consistency between Australian law and the Convention on Cluster Munitions (the Convention). Its enactment coupled with other non-legislative measures will place Australia in a position to ratify the Convention.1

1.3 The Convention bans the use, stockpiling, acquisition and transfer of cluster munitions by states parties. It aims to assist the victims of cluster munitions and includes provisions on the clearance of cluster munitions from areas of former conflict. Article 9 requires states parties to enact legislation to criminalise any activity prohibited under the Convention. In keeping with this undertaking, the Australian Government intends to amend the Criminal Code Act 1995 (the Code) to create offences and penalties in relation to cluster munitions and explosive bomblets. The proposed legislation would also provide defences for certain circumstances and for certain authorisation to be made. These legislative measures will enable Australia to ratify the Convention.

1.4 The bill inserts a new Subdivision C in Division 72 of the Code. The heading of proposed Subdivision C is 'Cluster munitions and explosive bomblets'. The bill proposes to insert new offences and other provisions into Division 72 relating to the use, development, production, acquisition, stockpiling, retention or transfer of cluster munitions. The Subdivision will apply in relation to explosive bomblets in the same way that it does to cluster munitions.2

1.5 The bill contains two main features:

" offences relating to the use, development, production, acquisition, stockpiling, retention and transfer of cluster munitions;

1 As with any international treaty, legislation must be first enacted before Australia can ratify the treaty body. Explanatory Memorandum, Criminal Code Amendment (Cluster Munitions Prohibition) Bill 2010, p. 1.

2 Explanatory Memorandum, Criminal Code Amendment (Cluster Munitions Prohibition) Bill 2010, p. 6.

" defences to these offences that reflect a range of conduct that is permitted by the Convention to enable Australia to maintain and develop its skill and capabilities in detecting and destroying cluster munitions and to maintain cooperative military relationships with countries that are not party to the Convention.

Definitions

1.6 The bill uses the Convention's definition of'cluster munition' which is:

...a conventional munition that is designed to disperse or release explosive submunitions each weighing less than 20 kilograms, and includes those explosive submunitions. It does not mean the following:

(a) A munition or submunitions designed to dispense flares, smoke, pyrotechnics or chaff; or a munition designed exclusively for an air defence role;

(b) A munition or submunitions designed to produce electrical or electronic effects;

(c) A munition that, in order to avoid indiscriminate area effects and the risks posed by unexploded submunitions, has all of the following characteristics:

(i) Each munition contains fewer than ten explosive submunitions;

(ii) Each explosive submunitions weighs more than four kilograms;

(iii) Each explosive submunitions is designed to detect and engage a single target object;

(iv) Each explosive submunitions is equipped with an electronic selfâ destruction mechanism;

(v) Each explosive submunitions is equipped with an electronic selfâ deactivating feature.1

1.7 An 'explosive bomblet' is determined in the bill to have the same meaning as that articulated in Article 2(13) of the Convention.3 4 Similarly, an explosive submunitions for the purposes of the bill has the same meaning as that provided in Article 2(3) of the Convention.

1.8 The committee notes that the explanatory memorandum contains errors where it describes a 'cluster munition'. It gives reference to paragraph 2 of Article 21 of the Convention rather than Article 2 concerning definitions. This mistake is repeated twice on page 17 of the explanatory memorandum.

3 Convention on Cluster Munitions, Article 2(2).

4 That is 'a conventional munition, weighing less than 20 kilograms, which is not self-propelled and which, in order to perform its task, is dispersed or released by a dispenser, and is designed to function by detonating an explosive charge prior to, on or after impact' (Convention on Cluster Munitions, Article 2(13)).

Convention on Cluster Munitions and Australia *s role

1.9 Concerns within the international community regarding the unintended impact of cluster munitions were raised in the 1970s primarily in the context of the conflicts of Southeast Asia. However, negotiations towards a treaty on cluster munitions only began officially in February 2007 when the Oslo Process was launched. Discussions, which had been on identifying technical solutions to improve submunitions reliability, shifted towards striving for a total ban on cluster munitions that cause unacceptable hann to civilians.5

1.10 The Convention on Cluster Munitions was adopted in Dublin on 30 May 2008 and entered into force on 1 August 2010. Norway was the first country to sign the Convention and both Lebanon and Laos, two countries which experienced the effects of cluster munitions, followed quickly.6 Australia signed the Convention at Oslo on 3 December 2008.7 8 The UN Secretary-General, Ban Ki-moon stated the following in relation to the treaty when it entered into force:

This new instrument is a major advance for the global disarmament and humanitarian agendas, and will help us to counter the widespread insecurity and suffering caused by these terrible weapons, particularly among civilians and children.s

1.11 The Convention seeks to prevent future civilian harm caused by cluster munitions by establishing absolute prohibitions on a number of activities involving cluster munitions. It serves as a legally binding instrument to prohibit the use, production, transfer and stockpiling of cluster munitions. It also establishes a

framework for cooperation and assistance to ensure the adequate provision of care and rehabilitation of victims and, amongst other things, the destruction of cluster munition stockpiles. Indeed, according to the preamble, the Convention strives to 'put an end for all time to the suffering and casualties caused by cluster munitions at the time of their use, when they fail to function as intended or when they are abandoned'.9 For their part, states parties to the Convention are required to interpret their obligations in a manner which is consistent with the object and purpose of the Convention.

5 Gugu Dube, Negotiating The Convention on Cluster Munitions, ISS Paper 187, July 2009, http://www.armsnetafnca.org/content/iss-paper-l 87-negotiating-convention-cluster-muriitions- gugu-dube-iuly-2009 (accessed 15 December 2010).

6 Laos is recognised by the UN to be the most heavily bombed country in history on a per capita basis. UN Backs Vientiane Declaration on Cluster Munitions, Media Release, 12 November 2010, http://www.mineaction.org/doc.asp7dM532 (accessed 29 November 2010).

7 United Nations Treaty Collection, Convention on Cluster Munitions, Status as at 07-03-2011, http://treaties.un.org/pages/ViewDetails.aspx?src=TREATY&mtdsg no=XXVI- 6&chapter=26&lang=en (accessed 8 March 2011).

8 Statement by UN Secretary-General Ban Ki-moon on the entry-into-force of the Convention on Cluster Munitions, 30 July 2010, Electronic Mine Information Network, http://www.mineaclion.org/overview.asp7oM722 (accessed 29 November 2010).

9 Convention on Cluster Munitions, preamble, paragraph 2.

1.12 Australia played an active role in negotiating the Convention throughout the Oslo Process. The joint government submission highlighted that Australia 'has worked closely with international partners to achieve the strongest possible ban on these weapons'.10 Australia also played a lead role in the preparations for the First Meeting of States Parties to the Convention held in Vientiane, Laos, in November 2010. The National Interest Analysis noted the following in relation to Australia's role in the Oslo Process:

Australia advocated the need to strike a balance between addressing the impact of cluster munitions that cause unacceptable humanitarian harm and legitimate military needs, supported a pragmatic approach to clearance

responsibilities and helped to ensure that there were comprehensive and meaningful victim assistance and rehabilitation provisions.11

1.13 Australia has a long history of involvement in mine action activities. According to AusAID, Australia has contributed over $175 million since 1997 towards global efforts to reduce the threat and impact of landmines and other explosive ordnance including cluster munitions. Through its aid program, Australia is recognised as a 'leading contributor to international mine clearance efforts, victim assistance, mine risk education and integrated mine action programs'.12 This contribution was recognised by witnesses to this inquiry.13 Under the new Mine Action Strategy for the Australian aid program 2010-2014, Australia has pledged

$100 million to work towards a 'world free from landmines, cluster munitions and other explosive remnants of war over the next five years'.14 In the second reading speech, the Attorney-General, the Hon Robert McClelland MP, recognised that this contribution will 'help reduce the deaths and injuries from these devices and improve the quality of life for victims, their adversely affected families and, indeed, entire communities'.15

10 Attorney-General, Minister for Foreign Affairs, Minister for Defence, Submission 24, p. 1.

11 National Interest Analysis, para 5. The National Interest Analysis which sets out the benefits for Australia in ratifying the Convention, and Australia's responsibility under the Convention, was tabled in Parliament on 12 March 2009.

12 AusAID, Australia's aid program, Mine action, http://www.ausaid.gov.au/human/landmines.cfm (accessed 11 February 2011).

13 See for example, International Committee of the Red Cross, Submission 9, p. 1.

14 AusAID, Australia's aid program, Mine action, http://www.ausaid.gov.au/human/landmines.cfm (accessed 11 February 2011).

15 The Hon Robert McClelland MP, Attorney-General, Second Reading Speech, House Hansard, 27 October 2010, p. 10.

1.14 The First Meeting of states parties took place in November 2010 in Lao PDR, the most heavily bombed country per capita in the world.16

1.15 To date, 52 states have ratified the Convention including France, Gennany, Ireland, Lebanon, New Zealand, Spain, and the UK whilst there are 108 signatories.17

1.16 Countries that have not agreed to the treaty include the United States (US), China, Russia, Israel, Brazil, India and Pakistan. They are recognised as amongst the major producers of cluster munitions and their components worldwide.18

Previous parliamentary inquiries

Senate Standing Committee on Foreign Affairs , Defence and Trade

1.17 On 31 May 2007, the Senate Standing Committee on Foreign Affairs, Defence and Trade completed an inquiry into a private senator's bill *the Cluster Munitions (Prohibition) Bill 2006. The effect of the bill was to ban Australia's involvement in cluster munitions. The bill was specifically intended to prevent members of the Australian Defence Force (ADF), whether serving in Australia or

elsewhere, and whether serving with the ADF or any other defence force, from being involved in the deployment of cluster munitions.19

1.18 The committee was of the view that the bill in its then current form and without substantial redrafting was not the most appropriate means to address the problems created by the use of cluster munitions. Whilst recommending that the bill not be passed, the committee encouraged the government to consider foreign

legislation 'that has been enacted or is currently before foreign parliaments that relates

16 From 1964 to 1973, over two million tons of ordnance, including 270 million cluster submunitions was dropped on Laos with a failure rate of up to 30 per cent, leaving approximately 25 per cent of villages across the country contaminated with unexploded ordnance. National Regulatory Authority for UXO/Mine Action in the Lao PDR, 77;e

Unexploded Ordnance (UXO) Problem and Operational Progress in the Lao PDR, Official Figures, 2 June 2010, http://www.clusterconvention.org/lmsp/wp- content/uploads/2010/08/The-UXO-PiObl em-in-the-Lao-PDR-Official-Statistics-fmal.pdf (accessed 15 December 2010).

17 United Nations Treaty Collection, Convention on Cluster Munitions, Status as at 07-03-2011, http://treaties.un.org/pages/ViewDetails.aspx?src=TREATY&mtdsg no=XXVI- 6&chapter=26&lang=en (accessed 8 March 2011).

18 Human Rights Watch, Meeting the Challenge, Protecting Civilians through the Convention on Cluster Munitions, Section III - Production, Transfer, and Stockpiling, 22 November 2010, http://www.hrw.Org/en/node/94330/section/7 (accessed 8 December 2010).

19 Senate Foreign Affairs, Defence and Trade Legislation Committee, Cluster Munitions (Prohibition) Bill 2006, May 2007, p. xi.

to the use of cluster munitions with a view to introducing similar legislation that would be relevant to Australia's circumstances'.20

Joint Standing Committee on Treaties

1.19 In March 2009, Australia tabled a National Interest Analysis in Parliament which provided an overview of the potential benefits and obligations arising out of ratification of the Convention. In June the same year, the Joint Standing Committee on Treaties (JSCOT) conducted an inquiry into the Convention with a view to Australia becoming a party to it. JSCOT took the view that ratification of the Convention would 'reaffirm Australia's commitment to limiting the impact of armed conflict on civilian populations'. It noted further that ratification 'will significantly improve the lives of people affected by cluster munitions' whilst enabling Australia to continue to

cooperate military with its allies.21 However, JSCOT was particularly concerned that Article 21 of the Convention 'may permit Australian personnel to assist or participate in the use of cluster munitions'.22 It noted that Australia could 'inadvertently participate in the use or assist in the use of cluster munitions'. Furthermore, that the

lack of clarity in relation to some Convention terms 'may provide an avenue by which Australia could participate in actions which may contravene the humanitarian aims of the Convention'.23

1.20 Whilst recommending ratification of the Convention, JSCOT also recommended that the Australian Government and ADF have regard to a number of issues when developing policies under which ADF personnel would operate, namely:

" the definition of the terms 'use', 'retain', 'assist', 'encourage' and 'induce' as they apply in Articles 1, 2 and 21 of the Convention on Cluster Munitions;

" preventing inadvertent participation in the use, or assistance in the use, of cluster munitions by Australia; and

" preventing investment by Australian entities in the development or production of cluster munitions, either directly, or through the provision of funds to companies that may develop or produce cluster munitions.24

20 Senate Foreign Affairs, Defence and Trade Legislation Committee, Cluster Munitions (Prohibition) Bill 2006, May 2007, pp. ix-x.

21 Joint Standing Committee on Treaties, Report No 103, Treaties tabled on 12 March and 13 May 2009, 18 August 2009, p. 26.

22 Joint Standing Committee on Treaties, Report No 103, Treaties tabled on 12 March and 13 May 2009, 18 August 2009, p. 20.

23 Joint Standing Committee on Treaties, Repoi-t No 103, Treaties tabled on 12 March and 13 May 2009, 18 August 2009, p. 27.

24 Joint Standing Committee on Treaties, Report No 103, Treaties tabled on 12 March and 13 May 2009, 18 August 2009, p. 27.

Selection of Bills Committee

1.21 The proposal made to the Senate Standing Committee for the Selection of Bills to refer the bill for inquiry and report suggested that the bill was 'inconsistent with recommendations' made by JSCOT when it reviewed the Convention on Cluster Munitions in the 42nd Parliament.25

Submissions

1.22 The committee advertised the inquiry on its website and in The Australian on 10 and 24 November 2010 and 8 December 2010. The committee wrote to the Minister for Defence, Minister for Foreign Affairs and the Attorney-General respectively. The committee also wrote to respective state and territory governments, inviting them or their departments or related agencies to make a submission. A number of other organisations, commentators, and academics were also contacted and invited to make submissions to the inquiry. The committee received 29 submissions, which are listed at Appendix 1.

Acknowledgements

1.23 The committee thanks those who assisted with the inquiry.

25 Senate Standing Committee for the Selection of Bills, Report No. 13 of 2010, Appendix 1, http://www.aph.s;ov.au/Senate/committee/selectionbills ctte/reports/2010/rep 1310.pdf (accessed 14 February 2011).

Chapter 2

The use and legacy of cluster munitions worldwide

2.1 This chapter provides background information on the use and legacy of cluster munitions worldwide.

Use of cluster munitions in warfare

2.2 Cluster munitions are large weapons which are deployed from the air or the ground and release small submunitions or 'bomblets'. These bomblets have a wide dispersal pattern that results in a wide area of impact. Since World War II, at least 15 countries have used cluster munitions in more than 24 countries.1 According to the United Nations (UN), some 85 countries have stockpiles of cluster munitions containing billions of explosive devices.2 The Convention on Cluster Munitions (the Convention) requires that states parties destroy them.

2.3 In terms of their contemporary use, cluster munitions were most recently used by Russia and Georgia in their 2008 conflict.3 The United States (US) and the United Kingdom (UK) are believed to have used nearly 13,000 cluster munitions containing an estimated 1.8 to 2 million submunitions in three weeks of major combat in Iraq between 2003 and 2006.4 In Afghanistan between 2001 and 2002, the US dropped

1,228 cluster bombs containing 248,056 bomblets. Cluster munitions were also reportedly used by the US, UK and Netherlands in the context of the 1999 Yugoslavia conflict.5

2.4 Since the Convention was opened for signature in December 2008, reports suggest that there has only been one serious allegation of cluster munitions use.

1 UN Backs Vientiane Declaration on Cluster Munitions, UN Electronic Mine Information Network, Press Release, 12 November 2010, http;//www.mineaction.org/doc.asp?d=l 532 (accessed 29 November 2010). However, according to the Cluster Munition Coalition, cluster munitions have been used during armed conflict in 39 countries and disputed territories since the end of WWII and at least 18 government aimed forces have used cluster munitions. (Cluster Munition Coalition, Cluster Munition Monitor 2010, Major Findings, http://www.the- monitor.org/index.php/publications/displav?url=cmm/2010/CMM Major Findings 2010.html. (accessed 15 December 2010).

2 UN Backs Vientiane Declaration on Cluster Munitions, UN Electronic Mine Information Network, Press Release, 12 November 2010, http://www.niineaction.org/doc.asp'?d=I 532 (accessed 29 November 2010).

3 Cluster Munition Coalition, A Histofy of Harm , undated, http://www.stopclustermunitions.org/the-problem/historv-harm/ (accessed 15 December 2010).

4 Cluster Munition Coalition, A timeline of cluster bomb use , undated, http://www.stopclustermunitions.org/the-problem/historv-harm/ (accessed 29 November 2010).

5 Cluster Munition Coalition, A timeline of cluster bomb use, undated, http://www.stopclustermunitions.org/the-problem/historv-harm/ (accessed 29 November 2010).

Amnesty International reported that the US 'appeared to have used at least one cruise missile with submunitions' to attack an alleged al-Qaeda training camp in Yemen in December 2009.6

Legacy of cluster munitions

2.5 In 2006, Handicap International (HI) published the first comprehensive publicly available study on the impact of cluster munitions on civilian populations through casualty data. In its review across 23 contaminated countries and areas, HI compiled evidence of at least 11,044 recorded and confirmed casualties. The organisation found that 98 per cent of recorded cluster submunitions casualties are civilians.

2.6 In terms of the impact and legacy of cluster munitions, the HI report found that:

" In the post-strike and post-conflict period, unexploded submunitions cause a lasting threat as failed submunitions dominate amongst new incidents in postâ conflict situations.7

" Not only are civilians most at risk but the vast majority of civilian casualties occur whilst people carry out daily activities in their usual and accustomed places.

" Males represent 84 per cent of casualties with 40 per cent of them under the age of 18 years. In all contexts, boys constitute the vast majority of child casualties averaging between 85 and 90 per cent.

" The majority of child casualties occur whilst carrying out livelihood activities, mostly tending animals.

" The number of casualties that occur while carrying out livelihood activities demonstrates the direct economic impact on cluster munitions-contaminated communities. In many countries, men are the traditional breadwinners and given that adult males and boys represent the majority of casualties, the

6 Amnesty International cited in Cluster Munition Coalition and International Campaign to Ban Landmines, Cluster Munition Monitor 2010, Major Findings, p. 1, http://www.the- monitor.org/index.php/publications/display?url=cmm/2010/CMM Major Findings 2010.html (accessed 29 November 2010).

7 In parts of Southeast Asia, cluster munitions continue to cause nearly half of the recorded casualties more than three decades after their use. Handicap International, Fatal Footprint: The Global Human Impact of Cluster Munitions, Preliminary Report, November 2006, p. 42, http://www.mineaction.Org/downloads/l/Fatal Footprint HI report on CM casualties. 1 .pdf (accessed 22 December 2010).

'socio-economic loss for both the immediate term and distant future cannot be underestimated'.8

2.7 According to the Cluster Munition Monitor 2010, there were 16,816 cluster munition casualties confirmed globally at the end of 2009. It noted, however, that many casualties have gone unrecorded and estimated that the actual number may be between 58,000 and 85,000 casualties. As previously noted, whilst most cluster munitions are intended to explode on impact, many do not and these explosive remnants continue to maim civilians and impede agricultural development often years after conflicts end. In terms of contamination, at least 23 states and three other areas are believed to be contaminated with cluster munition remnants whilst at least thirteen additional states still may have a small level of contamination from past use of the weapon. The most heavily affected counties include Lao PDR, Vietnam, Iraq and Cambodia. Southeast Asia has the greatest amount of cluster munition contamination of all regions.9

Cluster munition stockpiles worldwide

2.8 According to the Cluster Munition Monitor, in 2010, there were 74 countries with cluster munition stockpiles of which, 27 had signed or ratified the Convention. Of the 27, 17 states have provided information on the size of their stockpile. Collectively, this stockpile amounts to at least 1.1 million cluster munitions with at

least 146 million submunitions.10

2.9 According to Human Rights Watch, of the known quantities of submunitions stockpiled by signatory states, Germany has 50 million submunitions in its stockpiles whilst the United Kingdom has 39 million, the Netherlands 26 million, France 15 million and Belgium 10 million.11 However, the Cluster Munition Monitor reported

that two of the biggest stockpilers, Germany and the UK, have destroyed significant portions of stocks whilst at least eight other countries are in the process of destroying stocks. Four state parties (Belgium, Moldova, Norway and Spain) and two signatories

(Colombia and Portugal) are reported to have destroyed all of their stockpiles,

8 Handicap International, Fatal Footprint: The Global Human Impact of Cluster Munitions, Preliminary Report, November 2006, p. 43, httpV/www.mineaction.org/downloads/l/Fatal Footprint HI report on CM casualties. 1.pdf (accessed 22 December 2010).

9 Cluster Munition Coalition and International Campaign to Ban Landmines, Cluster Munition Monitor 2010, Major Findings, p. 1, http://www.the-monitor.org/index.php/publications/display?url=cmm/2010/CMM Major Findings 2010.html (accessed 29 November 2010).

10 Cluster Munition Coalition and International Campaign to Ban Landmines Cluster Munition Monitor 2010, Major Findings, p. 1, http://www.the-monitor.org/index.php/publications/displav7urUcmm/2010/CMM Major Findings 2010.html (accessed 29 November 2010).

11 Human Rights Watch, Cluster Munition Stockpiles of Signatories to the Convention on Cluster Munitions, Fact Sheet, February 2010, p. 1.

accounting for an estimated 176,000 cluster munitions with more than 13.8 million submunitions. Austria and Montenegro expect to finish stockpile destruction in 2010.12

Australia and cluster munitions

2.10 From the 1970s to the 1990s, Australia manufactured and maintained limited quantities of cluster munitions for testing purposes.13

2.11 Whilst Australia had stockpiles in the past,14 the explanatory memorandum noted that there are no operational stockpiles of cluster munitions now.15

2.12 In evidence to the committee, the Department of Defence (Defence) confirmed that it does not have operational stocks of cluster munitions and that live sub-munitions are not part Defence's operational weapons inventory.16 DFAT has also noted in the past that such munitions 'are not part of Defence's operational weapons

inventory, and are not - in either numbers of configuration - suitable for operational use by the ADF'.17

2.13 In terms of conformity with the treaty, DFAT has argued that Australia already fulfils many of its obligations under the Convention as it does not possess any cluster munitions other than those stocks permitted for training and counter-measure purposes. It further noted that Australia provides a range of assistance to victims through Australian Agency for International Development Mine Action program.18

12 Cluster Munition Coalition and International Campaign to Ban Landmines Cluster Munition Monitor 2010, Major Findings, p. 1. http://www.the-monitor.org/index.php/publications/displav?url=cmm/2010/CMM Major Findings 2010.html (accessed 29 November 2010).

13 Senate Foreign Affairs, Defence and Trade Committee, Cluster Munitions (Prohibition) Bill 2006, p. 4.

14 Human Rights Watch, Cluster Munition Stoclqjiles of Signatories to the Convention on Cluster Munitions, Fact Sheet, February 2010, p. 1.

15 Explanatory Memorandum, Criminal Code Amendment (Cluster Munitions Prohibition) Bill 2010, p. 2.

16 Department of Defence, Additional information, received 2 March 2011, p. 3.

17 Letter from Peter Hooten, Department of Foreign Affairs and Trade, 27 April 2010 cited in Cluster Munition Monitor, Country Profiles - Australia, 20 October 2010, p. 3. http://www.the- monitor.org/custom/index.php/region profiles/print profile/10 (accessed 3 December 2010).

18 Joint Standing Committee on Treaties, Report No 103, Treaties tabled on 12 March and 13 May 2009, 18 August 2009, p. 16.

Chapter 3

Penalties and the retention of cluster munitions

3.1 This chapter provides a short overview of the evidence in relation to the bill before considering its penalties and the section 72.39 defence to provide for the acquisition and retention of cluster munitions for training and related purposes.

Views on the bill

3.2 The bill seeks to create offences relating to cluster munitions and explosive bomblets and give effect to the Convention on Cluster Munitions (the Convention).

3.3 All witnesses to the inquiry strongly supported Australia's ratification of the Convention. While they welcomed the bill's objective of enhancing legislative measures to enable Australia to ratify the Convention, they expressed some concerns about particular provisions.

3.4 Most concern amongst submitters was directed to the issue of interoperability or joint military operations with states not party to the Convention reflected in sections 72.41 and 72.42 of the bill. These provisions are the focus of Chapter 4 and Chapter 5 respectively. Other major concerns were raised in relation to section 72.39 regarding the retention of cluster munitions in Australia which is considered in this chapter. Positive obligations in relation to Article 21 specifically and towards achieving the objectives of the Convention more broadly are considered in Chapter 4 whilst the prohibition on investment in cluster munitions production is the subject of Chapter 6.

New offences

3.5 Item 1 of Schedule 1 of the bill inserts a new Subdivision C titled 'Cluster munitions and explosive bomblets' into Division 72 of the Criminal Code Act 1995 (the Code).1 The purpose of this Subdivision is to create offences relating to cluster munitions and explosive bomblets and to give effect to the Convention on Cluster Munitions.2

3.6 The bill creates two new offences under section 72.38:

(1) A person commits an offence if the person does any of the following with a cluster munition:

(a) uses it;

(b) develops, produces or otherwise acquires it;

Division 72 of the Criminal Code deals with explosives and lethal devices.

Criminal Code Amendment (Cluster Munitions Prohibition) Bill 2010, s. 72.37.

(d) transfers it to anyone.

(2) A person (the first person ) commits an offence if:

(a) the first person assists, encourages, or induces another person to do any of the following acts with a cluster munition:

(i) uses it;

(ii) develop, produce or otherwise acquire it;

(iii) stockpile or retain it;

(iv) transfer it to anyone; and

(b) the other person does the act; and

3.7 The explanatory memorandum highlights that the proposed subsections do not specify a fault element for the prohibited acts. Section 5.6 of the Criminal Code provides that where a fault element is not specified in relation to the physical element, the fault element is intention.3 The explanatory memorandum notes that the elements in 72.38(2)(a) and (b) ensure that accidental or innocent assistance, encouragement or inducement is not an offence against subsection 72.38(2).4

3.8 The government recognises the establishment of offences as meeting the requirements of Article 9 of the Convention on states parties to impose:

penal sanctions to prevent and suppress any activity prohibited to a state party under this Convention undertaken by persons or on territory under its jurisdiction or control.

3.9 The establishment of such offences gives meaning to Article 1 of the

Convention which requires that states parties undertake never under any circumstances to use, develop, produce, acquire, stockpile, retain or transfer 'directly or indirectly, cluster munitions of explosive bomblets or assist, encourage, or induce anyone to engage in any activity prohibited to a State Party under the Convention'.

3.10 Submitters such as Act for Peace supported the establishment of criminal offence provisions in relation to the use of cluster munitions and held that the penalties reflect the seriousness of the crimes.5

_14_________________________________________________________________________________________________________________________

3 Explanatory Memorandum, Criminal Code Amendment (Cluster Munitions Prohibition) Bill 2010, p. 7.

4 Explanatory Memorandum, Criminal Code Amendment (Cluster Munitions Prohibition) Bill 2010, p. 7.

5 Act for Peace, Submission 17, p. [1].

3.11 The explanatoiy memorandum notes that terms including 'use', 'develop', 'produce', 'acquire', 'stockpile' and 'retain' are used in their plain English sense. The term 'transfer' is defined in section 72.45 as having the same meaning as that in the Convention. Article 2(8) of the Convention states that 'transfer' involves:

...in addition to the physical movement of cluster munitions into or from national territory, the transfer of title to and control over cluster munitions, but does not involve the transfer of territory containing cluster munition remnants.

Geograph ical jurisdicti on

3.12 The explanatory memorandum emphasises that Category B jurisdiction captures the conduct of persons who are Australian citizens or residents at the time of the alleged offence and provides explanation that:

The application of categoiy B jurisdiction would mean that, regardless of where the conduct constituting the offence occurs, if the person engaging in that conduct is an Australian citizen or body corporate, that person would be able to be prosecuted in Australia. The extension of jurisdiction in this way gives effect to the obligation on States Parties under Article 9 to enact penal sanctions to prevent and suppress prohibited conduct undertaken by persons or on territory under its jurisdiction or control.6

3.13 Human Rights Watch and Harvard Law School's International Human Rights Clinic (IHRC) supported the establishment of extraterritorial jurisdiction in subsection 72.38(3) which would prevent Australian citizens from escaping liability for violating

the Convention's norms.7 This provision was also supported by the Medical Association for Prevention of War (Australia) (MAPW) which also welcomed the government's inclusion of explosive bomblets as well as cluster munitions in the bill.8

Language - 'never under any circumstances'

3.14 The primary concern of many witnesses in relation to section 72.38 was that the phrase 'never under any circumstances' specified in Article 1 (1) of the Convention was not included. They recommended that the phrase preface all offences in section 72.38 in line with the Convention in which states parties undertake 'never under any

6 Explanatoiy Memorandum, Criminal Code Amendment (Cluster Munition Prohibition) Bill 2010, p. 8."

7 Human Rights Watch and International Human Rights Clinic, Submission 7, p, 15.

8 Medical Association for Prevention of War (Australia), Submission 15, p. 3.

circumstances' to engage in prohibited activities related to cluster munitions.9 Human Rights Watch and IHRC argued that the phrase is significant because it:

emphasizes that the convention's prohibitions are comprehensive and apply during both international and non-intemational armed conflicts, as well as in situations that do not arise to the level of armed conflict. The phase underlines the importance of foreclosing exemptions to these restrictions.10

3.15 The Australian Network to Ban Landmines and Cluster Munitions (ANBLC) argued that by omitting the phrase, the section fails to abide by the spirit of the treaty and 'violates the integrity of the Convention and the integrity of the Australian government'. The ANBLC noted that omission 'has significant ramifications, and impacts upon a number of sections, including 72.41 and 72.42 which are both major concerns'.11 The ANBLC highlighted, moreover, that whilst the explanatory memorandum acknowledges the wording of the Convention, the draft legislation

omits this 'vital' phrase.12

3.16 The Attorney-General's Department (AGD) responded to concerns about omitting the Convention phrase 'never under any circumstances'. It informed the committee that it was not necessary to include the phrase because the proposed offences in the section 'will apply in all circumstances, unless otherwise specified'. Furthermore, the department argued that:

Inserting words such as 'never under any circumstances' would depart from the standard drafting practice in the Criminal Code Act 1995 (the Code) and may give rise to questions of interpretation regarding differences in how offences are framed within the Code.13

3.17 Mr Greg Manning, First Assistant Secretary, AGD further highlighted that the reading of the offences 'shows that it achieves the same as the words 'never under any circumstances' in that, in clause 72.38(1), there is a blanket prohibition'. He continued:

So the government's position is that it has prohibited everything that is prohibited under the convention. The issue of the amendment to the

9 Australian Network to Ban Landmines and Cluster Munitions, Submission 3, p. [3]; Aotearoa New Zealand Cluster Munitions Coalition, Submission 6, p. [2]; CBM Australia, Submission 11, p. 2; Australian Lawyers for Human Rights, Submission 19, p. [2]; Oxfam Australia, Submission 14, p. 2; Medical Association for Prevention of War (Australia), Submission 15, p. 4; Act for Peace, Submission 17, p. [2]; Human Rights Watch and IHRC, Submission 7, p. 5.

10 Human Rights Watch and International Human Rights Clinic, Submission 7, p. 5. See also, Aotearoa New Zealand Cluster Munitions Coalition, Submission 6, p. [2],

11 Australian Network to Ban Landmines and Cluster Munitions, Submission 3, p. [5] and [3].

12 Australian Network to Ban Landmines and Cluster Munitions, Submission 3, p. [3], See Explanatory Memorandum, Criminal Code Amendment (Cluster Munitions Prohibition) Bill 2010, p. [1],

13 Attorney-General's Department, Additional information, received 28 February 2011, pp. 1-2.

Criminal Code versus a standalone act would not have changed the nature of the offences as drafted.14

Adequacy of the penalties

3.18 Penalties of up to 10 years imprisonment for individuals or $330,000 for bodies corporate apply in relation to section 72.38 offences. Human Rights Watch and IHRC were concerned that the penalties needed to be codified in the bill. They also

argued that penalties for bodies coiporate which were noted by the Attorney-General in his second reading speech but not included in the bill need to be added to the text of section 72.38 to clarify that the legislation applies to corporations as well as people.15

3.19 Some submitters raised concerns about the fine set for bodies corporate engaged in the development, manufacture and trade in cluster munitions. The Uniting Church of Austral ia-Synod of Victoria and Tasmania argued that the proposed fine of $330,000 should be increased to a maximum penalty of at least 1.1 million or three times the revenue value of the weapons produced or traded, whichever is higher.16

3.20 In relation to concerns regarding the penalties both in terms of adequacy and the fact that they are not codified in the bill, the AGO responded that:

Penalties that apply to bodies corporate are determined by applying the standard formula set out in the Crimes Act 1914 (the Crimes Act)...When the maximum penalty of 10 years imprisonment is converted to penalty units in accordance with the standard formula, the sentence is converted to 3000 penalty units for bodies coiporate, which is equivalent to $330 000.17

3.21 AGO also asserted that all the offences in the Code must be read together with the Code's other provisions as well as the Crimes Act 1914 and that such an approach 'ensures stability and consistency in how penalty provisions are read across all Commonwealth legislation'. The department further noted that:

As a matter of form, and in order to maintain simplicity, the Bill sets out only the penalty of imprisonment, which must be read together with the Crimes Act in order to deteimine the applicable number of penalty units. Including the penalty units in the Bill would unnecessarily lengthen the Bill.18

14 Greg Manning, Attorney-General's Department, Committee Hansard, 3 March 2011, p. 18.

15 Human Rights Watch and International Human Rights Clinic, Submission 7, p. 13.

16 Uniting Church of Australia-Synod of Victoria and Tasmania, Submission 8, p. 1.

17 Attorney-General's Department, Additional information, received 28 February 2011, p. 1.

18 Attorney-General's Department, Additional information, received 28 February 2011, pp. 1-2.

Intent requirement

3.22 For some witnesses, the requirement for a person to intend an act be done in order to be liable for one of the section 72.38 offences sets the threshold for criminal liability too high. Human Rights Watch and IHRC argued, for example that:

Under this standard, individuals would not be liable for conduct if, for example, they were aware their conduct would result in cluster munition use (knowledge) or in a substantial, unjustifiable risk of use

(recklessness).19

3.23 JSCOT was concerned about preventing 'inadvertent participation in the use, or assistance in the use, of cluster munitions by Australia'.2 According to Human Rights Watch and IHRC, the use of an intention standard in section 72.38 of the bill 'makes it difficult to hold individuals liable for use, production, transfer, and stockpiling of cluster munitions or assistance with these prohibited acts even if they know or should have known that their conduct could lead to one of these activities'.21

3.24 Submitters including the Australian Lawyers for Human Rights (ALHR) and MAPW as well as Human Rights Watch and IHRC argued that the section should be amended to support a recklessness standard of intent.22 Invoking JSCOT's recommendation, ALHR held that the bill as it stands might 'relieve of liability a person who knew or should have bwwn that their actions could result in the use of cluster munitions or were recklessly indifferent to their potential use'.23 ALHR argued that the reckless standard be explicitly retained as applicable to the interoperability clause.24 25 Similarly, CBM Australia supported the removal of subsection 72.38(2) and replacement with the standard of recklessness which it argued more accurately reflected the Convention's purpose.23

3.25 The Uniting Church in Australia-Synod of Victoria and Tasmania argued that the section should be modified to state that '(c) the first person knew, or reasonably should have known, that the act would be done' on the basis that this avoids liability

for a person who could not have reasonably known that they were assisting,

19 Human Rights Watch and International Human Rights Clinic, Submission 7, p. 12.

20 Joint Standing Committee on Treaties, Report No 103, Treaties tabled on 12 March and 13 May 2009, 18 August 2009, p. 27.

21 Human Rights Watch and International Human Rights Clinic, Submission 7, p. 12.

22 Australian Lawyers for Human Rights, Submission 19, p. [2]; Medical Association for Prevention of War (Australia), Submission 15, p. 4; Human Rights Watch and IHRC, Submission 7, p. 12.

23 Australian Lawyers for Human Rights, Submission 19, p. [12],

24 Australian Lawyers for Human Rights, Submission 19, p. [12].

25 CBM Australia, Submission 11, p. 2.

encouraging or inducing a prohibited act. Such an amendment 'allows for prosecution of those that knew or who were reckless in their actions'.26

3.26 AGD responded to suggestions that a reckless standard be applied by emphasising that the offences in the bill are to be read in light of the standard fault elements set out in the Code:

Under the Code, intention is the standard fault element for any component of an offence that relates to conduct. A person has intention with respect to conduct if he or she means to engage in that conduct. This approach is the most appropriate way to implement in Australia the obligations set out in the Convention. The Guide to Framing Commonwealth Offences, Civil Penalties and Enforcement Powers states that the standard fault elements in the Code should apply unless there is a reason to depart from these.27 28

3.27 AGD further emphasised that the government had been guided by the prohibition in the Convention. The department noted that whilst the Convention itself does not refer to standards of fault given that it proscribes state rather than individual behaviour, the government considered 'that a reasonable interpretation of the

Convention is that a fault element of intention should be imported into the meaning of Article *Ã¬. AGD stressed that care has been taken to ensure that the bill's offences reflect the language of Article 1 as closely as possible, 'in order to ensure that all

conduct that is prohibited by the Convention is the subject of a criminal offence under Australian law'.29

Section 72.39

3.28 Defences to the offences set out in section 72.38 are listed in sections 72.39 to 72.42 of the bill. Subsection 72.39(2) provides that the Defence Minister may authorise specified members of the ADF or other specified Commonwealth public officials to acquire or retain specified cluster munitions for one or more of the

following purposes:

(a) the development of, and training in, cluster munition and explosive submunitions detection, clearance or destruction techniques;30

(b) the development of cluster munition counter-measures;31

26 Uniting Church in Australia-Synod of Victoria and Tasmania, Submission 8, p. 6.

27 Attorney-General's Department, Additional information , received 28 February 2011, p. 2.

28 Attorney-General's Department, Additional information, received 28 February 2011, p. 2.

29 Attorney-General's Department, Additional information, received 28 February 2011, p, 2.

30 Criminal Code Amendment (Cluster Munition Prohibition) Bill 2010, ss. 72.39(2)(a).

31 Criminal Code Amendment (Cluster Munition Prohibition) Bill 2010, ss. 72.39(2)(b).

32 Criminal Code Amendment (Cluster Munition Prohibition) Bill 2010, ss. 72.39(2)(c).

3.29 This authorisation to acquire or retain a limited number of cluster munitions for destruction or certain purposes creates with it a defence under subsection 72.39(1) for a person who acts in accordance with such an authorisation. In other words, section 72.38 offences are not applicable in relation to the acquisition or retention of a cluster munition authorised under proposed section 72.39(2).33 A defendant bears an

evidential burden in relation to subsection 72.39(1) as set out in subsection 13.3(3) of the Code. This subsection of the Code states that a defendant who wishes to deny criminal responsibility by relying on any exception, exemption, excuse, qualification or justification provided by the law creating an offence bears an evidential burden in relation to the matter.34

3.30 Section 72.39 gives effect to paragraphs 6 and 7 of Article 3 of the

Convention. Article 3(6) permits states parties to retain or acquire a limited number of cluster munitions and explosive submunitions for the development of, and training in, cluster munition and explosive submunitions detection, clearance or destruction techniques, or for the development of cluster munition counter-measures. The article qualifies, however, that the amount of explosive submunitions retained or acquired 'shall not exceed the minimum number absolutely necessary for these purposes'. In accordance with this provision, the explanatory memorandum states that the bill empowers the Minister for Defence to authorise the retention or acquisition of a 'limited number' of cluster munitions for this purpose.35 Article 3(7) permits the transfer of cluster munitions to another state party for the purpose of destruction.

Evidence

3.31 Many witnesses raised concerns about section 72.39 regarding the domestic retention of cluster munitions. Notwithstanding the fact that Article 3(6) of the Convention allows for limited numbers of cluster munitions to be retained for various measures, submitters raised questions about the need to retain any live cluster bombs in Australia. ANBLC for example stated:

Australia does not presently possess cluster bombs and thus would need to acquire them. This is an unnecessary and undesirable step to take. A number of countries have formally recognized that live cluster bombs are not necessary for training purposes and have decided in favour of no retention.

Available, sophisticated technology also allows for research and development tests to be carried out without the use of live cluster

munitions. These tests provide an accurate and predictable study enabling

33 The Minister (currently the Minister for Defence) may delegate this authorisation power to the Secretary of Defence or a Senior Executive Service employee in that department. Criminal Code Amendment (Cluster Munition Prohibition) Bill 2010, ss. 72.39(5).

34 Explanatory Memorandum, Criminal Code Amendment (Cluster Munition Prohibition) Bill 2010, pp. 8-9.

35 Explanatory Memorandum, Criminal Code Amendment (Cluster Munitions Prohibition) Bill 2010, p. 1.

analysis of the correct angle of contact, the distance to object and other necessary data. Live cluster bombs are not necessary and should not be retained.36

3.32 Human Rights Watch and IHRC as well as Union Aid Abroad-APHEDA questioned the necessity of retaining live submunitions and noted that no UNâ accredited clearance organisation is known to use live submunitions for training purposes.37 ALHR took a similar view recommending a prohibition on the retention of all live cluster munitions whilst the Cluster Munition Coalition argued that the section

should be deleted because retention of cluster munitions for training 'is unnecessary'.38 39 Citing the position of a number of countries who have chosen not to retain cluster munitions including Afghanistan, Angola, Austria, Colombia, Honduras, Moldova, Montenegro, Norway, Portugal, and Slovenia, Human Rights Watch and IHRC argued that implementation legislation should not include a clause explicitly allowing

* 39

retention.

3.33 ANBLC raised concern that the inclusion of this provision would set a precedent for similar provisions by other countries and that it 'could open the way to abuse which again flies in the face of the spirit and intent of the treaty'.40 The

organisation noted that abuses of the retention clause took place under the Convention on the Prohibition of the Use, Stockpiling, Production and Transfer of Anti-Personnel Mines and on Their Destruction (Land Mine Treaty) with countries retaining operational quantities of mines.

3.34 As an alternative, other submitters including Act for Peace, suggested that the section should at least specify the number of munitions allowed to be retained in accordance with Convention Article 3(6) which emphasises that the amount 'shall not exceed the minimum number absolutely necessary'.41 Aotearoa New Zealand Cluster

Munitions Coalition (ANZCMC) and ANBLC also raised concerns that there was no specific limit on the number of cluster munitions and submunitions to be retained or any reporting requirements established in accordance with Article 3(8) of the Convention.42 Human Rights Watch and IHRC argued that if Australia was not

36 Australian Network to Ban Landmines and Cluster Munitions, Submission 3, pp. [7-8]. See also, Aotearoa New Zealand Cluster Munitions Coalition, Submission 6, p. [3].

37 Human Rights Watch and IHRC, Submission 7, p. 11; Union Aid Abroad-APHEDA, Submission 12, p. [4],

38 Australian Lawyers for Human Rights, Submission 19, p. [3]; Cluster Munition Coalition, Submission 22.

39 Human Rights Watch and International Human Rights Clinic, Submission 7, p. 11.

40 Australian Network to Ban Landmines and Cluster Munitions, Submission 3, p. [8],

41 Act for Peace, Submission 17, p. [2],

42 Aotearoa New Zealand Cluster Munitions Coalition, Submission 6, p. [3]; Australian Network to Ban Landmines and Cluster Munitions, Submission 3, p. [8].

willing to forgo the option of permitting retention of cluster munitions in legislation, at least such safeguards should be established in legislation.43

3.35 A number of submitters, therefore, held the view that section 72.39 should be either deleted or that the number of live cluster munitions to be retained in Australia be specified in the bill with an assurance of annual reporting on their planned and actual use, the type and quality retained, and recipient state parties if the state transfers cluster munitions.44

The government *s position

3.36 In response to suggestions that live cluster munitions were not required for training purposes, Defence argued that such stocks need to be retained for a number of reasons:

The ADF requires the ability to access cluster munitions that they may find as explosive remnants of war in their current areas of operation as well as those that may potentially be used against the ADF in future conflicts. The ADF requires this access so that it may develop counter-measures and train its personnel in detection, clearance and destruction techniques, as permitted by Article 3(6) of the Convention. The ADF requires access to

live cluster-munitions for the development of counter-measures of a technical nature. ADF explosive ordnance technicians need to be trained in neutralising bomblets. An explosive ordnance technician is unable to complete training with simulated bomblets.45

3.37 Defence further noted that the ADF uses both simulated and live cluster subâ munitions in the development of counter-measures and training in cluster munitions and explosive submunitions detection, clearance and destruction techniques. These

simulated cluster munitions are made specifically for practice purposes and do not contain an explosive fill. However, Defence emphasised that as some cluster subâ munitions are not available in simulated form, live cluster munitions are also used.46

Defence concluded that:

Retention of cluster munitions samples enables the ADF to familiarise explosive ordinance disposal personnel with these munitions, to protect

43 Human Rights Watch and International Human Rights Clinic, Submission 7, p. 12.

44 Australian Network to Ban Landmines and Cluster Munitions, Submission 3, p. [8]; Aotearoa New Zealand Cluster Munitions Coalition, Submission 6 , p. [3]; Uniting Church in Australia- Synod of Victoria and Tasmania, Submission 8, p. 1; CBM Australia, Submission 11, p. 2; Afghan Landmine Survivors' Organization, Submission 13, p. 2; Medical Association for Prevention of War (Australia), Submission 15, p. 6; Union Aid Abroad-APHEDA, Submission

12, p. [4]; Oxfam Australia, Submission 14, p. 3; Act for Peace, Submission 17, pp. [5-6].

45 Department of Defence, Additional information, received 2 March 2011, p. 3.

46 Department of Defence, Additional information, received 2 March 2011, p. 3.

ADF personnel against cluster munitions attacks, and to conduct both battlefield and humanitarian clearance operations.47

3.38 In terms of a current stock, Defence stated that it does not have operational stocks of cluster munitions and that live cluster sub-munitions are not part of Defence's operational weapons inventory and are not in either numbers or configuration, suitable for operational use by the ADF.48 It also noted that training and counter-measure samples are not held with any of Defence's operational munitions.49 50

3.39 Defence responded to concerns regarding domestic retention of cluster munitions by highlighting that section 72.39(3) of the bill states that regulations may prescribe the requirements relating to an authorisation by the Minister, such as the requirement in Article 3(6) that the amount retained or acquired 'shall not exceed the

minimum number absolutely necessaiy for these purposes'.M)

3.40 In relation to a reporting regime, Defence noted that consistent with Australia's approach to other international agreements, the reporting obligations contained in Article 3(8) and Article 7 of the Convention 'do not require legislative

implementation, and can be implemented through administrative means'.51 52 Defence assured the committee that the samples of cluster munitions that it retains for training and other purposes as permitted by the Convention will be subject to reporting.2 *2

Committee view

3.41 The committee accepts that Defence requires access to cluster munitions for training and other legitimate purposes as specified in section 72.39 of the bill and Article 3 of the Convention. Whilst it appreciates the concerns of submitters that Australia should retain only the minimum number absolutely necessary for such purposes, the committee recognises that the bill already states that regulations may prescribe the requirements relating to the Minister's authorisation such as the requirement in Article 3(6). Moreover, it accepts that reporting in relation to domestic acquisition and retention of cluster munition is to be implemented through administrative means and that this approach is consistent with that in relation to other international agreements.

47 Department of Defence, Additional information, received 2 March 2011, p. 4.

48 Department of Defence, Additional information, received 2 March 2011, p. 3.

49 Department of Defence, Additional information, received 2 March 2011, p. 4.

50 Department of Defence, Additional information, received 2 March 2011, p. 4.

51 Department of Defence, Additional information, received 2 March 2011, p. 4.

52 Department of Defence, Additional information, received 2 March 2011, p. 4.

Chapter 4

Interoperability

4.1 This chapter considers one of the most contentious of all the Convention's interpretive issues-interoperability or military cooperation between states parties and states that are not a party to the Convention.1 It outlines the international negotiations on interoperability including Australia's position which is reflected in the bill. The chapter details the evidence before the committee in relation to section 72.41 of the bill which gives effect to the Convention's interoperability clause and considers the respective obligations on states parties to, amongst other requirements, promote the norms established by the Convention.

Section 72.41

4.2 Section 72.41 of the bill, which gives effect to Article 21(3) and (4) of the Convention, provides that certain acts earned out by Australians in military cooperation and operations with countries that are not party to the Convention are not offences against section 72.38. The section reflects Australia's position on

interoperability.

4.3 Article 21(3) and (4) of the Convention state:

3. Notwithstanding the provisions of Article 1 of this Convention and in accordance with international law, States Parties, their military personnel or nationals, may engage in military cooperation and operations with States not party to this Convention that might engage in activities prohibited to a State Party.

4. Nothing in paragraph 3 of this Article shall authorise a State Party:

(a) To develop, produce or otherwise acquire cluster munitions;

(b) To itself stockpile or transfer cluster munitions;

(d) To expressly request the use of cluster munitions in cases where the choice of munitions used is within its exclusive control.

1 DFAT defines interoperability as the 'ability of militaries from different countries to effectively engage in military cooperation and operations' (Department of Foreign Affairs and Trade, Additional information, received 1 March 2011). The committee uses the term more narrowly in recognition of the contention surrounding military engagement between states parties and

non-states parties to the Convention which is the subject of Article 21 generally and Article 21(3) specifically.

4.4 Section 72.41 states that a person who is an Australian citizen, member of the Australian Defence Force (ADF) or is performing services under a Commonwealth contract2 does not commit an offence against section 72.38 by doing an act if:

(a) the act is done in the course of military cooperation or operations with a foreign country that is not a party to the Convention;3 and

(b) the act is not connected with the Commonwealth:

(i) using a cluster munition; or

(ii) developing, producing or otherwise acquiring a cluster munition; or

(iii) stockpiling or retaining a cluster munition; or

(iv) transferring a cluster munition; and

(c) the act does not consist of expressly requesting the use of a cluster munition in a case where the choice of munitions used is within the Commonwealth's exclusive control.

4.5 In order to understand the government's position on Article 21, the following section will consider the Oslo Process of international negotiations on the Convention with focus on the interoperability provision in the article.

Negotiating Article 21

4.6 During the Oslo Process to establish a treaty on cluster munitions, Australia alongside countries including Canada and the UK raised concerns that the draft Convention text was problematic and could pose as a 'legal barrier to maintaining interoperability'.4 5

4.7 At the Wellington Conference in February 2008, Australia in association with a number of other countries issued a discussion paper on the matter.3 The group of 12 states had concerns about the draft Convention Article l(l)(c) prohibition that states

2 The meaning of the term 'Commonwealth contract' is that given by the Dictionary in the Code, that is, a contract, to which a Commonwealth entity is a party, under which services are to be, or were to be, provided to a Commonwealth entity ( Explanatory Memorandum, Criminal Code Amendment (Cluster Munitions Prohibition) Bill 2010, p. 12).

3 This may include peacekeeping operations mandated by the United Nations which involve both States Parties and non-States Parties to the Convention. The language of subsection 72.41(a) reflects the language of Article 21(4)(a) and (c) of the Convention.

4 Department of Foreign Affairs & Trade, Additional information, received 1 March 2011, p. 1.

5 Canada described the need for a provision on interoperability as 'most critical' and a 'red-line issue' of whether it could join the Convention. International Campaign to Ban Landmines and Cluster Munition Coalition, Cluster Munition Monitor 2010, Canada - Cluster Munition Ban Policy, 22 October 2010, http://www.the-monitor.org/index.php/cp/displav/region profiles/theme/119 (accessed 15 December 2010). The signatories to the discussion paper include Australia, Canada, Czech Republic, Denmark, Finland, France, Germany, Italy, Netherlands, Sweden, Switzerland and the United Kingdom.

parties never under any circumstances assist, encourage or induce anyone to engage in any activity prohibited to a state party. They noted that this prohibition created 'significant obstacles to the maintenance of alliance relationships and to participation in future multi-national operations with non-State parties'.6 The group emphasised that whilst states should be 'advocates for an effective convention and seek to promote its ultimate universalisation', if 'concerns about inter-operability prevent States from committing to the Convention, the goal of universalisation is undermined'.7 The discussion paper noted that the draft treaty text could 'inhibit a range of military activities essential to the effectiveness of international operations (that involve nonâ State parties who may use cluster munitions)' and warned that this would render participation by states parties in such operations 'unworkable'.8

4.8 At the Dublin Diplomatic Conference on Cluster Munitions in May 2008, Argentina, Mexico, Venezuela, Honduras and Guatemala raised concerns about the proposed inclusion of the concept of interoperability in the Convention, arguing that it may create a window for the use of cluster munitions by military coalitions.9 Venezuela argued that the inclusion of an interoperability concept would risk creating two orders of states parties - those complying immediately with the Convention and those who will continue to effectively have recourse to cluster munitions. The UK responded by stating that Article 21 (4) of the then draft text should ensure that states

6 Australia, Canada, Czech Republic, Denmark, Finland, France, Germany, Italy, Netherlands, Sweden, Switzerland, United Kingdom, 'Discussion paper Cluster Munitions and Interâ Operability: The Oslo-Process Discussion Text and Implications for International Operations', Wellington Conference on Cluster Munitions, February 18-22, 2008, p. [1], http://www.delegfrance-cd-geneve.org/declarations/ssdos decl sous munitions/discussion- paper-like-minded-conf-wellingtion.pdf (accessed 14 December 2010).

7 Australia, Canada, Czech Republic, Denmark, Finland, France, Germany, Italy, Netherlands, Sweden, Switzerland, United Kingdom, 'Discussion paper Cluster Munitions and Interâ Operability: The Oslo-Process Discussion Text and Implications for International Operations', Wellington Conference on Cluster Munitions, February 18-22, 2008, p. [1], http://www.delegfrance-cd-geneve.org/declarations/ssdos decl sous munitions/discussion- paper-like-minded-conf-wellingtion.pdf (accessed 14 December 2010).

8 Australia, Canada, Czech Republic, Demnark, Finland, France, Germany, Italy, Netherlands, Sweden, Switzerland, United Kingdom, 'Discussion paper Cluster Munitions and Interâ Operability: The Oslo-Process Discussion Text and Implications for International Operations', Wellington Conference on Cluster Munitions, February 18-22, 2008, p. [2], http://www.delegfrance-cd-geneve.org/declarations/ssdos decl sous munitions/discussion- paper-like-minded-conf-wellingtion.pdf (accessed 14 December 2010).

9 Diplomatic Conference for the Adoption of a Convention on Cluster Munitions, Summary Record of Tenth Session of the Committee of the W7wle, CCM/CW/SR/10, 18 June 2008, http://www.clustermunitionsdublin.ie/pdf/CoW10May26am 002.pdf (accessed 15 December 2010).

parties cannot use the interoperability provision as an exception to their obligations under Article l.10

4.9 Throughout the process, those involved in the negotiations sought to establish a balance between humanitarian and security concerns as well as that between the interests of states and civil society.11 Further to the discussion paper and in the final stage of negotiations, Article 21 was inserted into the text of the Convention at the Dublin Diplomatic Conference.

Interpreting Article 21

4.10 There are two contrasting interpretations of the relationship between Article 1 and 21 of the Convention. Some states interpret Article 21(3) as an exemption to the Article 1(1 )(c) prohibition on assistance in the context of joint military operations and cooperation with non-states parties. This is the position that the government has taken as stated by the explanatory memorandum on Article 21(3):

The effect of paragraph 3 is that certain acts are permitted in the context of military cooperation and operations with States not party to the Convention, even though such acts could ultimately assist the non-State Party to engage

in conduct that is prohibited by Article lof the Convention.12

4.11 The government recognises that paragraph 4 of Article 21 restricts the scope of paragraph 3 by re-introducing some legal restrictions. The defence in section 72.41 of the bill applies, therefore, to persons who 'undertake prohibited conduct in the course of military operations with non-States Parties, as long as the act does not constitute any of the conduct mentioned in paragraph 4 of Article 21 of the Convention'.13Australia's interpretation of Article 21 as reflected in the bill is consistent with the approach of other states parties with whom Australia often works in military coalitions, including the UK and Canada.14

4.12 The alternative position held by governments including Ireland and New Zealand (and supported by the majority of submitters to the committee) is that Article

10 Diplomatic Conference for the Adoption of a Convention on Cluster Munitions, Summary Record of Tenth Session of the Committee of the Whole, CCM/CW/SR/10, 18 June 2008, http://www.c1usteiTnunitionsdublin.ie/pdf/CoW10Mav26am 002.pdf (accessed 15 December 2010).

11 Diplomatic Conference for the Adoption of a Convention on Cluster Munitions, Summary Record of the Sixteenth Session of the Committee of the Whole, CCM/CW/SR/16, 18 June 2008, http://www.clustermunitionsdublin.ie/pdf/CoW16Mav28pm revl5Julv2009.pdffaccessed 15 December 2010).

12 Explanatory Memorandum, Criminal Code Amendment (Cluster Munitions Prohibition) Bill 2010, p. 12.

13 Explanatory Memorandum, Criminal Code Amendment (Cluster Munitions Prohibition) Bill 2010, p. 2."

14 Department of Defence, Additional information, received 2 March 2011, p. 2.

21(3) and (4) clarifies rather than suspends Article l(l)(c). Their view is that joint military operations are authorised only to the extent that the ban on assistance with prohibited acts is maintained.15 Supporters of this position argue that Article 21 should be considered in conjunction with the general obligations of the Convention articulated in Article 1(1) of the Convention. They hold the view that as the puipose of

the Convention is to eliminate cluster munitions 'for all times', it would be inconsistent with that purpose to interpret Article 21(3) as waiving the obligations of Article 1(1 )(c), including its prohibition on assistance during periods of joint military

operation. On the adoption of the text of the Convention, for example, Iceland noted that Article 21(3) 'should not be read as entitling States Parties to avoid their specific obligations under the Convention for this limited purpose', that is, for the puipose of joint military operations. It continued that the 'decision to reinforce this position by listing some examples in paragraph 4 cannot therefore be interpreted to allow departures in other respects'.16

4.13 The proposal made to the Senate Standing Committee for the Selection of Bills to refer the bill for inquiiy and report suggested that the bill was 'inconsistent with recommendations made by the Joint Standing Committee on Treaties (JSCOT) when it reviewed the United Nations Convention on Cluster Munitions in the 42nd Parliament'.17 The following section considers, therefore, JSCOT's recommendations and Australia's response to them.

Joint Standing Committee on Treaties and Government response

4.14 In its report on the Convention, JSCOT raised three issues in relation to Article 21:

" the motivations for the inclusion of Article 21(3) in the Convention;

" the ability of Australian personnel to inadvertently participate in the use, or assist in the use, of cluster munitions in light of the interoperability permitted under Article 21;

15 Human Rights Watch, Promoting the Prohibitions, The Need for Strong Interpretations of the Convention on Cluster Munitions, 6 November 2010, p. 4, http://www.hrw.Org/en/news/2010/l 1/06/piOmoting-piOhibitions (accessed 14 December 2010).

16 Statement of Ireland, 'Statement by the Government of Ireland upon the Adoption of the Convention on Cluster Munitions', Dublin Diplomatic Conference on Cluster Munitions, CCM/CRP/2, 30 May 2008, http://www.clustermunitionsdublin.ie/ndf/IcelandStatementGE.pdf (accessed 14 December 2010).

17 Senate Standing Committee for the Selection of Bills, Report No. 13 of 2010, Appendix 1, http://www.aph.gov.au/Senate/committee/selectionbills ctte/reports/2010/rep 1310.pdf (accessed 11 February 2011).

" the risk of Australian personnel being relied upon to carry out an action which would be in breach of the Convention during a joint military operation with a State not party to the Convention.18

4.15 JSCOT acknowledged concerns regarding the potential for Australian military personnel to inadvertently participate in the use or assist in the use of cluster munitions. It raised its own concerns that some of the terms in the Convention are 'not

clearly defined and may provide an avenue by which Australia could participate in actions which may contravene the humanitarian aims of the Convention'.19 It recommended that the government and ADF have regard to the definition of the terms 'use', 'retain', 'assist', 'encourage' and 'induce' as they apply in Articles 1, 2 and 21 of the Convention when drafting the legislation to implement the treaty.20

4.16 JSCOT further recommended that when drafting the legislation required to implement the Convention together with policies under which ADF personnel are to operate, the government and ADF have regard to preventing 'inadvertent participation in the use, or assistance in the use, of cluster munitions by Australia'.21

4.17 In evidence to JSCOT, DFAT emphasised the importance of Article 21 in terms of Australia being able to engage in coalition and UN peacekeeping operations and to maintain defence cooperation with countries which are not or will not be states parties to the Convention for some time.22 In its response to JSCOT's

recommendations, DFAT clarified Australia's position that its military personnel would be permitted to participate in coalition operations in which an ally may use cluster munitions. It explained that such personnel would not, however, be permitted to physically use, transfer of expressly request the use of cluster munitions.23

Evidence

4.18 Australia's interpretation of Article 21 received the greatest attention in evidence to the committee. The majority of submitters argued that unlike the interpretation articulated in the bill which recognises Article 21 (3) as an exception to Article 1(1 )(c) prohibitions, Article 21(3) should be interpreted as a clarification of

18 Joint Standing Committee on Treaties, Report No 103, Treaties tabled on 12 March and 13 May 2009, 18 August 2009, p. 19.

19 Joint Standing Committee on Treaties, Report No 103, Treaties tabled on 12 March and 13 May 2009, 18 August 2009, p. 27.

20 Joint Standing Committee on Treaties, Report No 103, Treaties tabled on 12 March and 13 May 2009, 18 August 2009, p. 27.

21 Joint Standing Committee on Treaties, Report No 103, Treaties tabled on 12 March and 13 May 2009, 18 August 2009, p. 27.

22 Joint Standing Committee on Treaties, Report No 103, Treaties tabled on 12 March and 13 May 2009,18 August 2009, p. 19.

23 Joint Standing Committee on Treaties, Report No 103, Treaties tabled on 12 March and 13 May 2009, 18 August 2009, p. 16.

Article l(l)(c) prohibitions.24 25 This position stands in direct contrast to that of the government. Thus, concerns raised by the majority of submitters both in terms of the bill's provisions as well as in relation to Convention obligations outside of the imposition of penal sanctions stem largely from their divergent interpretation of Article 21.

4.19 The primary concern of submitters was that section 72.41 may be interpreted to allow Australians to assist with prohibited acts in the context of joint military operations.23 Mrs Lorel Thomas of the Cluster Munition Coalition voiced this concern

by stating 'we do not believe that deliberate and willing cooperation by Australian personnel in prohibited acts is acceptable'.26 The Australian Network to Ban Landmines and Cluster Munitions (ANBLC) argued that Article 21 was designed to allow state parties to work with non-state parties and was 'never meant to allow

military personnel of the State Party to engage in prohibited acts and should not be interpreted in this fashion'.27 The Law Council of Australia noted that the interpretation of such submitters is that Article 21(3) serves to 'clarify that

participation in joint military operations when it does not amount to assistance with acts prohibited by the Convention , is not prohibited under the Convention1.28

4.20 Referring to JSCOT's observation that Article 21(4) 'reaffirms the obligation that States Parties cannot assist, encourage or induce the use of cluster munitions by another State'29, ANBLC held that the legislation:

...allows for Australian soldiers to engage in actions such as participating in planning a cluster munitions strike, agreeing to rules of engagement where cluster munitions would be used, training others in the use of cluster munitions and even calling for a cluster munitions strike provided that the choice of munitions used was not exclusively under Australian control'.30

4.21 Human Rights Watch and the IHRC argued that if adopted, such an

interpretation would 'essentially allow Australian military personnel to load and aim

24 See for example, Lorel Thomas, Cluster Munition Coalition, Committee Hansard, 3 March 2011, p. 4.

25 Australian Red Cross, Submission 21, p. 3; Australian Network to Ban Landmines and Cluster Munitions, Submission 3, p. [4]; Aotearoa New Zealand Cluster Munitions Coalition, Submission 6, p. [2]; Act for Peace, Submission 17, pp. [6-7]; Afghan Landmine Survivors' Organization, Submission 13, p. 3; Human Rights Watch and IHRC, Submission 7, p. 5.

26 Lorel Thomas, Cluster Munitions Coalition, Committee Hansard, 3 March 2011, p. 4.

27 Australian Network to Ban Landmines and Cluster Munitions, Submission 3, p. [5].

28 Law Council of Australia, Submission 20, p. 8. The Law Council of Australia expresses no views about such criticisms of Australia *s approach to interoperability in Article 21.

29 Joint Standing Committee on Treaties, Report No 103, Treaties tabled on 12 March and 13 May 2009, 18 August 2009, p. 14.

30 Australian Network to Ban Landmines and Cluster Munitions, Submission 3, p. [4],

the gun, so long as they did not pull the trigger'/1 They noted that whilst Article 21(3) serves to clarify that, in the context of joint military operations, military personnel 'may participate in such operations without violating the convention; it does not, however, give them licence to violate' the Convention's prohibitions and that:

The proposed Section 72.41 takes the opposite approach and adopts language that seems to go further than Article 21(3). While Article 21(3) unambiguously states only that states parties "may engage" in joint military operations, the Bill creates a defence for many acts during such operations that on their face violate the convention.31 32

4.22 The Australian Red Cross held a similar view, arguing that rather than protecting personnel from liability from inadvertent or indirect participation in activities involving the use of cluster munitions, the 'defence as currently drafted could in fact allow the intentional violation of the Convention'.33 The International

Committee of the Red Cross (ICRC) took the position that the section 72.41 defence:

...could lead to permitting the forces of a State Party to be directly and

actively involved in activities such as training for and planning the use of cluster munitions, which would contravene the Convention and undermines its goals and that such acts would perpetuate rather than eliminate the future use of these weapons/4 35

4.23 Similarly, Australian Lawyers for Human Rights (ALHR) argued that under the bill's provisions, Australia could 'potentially participate' in acts of assistance that run directly counter to the Convention's purpose'.33 Drawing on the Vienna Convention on the Law of Treaties (VCLT) which governs the interpretation of the Convention, ALHR drew the committee's attention to Article 31(1) of the VCLT. It states that a treaty 'shall be interpreted in good faith in accordance with the ordinary meaning to be given to the terms of the treaty in their context and in light of its objective and purpose'. ALHR held that the 'object and purpose' of the Convention on Cluster Munitions can be ascertained, in part, by consideration of the preamble which affirms that the fundamental humanitarian and disarmament purpose of the Convention is to 'put an end for all time to the suffering and casualties caused by cluster munitions'.36

4.24 Referring to the Convention on the Prohibition of the Use, Stockpiling, Production and Transfer of Anti-Personnel Mines and on Their Destruction (Land Mine Treaty), ANBLC emphasised that joint operations can be conducted without

31 Human Rights Watch and International Human Rights Clinic, Submission 7, p. 6.

32 Human Rights Watch and International Human Rights Clinic, Submission 7, p. 6.

33 Australian Red Cross, Submission 21, p. 3.

34 International Committee of the Red Cross, Submission 9, p. 2.

35 Australian Lawyers for Human Rights, Submission 19, p. [11].

36 Australian Lawyers for Human Rights, Submission 19, p. [4], See further, paragraph 2 of the Convention preamble.

states parties being required to carry out prohibited acts.37 Indeed, when similar concerns were raised during negotiations about joint military operations in relation to the Land Mine Treaty, the Law Council of Australia argued that states addressed the

issue by clarifying their position in national statement and national laws, rather than by adopting a separate article, such as Article 21 of the Convention.38

4.25 Other witnesses cited the legislation of New Zealand and Ireland respectively as key examples of a more narrow approach to Article 21 for Australia to follow.39 The New Zealand legislation stipulates that a member of the anned forces does not commit an offence:

...merely by engaging, in the course of his or her duties, in operations,

exercises, or other military activities with the armed forces of a State that is not a party to the Convention and that has the capability to engage in

conduct prohibited by section 10(1).40

Suggested amendments

4.26 A substantial number of submitters argued that section 72.41 should be revised to state explicitly in the bill that all the Convention's prohibitions apply during joint military operations to ensure that such operations with non-states parties do not become what the ANZCMC termed a 'loophole' in the bill's prohibitions.41 Many such

submitters suggested that the bill heed JSCOT's recommendation and apply a more narrow definition to that of:

" 'mere participation' in military cooperation or operations with non-states parties, and

" acts that are 'unintended or inadvertent or that only have a remote or indirect relationship with the prohibited conduct'.42

37 Australian Network to Ban Landmines and Cluster Munitions, Submission 3, p. [5].

38 Law Council of Australia, Submission 20, p. 10.

39 See for example, International Committee of the Red Cross, Submission 9, p. 3. See also the discussion on the New Zealand legislation at the committee hearing, Committee Hansard, 3 March 2011, pp. 5-6.

40 Cluster Munitions Prohibition Act 2009, Section 11(6), http://www.legislation.govt.nz/act/public/2009/0068/latest/DLM2171672.html (accessed 28 January 2011).

41 Human Rights Watch and IHRC, Submission 7, pp. 6-7; Australian Network to Ban Landmines and Cluster Munitions, Submission 3, p. [5]; Union Aid Abroad-APHEDA, Submission 12, p. [3]; CBM Australia, Submission 11, p. 3; Australian Lawyers for Human Rights, Submission 19, p. [2]; Oxfam Australia, Submission 14, p. 2; Cluster Munition Coalition, Submission 22; Aotearoa New Zealand Cluster Munitions Coalition, Submission 6, p. [2],

42 Australian Red Cross, Submission 21, p. 3. See also, Human Rights Watch and International Human Rights Clinic, Submission 7, p. 5.

4.27 A number of submitters were also concerned that subsection 72.41(c) should be amended to state explicitly that military personnel are prohibited from requesting cluster munitions strikes.43 Human Rights Watch and the IHRC, for example, took the view that section 72.41(c) should be amended to prohibit expressly such requests on the basis that such requests come 'dangerously close to use'.44 MAPW was concerned that the provision could be interpreted to mean that any act or conversation that falls just short of 'expressly requesting' a cluster munition strike is permissible and that the

entire section should be deleted on the basis that it violates Article 9 of the Convention.45

4.28 Human Rights Watch and the IHRC emphasised that revising section 72.41 to reflect the continued application of the Convention's prohibitions during situations of interoperability would not interfere with Australia's military partnerships or restrict Australia's ability to participate in joint military operations with non-states parties. They argued that it would also protect individual soldiers from liability for acts during such operations and that experience with the Land Mine Treaty 'shows that states are fully capable of abiding by a prohibition on assistance while cooperating with the armed forces of states not party'.46

4.29 The Law Council of Australia took a different approach, suggesting that rather than focus on section 72.41 defence provisions, a mechanism of regular reporting be established whereby the government and ADF regularly report to the committee on

how they have acted to ensure compliance with the Convention whether by way of published government policy or rules of engagement.47

The government *s position

The importance of interoperability

4.30 The position of the Australian Government is that interoperability is 'central to the protection of international security, as well as Australia's national security'.48 The Attorney-General noted that the ability to maintain military capability through interoperability is a 'fundamental pillar of international security and essential for

43 Aotearoa New Zealand Cluster Munitions Coalition, Submission 6, pp. [2-3]; Union Aid Abroad-APHEDA, Submission 12, p. [3]; CBM Australia, Submission 11, p. 3; Australian Lawyers for Human Rights, Submission 19, p. [2]; Human Rights Watch and International Human Rights Clinic, Submission 7,*Â¡.*Ã¤â, Afghan Landmine Survivors' Organization, Submission 13, p. 3.

44 Human Rights Watch and International Human Rights Clinic, Submission 7, p. 8.

45 Medical Association for Prevention of War (Australia), Submission 15, p. 5.

46 Human Rights Watch and International Human Rights Clinic, Submission 7, p. 7.

47 Law Council of Australia, Submission 20, p. 12.

48 Department of Foreign Affairs and Trade, Additional information, received 1 March 2011.

Australia's national security'.49 Indeed, Australia's position is that without such a provision, participation by Australia in joint military operations would be rendered unworkable.50 As Lieutenant General David Hurley, Vice Chief of the Defence Force emphasised to the committee in response to the question of whether a total ban on

cluster munitions in relation to the ADF could be considered:

...I think at times calls for total exclusion do not recognise the deeply

integrated nature of interoperability. For example, our people are deeply embedded with US forces or coalition forces on operations today. Total exclusion would negate interoperability, which is one of the balancing parts of the convention. If we want to be interoperable, to be able to conduct

military cooperation and military operations with a non-state party, total exclusion would prevent us from doing that.51 52

Interoperability, the Convention and the bill

4.31 The government's position is that the bill gives effect to the Convention in Australian law and is both guided and limited by the contents of the Convention. In this regard, AGD highlighted that the interoperability defence in section 72.41 'reflects the conduct that is permitted by paragraph 3 of Article 21 while ensuring that the conduct that is prohibited by paragraph 4 of Article 21 remains prohibited'.32

Therefore:

Section 72.41 provides that a person who is an Australian citizen,

Australian Defence Force (ADF) member or Commonwealth contractor does not commit an offence under section 72.38 if the act is done in the course of military cooperation or operations with a foreign country that is not a party to the Convention, as long as the act is not connected with

Australia using, developing, producing, otherwise acquiring, stockpiling, retaining or transferring a cluster munition...53

4.32 The government considers that Article 21(3) permits certain acts in the context of military cooperation and operations with non-states parties even though such acts could 'ultimately assist the non-State Party to engage in conduct that is

49 The Hon Robert McClelland MP, Attorney-General, Second Reading Speech, House Hansard, 27 October 2010, p. 9.

50 Australia, Canada, Czech Republic, Denmark, Finland, France, Germany, Italy, Netherlands, Sweden, Switzerland, United Kingdom, 'Discussion paper Cluster Munitions and Interâ Operability: The Oslo-Process Discussion Text and Implications for International Operations', Wellington Conference on Cluster Munitions, February 18-22, 2008, p. [2], http:/Avww.delegfrance-cd-geneve.org/declarations/ssdos decl sous munitions/discussion- paper-like-minded-con f-wellingtion.pdf (accessed 14 December 2010).

51 Lieutenant General David Hurley, Department of Defence, Committee Hansard, 3 March 2011, p. 20.

52 Attorney-General's Department, Additional information, received 28 February 2011, p. 5.

53 Attorney-General's Department, Additional information, received 28 February 2011, p. 3.

prohibited in Article 1 of the Convention'.34 In other words, acts defined in Article l(l)(c) including that of assistance are, for the purposes of the bill, considered permissible conduct in the course of joint military cooperation and operations. While giving evidence to the committee, Mr Greg Manning, First Assistant Secretary, AGD clarified this point:

CHAIR * Does the interpretation by the Australian government of the convention as reflected in section 72.41 mean that in joint military operations its military personnel may assist military personnel of non-state parties to use, develop, produce, acquire, stockpile, retain or transfer cluster munitions?

Mr Manning *The effect of 72.41 is that the Australian government itself cannot use, develop, produce or otherwise acquire but that the ancillary provisions are open to Australia. So yes * it can.54 55 56

4.33 It will be an offence, however, for Australian personnel to expressly request the use of cluster munitions in cases where the choice of munitions used is within their exclusive control.36 This provision realises Article 21(4) of the Convention and contains two concepts: an 'express request' and a case of'exclusive control':

If a person's act consists of an express request in a situation of exclusive control, the defence in proposed section 72.41 will not be made out. Both concepts must be present in order for the application of the defence to be excluded. For example, if a person expressly requests the use of cluster munitions in a case where the choice of munitions used in not within the exclusive control of the Commonwealth, they may still raise the defence in proposed section 72.41.57 58 59

4.34 Thus, the limitations contained in the interoperability defence in the bill will ensure that 'Australian and Australians will continue to act consistently with the object and purpose of the Convention, even when undertaking cooperative activities with countries that are not obliged to comply with the Convention'.5

4.35 In response to suggestions that the defence apply to inadvertent participation in the use of cluster munitions, AGD affirmed that the Convention does not prohibit inadvertent participation in the use, or assistance in the use, of cluster munitions.39

54 Explanatory Memorandum, Criminal Code Amendment (Cluster Munitions Prohibition) Bill 2010, p. 12. See also Attorney-General's Department, Additional infoimation, received 28 February 2011, p. 4.

55 Committee Hansard, 3 March 2011, p. 19.

56 Government Response to Joint Standing Committee on Treaties Report No 103 on the Convention on Cluster Munitions, 13 May 2010, pp. 1-2.

57 Explanatory Memorandum, Criminal Code Amendment (Cluster Munitions Prohibition) Bill 2010, p. 13.

58 Attorney-General, Minister for Foreign Affairs, Minister for Defence, Submission 24, p. 3.

59 Attorney-General's Department, Additional information, received 28 February 2011, p. 3.

Practical application o f the interoperability defence

4.36 According to the government, the ability to maintain interoperability means that 'ADF personnel can continue to support coalition operations involving non-States Parties, and will help to protect ADF lives during those combined operations'.60 Defence highlighted that the effect of the provision is that ADF personnel could be

defended by non-states-parties through 'close air support, even when cluster munitions might be used'.61

4.37 In terms of the scope of section 72.41 or practical effect of Article 21, the joint government submission stated that:

ADF personnel will be able to participate in a variety of roles when

involved in combined operations with non-States Parties who may use cluster munitions, including by holding senior positions (without exercising exclusive control over the choice of munitions used in operations). For

example, the ADF will be able to participate in combined headquarters, mission or other planning with non-State Party forces. ADF personnel may be deployed to operate with non-States Parties, or to provide logistical

support to non-State Party forces.62

4.38 Further, Defence informed the committee that in an operational sense, ADF personnel will be prohibited from 'physically firing, discharging or releasing cluster munitions'.63 In evidence to JSCOT, Defence had noted that in practice, 'ADF personnel should not be the first or the last in the chain of command when cluster munitions are used.64

4.39 Defence highlighted that ADF doctrine, procedures, rules and directives are 'being modified to ensure consistency with the Convention and the Bill' and that the necessary changes will be made before Australia ratifies the Convention and the implementing legislation commences.65 Defence also assured the committee that the ADF is experienced at 'incorporating the requirements of weapons treaties into doctrine and procedures and complying with those requirements while working in coalition operations'.66

__________________________________________________________________________________________37_

60 Attorney General, Minister for Foreign Affairs, Minister for Defence, Submission 24, p. 3.

61 Department of Defence, Additional infonnation, received 2 March 2011, p. 1.

62 Attorney-General, Minister for Foreign Affairs, Minister for Defence, Submission 24, p. 3.

63 Department of Defence, Additional information, received 2 March 2011, p. 1.

64 Department of Defence, Additional infonnation, received 2 March 2011, p. 1. See also, Joint Standing Committee on Treaties, Report No 103, Treaties tabled on 12 March and 13 May 2009, 18 August 2009, p. 21.

65 Department of Defence, Additional infonnation, received 2 March 2011, p. 2.

66 Department of Defence, Additional information, received 2 March 2011, p. 2.

Comparison with Land Mine Treaty

4.40 The government's response to the suggestion that its approach to cluster munitions should mirror that in relation to the Land Mine Treaty is reflected in the joint discussion paper issued during the Oslo Process.67 At that time, the government took the view that the strategies employed in relation to anti-personnel mines which

allow for the feasible removal of officers from the decision-making process, are unlikely to work for cluster munitions. It noted that anti-personnel mines are 'less likely to be used in modem coalition warfare * given that they have reduced military utility 'where conventional battles are fast-moving or operations are non-conventional

or insurgent in nature'. Moreover, states parties to the Convention are more likely to be 'inadvertently captured by the prohibition because of the wide variety of planned and unplanned in scenarios in which cluster munitions may be used and the short planning lead time involved.68

4.41 DFAT emphasised that as the legal obligations enshrined in the respective treaties are different, the government has taken a different legislative approach to landmines and cluster munitions 'in so far as the Government must ensure that Australia implements its legal obligations under each Convention'.69 AGD also noted that the Convention was negotiated in light of the experience with the Land Mine Treaty. It informed the committee that in any case, Australia's position in relation to both treaties is that military cooperation and operations between states including nonâ states parties is 'central to the protection of international security, as well as Australia's national security'.70

Article 21 positive obligations

4.42 Whilst Article 21(3) permits military cooperation between states parties and states not party to the Convention, the first two paragraphs of the article also oblige states parties to promote the Convention's norms. In this sense, the article seeks to balance the provision for continued military cooperation with non-states parties with

67 Australia, Canada, Czech Republic, Denmark, Finland, France, Germany, Italy, Netherlands, Sweden, Switzerland, United Kingdom, 'Discussion paper Cluster Munitions and Interâ Operability: The Oslo-Process Discussion Text and Implications for International Operations', Wellington Conference on Cluster Munitions, February 18-22, 2008, p. [2], http://www.delegfrance-cd-geneve.org/declarations/ssdos decl sous munitions/discussion- paper-like-minded-conf-wellingtion.pdf (accessed 14 December 2010).

68 Australia, Canada, Czech Republic, Denmark, Finland, France, Germany, Italy, Netherlands, Sweden, Switzerland, United Kingdom, 'Discussion paper Cluster Munitions and Interâ Operability: The Oslo-Process Discussion Text and Implications for International Operations', Wellington Conference on Cluster Munitions, February 18-22, 2008, p. [2], http://www.delegfrance-cd-geneve.org/declarations/ssdos decl sous munitions/discussion- paper-like-minded-conf-wellingtion.pdf (accessed 14 December 2010).

69 Department of Foreign Affairs and Trade, Additional information, received 1 March 2011, p. 4.

70 Attorney-General's Department, Additional information , received 28 February 2011, p. 6.

that of positive obligations to actively discourage non-states parties from using cluster munitions and to adhere to the Convention.71

4.43 A number of submitters highlighted the importance of Article 21(1) and (2) of the Convention particularly in light of the interoperability clause. The Australian Red Cross emphasised the importance of ensuring that paragraphs 3 and 4 of the article do not conflict with paragraphs 1 and 2, noting that in its opinion, the bill does not achieve this balance.72

4.44 Many other submitters argued that Australia's positive obligations under Article 21(1) and (2) need to be recognised in the bill.73 Union Aid Abroad- APHEDA, for example, argued that Article 9 mandates states parties to implement all obligations of the Convention and that implementing the Convention's positive

elements through legislation is the 'best way to set clear binding rules and ensure that Australia is fulfilling all of its treaty obligations'.74 Submitters in support of this course of action recommended that a designated government agency be charged with

coordinating implementation of Australia's positive obligations under the Convention, namely to encourage non-states parties to join and promote the Convention's norms with all states.75

4.45 Other submitters highlighted the need for recognition in the bill of other positive obligations under the Convention including that of stockpile destruction, clearance procedures and victim assistance.76

4.46 ALHR argued in favour of incorporating an intention clause to assist in interpreting the statute77 whilst others supported the inclusion of provisions which

71 Article 21(1) requires states parties to encourage non-states parties to 'ratify, accept, approve or accede' to the Convention with the 'goal of attracting the adherence of all States to this Convention'. Article 21(2) requires that states parties notify non-states parties of their obligations under the Convention, to promote the Convention's norms and to make 'its best efforts to discourage States not party to this Convention from using cluster munitions'.

72 Australian Red Cross, Submission 21, p. 2; Medical Association for Prevention of War (Australia), Submission 15, pp. 6-7.

73 See for example, International Committee of the Red Cross, Submission 9, p. 2.

74 Union Aid Abroad-APHEDA, Submission 12, p. [3],

75 Human Rights Watch and International Human Rights Clinic, Submission 7, p. 14; Oxfam Ausfralia, Submission 14, p. 3; Medical Association for Prevention of War (Australia), Submission 15, p. 7; CBM Australia, Submission 11, p. 4; Aotearoa New Zealand Cluster Munitions Coalition, Submission 6, p. [4],

76 Submitter 16 for example highlighted the obligations of states parties in relation to victim assistance under the Convention and commitment to respond (Submission 16, p. [2]). See also Act for Peace in relation to stockpile destruction, clearance and risk reduction education (Submission 17, p. [4]). Afghan Landmine Survivors' Organization also supported recognition of victim assistance as well as provisions for cooperation and universalisation of the treaty in the bill (Submission 13, p. 3).

77 Australian Lawyers for Human Rights, Submission 19, p. [2],

encourage universalisation of the treaty.78 To this end, Mrs Lorel Thomas, Cluster Munition Coalition argued that a stand-alone piece of legislation would more easily allow for the inclusion of both positive obligations and an objects clause as opposed to

an amendment to the Code.79

The government's position on positive obligations

4.47 In response to criticism that the bill does not reconcile or balance the respective obligations in Article 21 with the interoperability provision, Defence emphasised that the obligation on Australia to exert influence in discouraging the use of cluster munitions will 'not preclude our continued ability to engage in military cooperation and operations' with non-states parties.80 Similarly, AGD's Mr Manning argued that there was no inconsistency between the authority to assist non-states

parties who may use cluster munitions with that of obligations to discourage the use of cluster munitions:

Obviously Australia's obligations under the convention are of equal weight. However, there is no prohibition on Australia in relation to the type of conduct that we are talking about. It may choose to implement its

obligations under article 21(2) in a number of ways, but the convention itself reflects a balance here and acknowledges that whilst states are doing that they are not prohibited from engaging in the type of conduct accepted in the later clauses in article 21.81

4.48 AGD also warned that the inclusion of a reference to paragraphs 1 and 2 of Article 21 in the bill would 'risk curtailing the considerable discretion available to States Parties as to the means of discharging these obligations'.82

4.49 The government emphasised that the purpose of the bill is to amend the Criminal Code Act 1995 (the Code) to ensure consistency between Australian law and the Convention by creating offences and penalties in relation to cluster munitions. AGD emphasised that the bill should, therefore, only contain those provisions necessary to give effect to the Convention. In this regard, positive obligations 'do not require legislative implementation, and can be implemented through administrative and other means'.83

4.50 Furthermore, an objects clause was not considered necessary by the government because the bill already contains a clause that sets out the purpose of the

78 Human Rights Watch and International Human Rights Clinic, Submission 7, p. 1; Australian Network to Ban Landmines and Cluster Munitions, Submission 3, p. [10].

79 Lorel Thomas, Cluster Munition Coalition, Committee Hansard, 3 March 2011, p. 7.

80 Department of Defence, Additional information, received 2 March 2011, pp. 2-3.

81 Greg Manning, Attorney-General's Department, Committee Hansard, 3 March 2011, p. 19.

82 Attorney-General's Department, Additional information, received 28 February 2011, pp. 5-6.

83 Attorney-General's Department, Additional information, received 28 February 2011, p. 8.

bill's provisions and that an additional 'objects' clause would simply add to the complexity of the legislation.84 In addition, Mr Greg Manning, First Assistant Secretary of AGD, clarified that there was no legal effect in proceeding with a standâ alone piece of legislation as opposed to an amendment to the Code:

The government thinks that an amendment to the Criminal Code is the most appropriate and efficient way to give effect to those parts of the convention that require legislative implementation. Importantly, there is no legal effect in proceeding with this course as compared to having a stand-alone piece of legislation. The impact is the same in that it prohibits that conduct that Australia has an obligation to prohibit under the convention.85

Realising Australia's positive obligations

4.51 DFAT highlighted that the clearest demonstration of Australia's intent to fulfil the Convention's positive obligations under Article 21 was the signing of the Convention on 3 December 2008 which implies that Australia is 'bound to comply with the spirit and intent of the Convention and is obliged not to act in a manner inconsistent with the Convention'.86 Indeed, the government has stated its commitment to a 'world free from cluster munitions'.87

4.52 In regard to realising all the Convention's positive obligations, DFAT assured the committee that the obligations will be adhered to in the same manner as with other disarmament treaties including the Land Mine Treaty.88 In terms of how Australia will fulfil its obligations in practice, AGD asserted that:

Australia will comply with its obligations under paragraphs 1 and 2 of Article 21 as appropriate opportunities arise, and consistently with its implementation of similar obligations in other international disarmament instruments. In formal and informal diplomatic and other contacts,

Australia will urge States not party to the Convention not to use cluster munitions and encourage them to accede to the Convention. Australia will also continue to work with non-government organisations, which make a significant contribution to universalisation. Australia will also make clear to non-States Parties our obligations under the Convention, including when engaged in military cooperation and operations with non-States Parties.89

4.53 DFAT also noted that whilst it will have primary carriage of realising these obligations, it will work with other agencies, including Defence, to ensure that they take advantage of all relevant and appropriate opportunities to promote universal

84 Greg Manning, Attorney-General's Department, Committee Hansard, 3 March 2011, p. 24.

85 Greg Manning, Attorney-General's Department, Committee Hansard, 3 March 2011, p. 17.

86 Department of Foreign Affairs & Trade, Additional information, received 1 March 2011, p. 11.

87 Department of Foreign Affairs & Trade, Additional infonnation, received 1 March 2011, p. 5.

88 Department of Foreign Affairs & Trade, Additional infonnation, received 1 March 2011, p. 3.

89 Attorney-General's Department, Additional information, received 28 February 2011, pp. 5-6.

adherence to the Convention.90 In terms of military engagement with non-states parties, DFAT clarified that:

...the limitations contained in the Bill will be reflected in ADF doctrine, procedures, rules and directives. This will ensure that Australia and Australians will act consistently with the object and purpose of the Convention (including paragraphs 1 and 2 of Article 21), including when

undertaking cooperative activities with countries that are not obliged to comply with the Convention.91

4.54 As noted earlier in this chapter, the ADF is experienced at incorporating the requirements of weapons treaties into doctrine and procedures and at complying with such requirements during coalition operations.

4.55 AGD also emphasised that whilst the Convention gives considerable discretion as to the means of discharging the positive obligations, Australia will implement its obligations in a manner appropriate to each obligation. It noted further

that Australia already implements obligations under Article 6 to provide 'technical, material and financial assistance to States Parties affected by cluster munitions through the Mine Action Strategy for the Australian aid program'.92 Moreover, Australia is already playing a constructive role in relation to Article 5 concerning victim assistance including through Australia's Mine Action Strategy for which Australia has pledged $100 million to work towards a world free of landmines, cluster munitions and other explosive remnants of war.93

Committee view

4.56 The committee recognises the complexities surrounding military relations with non-states parties and appreciates the need for a balance between security and humanitarian concerns. It acknowledges that without interoperability, the ability of Australia to engage with military allies in bilateral and multinational operations would be severely undermined if not impossible. It also appreciates that provision for military cooperation and operations with non-states parties is essential to the protection of international security, national security and the lives of ADF personnel.

4.57 The committee recognises that in seeking to amend the Criminal Code Act 1995, the bill gives effect to Convention obligations on states parties under Article 9 to impose penal sanctions to prevent and suppress prohibited activities whilst establishing respective defences.

4.58 Notwithstanding this, the committee acknowledges the strong concerns of submitters regarding the need to balance the explicit defences in relation to

90 Department of Foreign Affairs & Trade, Additional information, received 1 March 2011, p. 5.

91 Department of Foreign Affairs & Trade, Additional information, received 1 March 2011, p. 5.

92 Attorney-General's Department, Additional information , received 28 February 2011, p. 8.

93 Department of Foreign Affairs & Trade, Additional information, received 1 March 2011, p. 10.

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engagement with non-states parties to the Convention with Australia's positive obligations as a state party to actively pursue universal elimination of cluster munitions. Moreover, this bill cannot be considered in isolation from other positive measures that Australia has taken, and has pledged to undertake, to rid the world of cluster munitions. In this context, the committee acknowledges Australia's international standing in demining and victim assistance in particular. The committee is satisfied, moreover, that positive obligations are a matter of administrative rather than legislative action.

4.59 Given the extent of the concerns raised in evidence on the need to balance the four respective provisions of Article 21, the committee recognises that the article's positive obligations serve as a compelling incentive to ensure that states parties and their personnel engaged in joint military operations abide by the spirit of the Convention. When taken in this broader context, the committee is satisfied that the concerns about a lack of balance or silence on positive obligations in the bill are resolved.

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Chapter 5

Transit, retention and stockpiling of cluster munitions on Australian territory by non-states parties

5.1 Section 72.42 of the bill provides defences for the stockpiling, retention and transit of cluster munitions by military personnel of non-states parties on Australia territory. In considering this provision within the context of joint military operations with states not party to the Convention, the chapter considers the manner in which the transit, retention and stockpiling of foreign cluster munitions has been interpreted

internationally before considering the evidence before the committee and the government's position in relation to it.

Interpreting the Convention

5.2 For the puiposes of the Convention, the transit, retention and foreign stockpiling of cluster munitions are interpretive issues. The definition of 'transfer' in Article 2 of the Convention does not make explicit that the transit of cluster munitions through the territory of a state party is either prohibited or permissible. For this reason, different interpretations of the prohibition on assistance in Article 1(1 )(c) have been applied to the issue of cluster munitions transit. Similarly, Article 21(3) concerning interoperability leaves scope to interpret states parties' relations with non-states parties including that in relation to the transit and stockpiling of cluster munitions when engaged in joint operations.

5.3 Austria and Germany have banned the transit of foreign cluster munitions in their implementation legislation.1 A number of other states including Bulgaria, Madagascar, Malta, and Mexico have indicated that they interpret the Convention to proscribe transit and stockpiling of foreign-owned cluster munitions on the territory of

a states party.2 Whilst a specific prohibition on the transit of cluster munitions into French law was rejected on the basis that transit would be difficult to control, the Secretary of State for Defence noted that France will endeavour to prevent any state transit of cluster munitions on its territory. It would make known its obligations and

1 Human Rights Watch, Promoting the Prohibitions, The Need for Strong Interpretations of the Convention on Cluster Munitions, November 2010, p. 8, http://www.hrw.org/en/news/2010/ll/06/piOmoting-PiOhibitions (accessed 18 January 2011).

2 Human Rights Watch, Promoting the Prohibitions, Tim Need for Strong Interpretations of the Convention on Cluster Munitions, November 2010, pp. 8-9, http://www.hrw.org/en/news/2010/ll/06/piOmoting-PiOhibitions (accessed 19 January 2011).

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commitments through diplomatic channels, and encourage other countries to respect them.3

5.4 The Netherlands in contrast has taken the view that the transit (or physical movement) across Dutch territory of cluster munitions of non-states parties is not prohibited but that the transfer (of ownership) of such munitions is.4 In addition, whilst the Netherlands has stated that there is no foreign stockpiling on its territory, it

does not consider such storage by non-states parties to be prohibited under the Convention provided that the munitions remain under the ownership of that non-state party.5 Similarly, Portugal has taken the view that the Convention does not unequivocally exclude the possibility of foreign stockpiling and transit with the qualification that transit is permissible only in circumstances where the cluster munitions in question remain under the control of the non-state party which requested their passage.6

Section 72.42

5.5 Section 72.42 provides a defence in relation to the transit, retention and stockpiling of cluster munitions by non-states parties where such acts carried out in the course of military cooperation or operations with the ADF. It provides that military personnel of non-states parties can raise the defence in relation to the

stockpiling, retention or transfer of cluster munitions when they are on a base, aircraft or ship in Australian territory.7 The provision is consistent with the government's interpretation of the Convention that the continuation of military cooperation and operations with non-states parties is expressly permitted under Article 21(3). Moreover, the defence recognises the government's position that military personnel of a country not party to the Convention are not required to comply with it.8

3 International Campaign to Ban Landmines and Cluster Munition Coalition, Cluster Munition Monitor 2010, Country Profile - France, October 2010, http://www.the- monitor.org/index.php/cp/displav/region profiles/theme/144# ftnref26 (accessed 19 January 2011).

4 International Campaign to Ban Landmines and Cluster Munition Coalition, Banning Cluster Munitions: Government Policy and Practice, Global Overview of Government Policy and Practice, 2009, http://www.the-monitor.org/index.php/publications/displav?ur]=cm/2009 (accessed 18 January 2011).

5 International Campaign to Ban Landmines and Cluster Munition Coalition, Banning Cluster Munitions: Government Policy and Practice, Netherlands, 2009, http://www.the- monitor.org/index.php/cp/displav/region profiles/theme/595 (accessed 18 January 2011).

6 International Campaign to Ban Landmines and Cluster Munition Coalition, Cluster Munitions Monitor 2010, Portugal, http://www.the-monitor.org/custom/index.php/region profiles/print theme/582 (accessed 18 January 2011).

7 Criminal Code Amendment (Cluster Munitions Prohibition) Bill 2010, ss. 72.42(l)(b).

8 Explanatory Memorandum, Criminal Code Amendment (Cluster Munitions Prohibition) Bill 2010, p. 2.

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5.6 The explanatory memorandum clarifies that the definition of 'transfer' in the bill reflects the meaning given by Article 2(8) of the Convention and includes either physical movement into or from national territory or transfer of title and control.9 Rather than distinguish transfer from transit, Australia's interpretation is consistent with the common interpretation of the Mine Ban Treaty's definition.

5.7 Whilst the defence applies to military personnel of countries that are not party to the Convention in relation to the stockpiling, retention and transfer of cluster munitions, it does not apply in relation to the use, development, production or acquisition of cluster munitions whilst such personnel are in Australian territory. As the explanatory memorandum highlights, such conduct 'remains prohibited to the military personnel of countries not party to the Convention while they are in Australian territory'.10

Evidence

5.8 Many submitters were concerned about the scope of the section 72.42 defence and the implications of providing explicitly for the stockpiling, retention and transit of cluster munitions by military personnel of non-states parties on Australian territory. The Australian Red Cross argued that this provision 'allows acts generally prohibited

in the Convention to occur on the territory of a State party'.11 Other submitters took the view that allowing foreign stockpiling and the transit of such weapons through Australian airspace and water would undermine Article 9 specifically and the objectives of the Convention more broadly whilst contributing to the continued use of the weapons.12 The International Committee of the Red Cross (ICRC) held that it would be difficult to reconcile the broad exemptions under this provision with the obligations under paragraphs 1 and 2 of Article 21 to promote the norms of the Convention and discourage non-states parties from using the munitions.13 14 The ICRC continued that Article 21 was not meant to ensure that military cooperation and operations were unaffected by the Convention and that the provision permitted acts, prohibited by the treaty, to occur on territory under the jurisdiction and control of a state party. ALHR held the view that it was:

9 Explanatory Memorandum, Criminal Code Amendment (Cluster Munitions Prohibition) Bill 2010, p. 18.

10 Explanatory Memorandum, Criminal Code Amendment (Cluster Munitions Prohibition) Bill 2010, p. 15.

11 Australian Red Cross, Submission 21, p. 3.

12 See for example, Australian Network to Ban Landmines and Cluster Munitions, Submission 3, p. [5]; Human Rights Watch and International Human Rights Clinic, Submission 7, p. 8; Australian Lawyers for Human Rights, Submission 19, p. [2]; Union Aid Abroad-AP*Ã³EDA, Submission 12, p. [3]; Oxfam Australia, Submission 14, p. 3; Afghan Landmine Survivors' Organization, Submission 13, p. 2; Medical Association for Prevention of War (Australia), Submission 15, p. 5; Aotearoa New Zealand Cluster Munitions Coalition, Submission 6, p. [3],

13 International Committee of the Red Cross, Submission 9, p. 4.

14 International Committee of the Red Cross, Submission 9, p. 4.

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...simply unconscionable that a state which has committed itself to the universal eradication of these weapons and the promotion of the treaty's humanitarian norms would allow for cluster munitions to be brought to, transferred and retained on its territory...The use of Australian infrastructure and territory amounts to clear assistance in breach of article 1, and facilitates the proliferation of cluster munitions, thereby defeating the object and purpose of the Convention, in addition to breaching articles 1 and 9.15

5.9 The ICRC as well as Human Rights Watch and IHRC noted that the bill goes further in this area than the legislation of other common law countries as Australia is believed to be the only state that will explicitly allow for foreign stockpiling in its implementation legislation.16 The ICRC argued that the legislation of New Zealand and Ireland respectively 'do not contain provisions excluding the application of their laws to foreign forces or vehicles on their territory'. The ICRC noted that the UK legislation creates 'defences for visiting forces of non-states parties for actions relating to the possession and transfer of a cluster munition as well as assisting, encouraging or inducing any other person to engage in any act that is prohibited'. Even so, according to the ICRC, the UK has 'indicated that it has requested the removal of foreign stockpiles of cluster munitions from UK territories within the 8 year period allowed for stockpile destruction in the Convention'.17

5.10 A number of witnesses suggested that the section 72.42 defence be deleted and replaced with specific wording prohibiting the transit, retention and stockpiling by military personnel of non-states parties on Australian territory.18 Whilst agreeing with this suggestion, Human Rights Watch and the IHRC proposed as an alternative, the removal of subsection 72.41(1) which specifically allows for transit and foreign

stockpiling on Australian territory.19

The government's position

5.11 The government's position is that as military personnel of non-states parties are not required to comply with the Convention's obligations, they should not, therefore be subject to section 72.38 offences.20 As Defence stated in evidence to the

15 Australian Lawyers for Human Rights, Submission 19, p. [12].

16 Human Rights Watch and International Human Rights Clinic, Submission 7, p. 10.

17 International Committee of the Red Cross, Submission 9, p. 4.

18 Australian Network to Ban Landmines and Cluster Munitions Inc, Submission 3, pp. [6-7]; Oxfam Australia, Submission 14, p. 3; International Committee of the Red Cross, Submission 9, p. 5; Medical Association for Prevention of War (Australia), Submission 15, p. 5; Aotearoa New Zealand Cluster Munitions Coalition, Submission 6, p. [3]; Cluster Munition Coalition, Submission 22; Union Aid Abroad-APHEDA, Submission 12, p. [3]; Australian Red Cross, Submission 21, p. 3; Human Rights Watch and IHRC, Submission 7, p. 10; CBM Australia, Submission 11, p. 3.

19 Human Rights Watch and International Human Rights Clinic, Submission 7, pp. 9-10.

20 Explanatory Memorandum, Criminal Code Amendment, (Cluster Munitions Prohibition) Bill 2010, p. 14.

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committee, it is not appropriate to require military personnel of non-states parties to comply with an international legal obligation to which their own country has not consented.21 Furthermore, the defence is consistent with the government's interpretation of the Convention that military cooperation and operations with nonâ

states parties are expressly permitted by Article 21 and that such cooperation may entail the use by foreign states of bases on Australian territory or the entry of foreign ships or aircraft into Australian territory.22 As Defence emphasised, the ability to maintain interoperability with non-states parties is 'central to the protection of international security, as well as Australia's national security'.23 However, in accordance with Article 21(4), non-states parties would not be excluded from prosecution 'if they use, develop, produce or acquire cluster munitions in Australia'.24

5.12 Contrary to the views of many submitters, the government argued that section 72.42 is consistent with Article 9 of the Convention as the offences created in the bill 'apply to all persons on Australian territory and, under certain circumstances, to persons outside of Australia'.25 Furthermore, AGD emphasises that Article 9 must be read alongside Article 21 and that the defence in the bill:

...recognises that it is not appropriate to require military personnel of nonâ States Parties to comply with an international legal obligation to which their sending country has not consented. Nonetheless, such visiting forces would not be excused from prosecution for the offences contained in the Bill if they use, develop, produce or acquire cluster munitions in Australia.26

5.13 In response to concerns raised in submissions regarding foreign stockpiling and how such a defence could be reconciled with the fact that Australia does not itself currently have an operational stockpile of cluster munitions, DFAT stated:

The issue of domestic and foreign stockpiles of cluster munitions are separate. Australia does not have any operational stockpiles of cluster munitions and is committed to a world free from cluster munitions. However, Australia recognises that some non-States Parties to the Convention *including Australia's allies *may continue to use cluster munitions.27

21 Department of Defence, Additional information, received 2 March 2011, p. 5.

22 Department of Defence, Additional information, received 2 March 2011, p. 5. See also, Attorney-General's Department, Additional information, received 28 February 2011, p. 7.

23 Department of Defence, Additional information, received 2 March 2011, p. 5.

24 Explanatory Memorandum, Criminal Code Amendment, (Cluster Munitions Prohibition) Bill 2010, p. 14; Department of Foreign Affairs & Trade, Additional information, received 1 March 2011, p. 7.

25 Attorney-General's Department, Additional information, received 28 February 2011, pp. 6 -7.

26 Attorney-General's Department, Additional information, received 28 February 2011, p. 7.

27 Department of Foreign Affairs & Trade, Additional information, received 1 March 2011, pp. 8-9.

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5.14 When questioned about the practical application of the defence, Lieutenant General David Hurley, Vice Chief of the Defence Force (VCDF) stated that Australia is 'not stockpiling cluster munitions on behalf of anybody' and when asked whether US cluster munitions get transhipped through Australian territory, VCDF explained that if'US forces are transiting Australian airspace or sea passage there is a possibility they will have them on board'.28

5.15 Again, it is important to read this provision on the stockpiling and retention of cluster munitions in light of Australia's obligation to 'exert influence where appropriate in discouraging the use of cluster munitions'.29 According to Defence, this obligation may be discharged, for example, in 'bilateral or multilateral spheres through oral or written communications aimed at dissuading or advising States not party to the Convention against cluster munitions'.30 AGD and DFAT also stated that Australia would comply with its obligations under Article 21(1) and (2) as appropriate opportunities arise and consistently with its implementation of similar obligations in other international disarmament instruments. They stated further that 'in formal and informal diplomatic and other contacts, Australia will urge States not party to the Convention not to use cluster munitions and encourage them to accede to the convention'. DFAT added:

Australia will also make our obligations under the Convention clear to nonâ State Parties. When engaged in military cooperation, the limitations contained in the Bill will be reflected in ADF doctrine, procedures, rules and directives. This will ensure that Australia and Australians will act consistently with the object and purpose of the Convention (including paragraphs 1 and 2 of Article 21), including when undertaking cooperative

activities with countries that are not obliged to comply with the

Convention.31

5.16 In this regard, it is important to note that according to Defence and DFAT:

All munitions owned by foreign armed forces that are stored on Australian soil are required to be managed as 'Commonwealth Explosives', in accordance with the Explosives Act 1961, and its subordinate regulations and codes. This requires specific approval for the storage and transportation of these munitions, and their inclusion in Defence information holdings. Additionally, they are stored in Defence facilities licensed to store explosive ordnance, and are managed on the Computer System for

Armaments. Consequently, Defence both approves and has full visibility of all foreign armed forces munitions that are stored on Australian soil.

28 Lieutenant General David Hurley, Department of Defence, Committee Hansard, 3 March 2011, p. 22.

29 Department of Defence, Additional information, received 2 March 2011, pp. 2-3.

30 Department of Defence, Additional information, received 2 March 2011, p. 3.

31 Department of Foreign Affairs & Trade, Additional information, received 1 March 2011, p. 4.

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No foreign armed force will be approved to fire cluster munitions on any Australian training range. All munitions fired on Australian training ranges by foreign aimed forces are required to comply with the requirements specified and prohibitions for each range by the Director of Operations and Training Area Management.32

Committee view

5.17 The committee appreciates that section 72.42 is consistent with the government's position on interoperability. The committee also notes the statements by AGD, Defence and DFAT providing assurances that Australia 'would comply with its obligations under Article 21(1) and (2) as appropriate opportunities arise'. Australia is not exempt from these obligations when it comes to non-states parties stockpiling or

retaining cluster munitions on Australian territory or allowing them to transit cluster munitions through Australian airspace and water.

5.18 The Australia Government might help to allay people's concerns about the operation of sections 72.41 and 72.42 by better publicising the work that it is doing to encourage non-party states to adhere to, or endorse, the Convention and the way it uses its best efforts to discourage others from using cluster munitions.

32 Department of Defence, Additional information , received 2 March 2011, p. 5; Department of Foreign Affairs & Trade, Additional information, received 1 March 2011, p. 9.

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Chapter 6

Investment in cluster munitions production

6.1 This chapter explores the issue of investment in the production of cluster munitions with focus on the bill's provisions. It considers the legislation of other states parties to the Convention, Australia's position and the evidence on investment in

cluster munitions production.

Provisions of the bill

6.2 According to subsection 72.38(2) of the bill, a person (the first person) commits an offence if:

(a) the first person assists, encourages, or induces another person to do any of the following acts with a cluster munition:

(i) uses it;

(ii) develop, produce or otherwise acquire it;

(iii) stockpile or retain it;

(iv) transfer it to anyone; and

(b) the other person does the act; and

6.3 In the second reading speech in relation to the bill the Attorney-General provided an example of conduct that would fall within this offence:

...where a person provides financial assistance to, or invests in, a company that develops or produces cluster munitions, but only where that person intends to assist, encourage or induce the development or production of cluster munitions by that company.1

6.4 For the offence to have been committed there must be intent on the part of the individual to provide financial assistance to an entity so that the entity can develop or produce cluster munitions. However, as the joint government submission highlighted, 'accidental or innocent acts of assistance, encouragement or inducement will not fall within the offences' of the bill.2

Interpreting the Convention

6.5 A number of countries have interpreted the Convention's prohibitions to include investment in companies that manufacture cluster munitions or components on

1 Attorney-General, Second Reading Speech, House Hansard, 27 October 2010, p. 8.

2 Attorney-General, Minister for Foreign Affairs, Minister for Defence, Submission 24, p. 4.

the basis that such investment amounts to a form of assistance with production otherwise prohibited under Article 1. Many have prohibited investment in cluster munitions production in their implementation legislation including Belgium which adopted a law in 2007 prohibiting financial institutions, whether public or private,

from investing in companies that produce cluster munitions. France's legislation bans both direct and indirect financing of cluster munitions production.3 Luxembourg and New Zealand have criminalised investment by public or private entities in companies

that produce cluster munitions whilst Ireland banned investment of public money in cluster munitions producers.4

6.6 Clause 10(2) of New Zealand's Cluster Munitions Prohibition Act 2009 states that a person ' who provides or invests funds with the intention that the funds be used, or knowing that they are to be used, in the development or production of cluster munitions' commits an offence. The Act provides an extensive definition of what a

fund is and includes clear sanctions.5 However, New Zealand is yet to detail how it will ensure compliance with these provisions as the Act does not require the government to identify and maintain a list of cluster munition producers.

6.7 In contrast, whilst the UK Cluster Munitions (Prohibition) Act 2010 prohibits the direct financing of cluster munitions production, it does not prohibit indirect financing of cluster munitions.6 The view of the UK Government reflected in the Act is that the Convention only bans the provision of funds which directly contribute to the manufacture of cluster munitions.7 The passage of the bill through the House of

3 Human Rights Watch, Promoting the Prohibitions, The Need for Strong Interpretations of the Convention on Cluster Munitions, November 2010, p. 10, http://www.hrw.org/en/news/2010/11/06/promoting-prohibitions (accessed 14 December 2010).

4 Human Rights Watch, Promoting the Prohibitions, The Needfor Strong Interpretations of the Convention on Cluster Munitions, November 2010, p. 10, http://www.hrw.org/en/news/2010/11/06/promoting-prohibitions (accessed 14 December 2010).

5 Cluster Munition Coalition and International Campaign to Ban Landmines, Cluster Munition Monitor 2010, Cluster Munition Ban Policy * New Zealand, http://www.the- monitor.org/index.php/cp/display/region profiles/theme/564 (accessed 9 December 2010).

6 Foreign and Commonwealth Office, The Financing of Cluster Munitions Production, Written Ministerial Statement, 7 December 2009, http://www.stopexplosiveinvestments.org/uploads/pdf/UK%20Ministerial%20statement.pdf (accessed 9 December 2010).

7 Jon Lunn, Cluster Munitions (Prohibitions) Bill [HL], Research paper 10/11, House of Commons Library, 11 February 2010, p. 7, http://www.parliament.uk/briefingpapers/commons/lib/research/rp2010/RP10-011.pdf (accessed 12 January 2011).

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Lords, however, generated widespread concern about the issue of indirect financing.8 On 7 December 2009, the UK Government announced to Parliament that it would work with the financial sector, non-government organisations and other interested parties to promote a voluntary code of conduct to prevent indirect financing of cluster munitions.9 Whilst 'it would not become illegal to provide funds generally to companies that manufacture a range of goods, including cluster munitions', the UK Government recognised a need to establish measures to end indirect financing of cluster munitions. It took the view that a thorough consultation was needed in the first instance given the complex nature of indirect financing.10

Joint Standing Committee on Treaties and Government response

6.8 In its inquiry on the Convention, JSCOT queried whether investment by Australian entities in companies that develop or produce cluster munitions would be viewed as assisting the production of cluster munitions, and if so, whether such investment would be criminalised.11 DFAT responded that the Convention does not

explicitly prohibit investment in companies that develop or produce cluster munitions, nor does it define the term 'assist'. It noted, however, that Australia had interpreted 'assist' to mean direct physical participation in any activity prohibited under the Convention.12

6.9 In light of its concern that terms contained in the Convention were not clearly defined and noting that the interpretation of terms such as 'assist' will need to be considered in the development of legislation, JSCOT recommended that the Australian Government have regard to:

preventing investment by Australian entities in the development or production of cluster munitions, either directly, or through the provision of funds to companies that may develop or produce cluster munitions.13

8 Jon Lunn, Cluster Munitions (Prohibitions) Bill [HL], Research paper 10/11, House of Commons Library, 11 February 2010, p. 24, http://www.parliament.uk/briefingpapers/commons/lib/research/ro2010/RP10-01 l.ndf (accessed 12 January 2011),

9 Foreign and Commonwealth Office, 'Cluster bombs ban moves a step closer', Press Release, 17 March 2010, http://www.fco.gov.uk/en/news/latest-news/?view=News&id=21900970 (accessed 9 December 2010).

10 Foreign and Commonwealth Office, 'The Financing of Cluster Munitions Production', Written Ministerial Statement, 7 December 2009, http://www.stopexplosi veinvestments.org/uploads/pdf/UK%20Ministerial%20statement.pdf (accessed 9 December 2010).

11 Joint Standing Committee on Treaties, Report No 103, Treaties tabled on 12 March and 13 May 2009, 18 August 2009, p. 23.

12 Joint Standing Committee on Treaties, Report No 103, Treaties tabled on 12 March and 13 May 2009, 18 August 2009, p. 23.

13 Joint Standing Committee on Treaties, Report No 103, Treaties tabled on 12 March and 13 May 2009, 18 August 2009, p. 27.

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Evidence

6.10 The majority of submitters argued in favour of an explicit prohibition on both direct and indirect investment in the production of cluster munitions with many supporting the realisation of JSCOT's recommendation 2 in the bill.14 For example, ALHR held that an explicit prohibition on investment in statutory form would:

provide clarity to the definition of the term 'assist' and give guidance to the prosecution, defence and judiciary in any future proceedings. At present, these matters rely entirely upon prosecutorial policy and eventual judicial interpretation, thereby creating an unnecessary level of uncertainty.15

6.11 Act for Peace argued for a more comprehensive legal framework beyond that of the suite of criminal offences of the bill and held that the government should consult with investor stakeholders in order to establish such a framework including a ban on investment and framework for divestment.16

6.12 Human Rights Watch and IHRC agreed that the bill should explicitly ban investment because it assists with a prohibited act. In their view, production cannot be curtailed and cluster munitions eliminated if a state party allows direct or indirect

financial support to manufactures of cluster munitions. They further noted that as private investors often provide important financial support to such companies, the ban should extend to private funds.17 Mr Robert Rands argued that a prohibition on Australian investment in off-shore manufacturers of cluster munitions would in the long run, decrease the 'amount of foreign aid we so generously expend on removing explosive remnants of war, and on aiding survivors and their communities in affected areas'.18

6.13 The Australian Council of Super Investors (ACSI) raised a number of issues in its evidence which were pursued by the committee. The ACSI noted that the bill would make it illegal for a person or bank to provide financial assistance to, or invest in a company that develops or produces cluster munitions but 'only where that person or bank intends to assist, encourage or induce the development or production of

14 Sally McGushin, Submission 1; Willy Bach, Submission 2; Australian Council of Superannuation Investors, Submission 4 ; Robert Rands, Submission 5; Aotearoa New Zealand Cluster Munitions Coalition, Submission 6, pp. [3Mâ]; Uniting Church in Australia-Synod of Victoria and Tasmania, Submission 8, p. 1; Quaker Peace and Justice Committee, Submission

10; CBM Australia, Submission 11, p. 3; Union Aid Abroad *APHEDA, Submission 12, p. [1]; Australian Lawyers for Human Rights, Submission 19, p. [2]; Law Council of Australia, Submission 20, p. 12; Oxfam Australia, Submission 14, p. 3, Adrian von der Borch, Submission 25.

15 Australian Lawyers for Human Rights, Submission 19, p. [13].

16 Act for Peace, Submission 18, p. 4.

17 Human Rights Watch and International Human Rights Clinic, Submission 7, p. 13.

18 Robert Rands, Submission 5, p. [2],

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cluster munitions by that company'.19 The concern of ACSI is that the bill's drafting implies that financial assistance is illegal only if it is provided 'solely for the purpose of cluster bomb production and with recourse only to that activity' and yet it was not aware that direct financing of cluster munitions actually exists.20 Mr Azhar Abidi from ACSI clarified the term 'direct investment':

If there is a company out there that is producing only cluster bombs-that is its sole line of business-and you want to invest in that company because you want to buy shares and you want to get a return on investment from the production and sale of cluster bombs, then that is a direct investment.21

6.14 To support their argument, ACSI drew on the findings of a report by IKV Pax Christi and Netwerk Vlaanderen which identified only seven companies worldwide that produce cluster munitions. Moreover, as they are diversified conglomerates and do not source direct finance solely for the production of cluster munitions, the production of cluster munitions is only one component of their overall operations.22

6.15 The ACSI further argued that it was not practical to restrict weapons producers from using corporate lending facilities for the purpose of producing cluster munitions. It noted, however, that it was 'highly likely that weapons producers will

increasingly shift to indirect financing of controversial munitions to avoid reputational damage'. This presents what ACIS called a 'major loophole1 in the bill as most financing is indirect.23 Citing evidence from the IKV Pax Christi and Netwerk Vlaanderen report which established that 146 identified financial institutions have provided over US $43 billion of investments and financial services to the seven cluster bomb producers, ACIS argued that:

Companies source financing through corporate loans, syndicated loans, rights issues, new equity and raising through other securities and unless there is a mechanism to restrict weapons producers from using such financing towards the production of cluster munitions, the legislation will

not be effective in complying with the spirit of the CCM.24

19 Australian Council of Superannuation Investors, Submission 4, p. [1].

20 Australian Council of Superannuation Investors, Submission 4, p. [ 1 ].

21 Azhar Abidi, Australian Council of Superannuation Investors, Committee Hansard, 3 March 2011, p. 15.

22 Australian Council of Superannuation Investors, Submission 4A, [1], See also IKV Pax Christi and Netwerk Vlaanderen, Worldwide Investments in Cluster Munitions: A Shared Responsibility, April 2010, p. 8, http://www.ikvpaxchiisti.nl/files/DocumentenAvap%20cluster%20inunitie/Clustennunition/Sto p%20Explosive%20Investments/2010%20Worldwide%20Investments%20in%20Cluster%20M unitions%20-%20Apnl%202010%20update%20full%20report%20DEF.pdf (accessed

15 December 2010).

23 Australian Council of Superannuation Investors, Submission 4, p. [1].

24 Australian Council of Superannuation Investors, Submission 4, pp. [1-2],

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6.16 The ACSI held that unless a mechanism is introduced into the bill to restrict weapons producers from using such financing towards the production of cluster munitions, the legislation will not be effective. It argued that unless the loophole is

closed, it is likely that 'capital from Australian investors or Australian companies in unit trusts, superannuation funds and other forms will continue to be used indirectly in the production of cluster bombs around the world'.25

6.17 In relation to the question of clear intent, the ACSI held the view that individual investors in a trust fund cannot be held accountable for the operations of the companies in a unit trust. It recognised that it would not be likely for such individuals to be informed of the companies' operations in great detail and that individual investors would rarely have the voting power to influence the corporate behaviour of the companies they invest in. However:

On the other hand, the brokers, fund managers and investment banks who sell such unit trusts in Australia can ensure that they do not provide

exposure to companies that breach the Bill. Similarly, the super funds can ensure that they do not expose their members to companies that breach the Criminal Code Amendment by excluding companies that are involved in cluster bomb production from their investment portfolios. Only by making

such a restriction a legislative requirement can the Commonwealth ensure that Australian companies-banks, fund managers, brokers and other financial institutions-do not provide advertent or inadvertent assistance to cluster bomb producers.26

6.18 ACSI argued that the bill should not be restricted to persons or companies who intended to assist, encourage or induce the development or production of cluster munitions. It noted that companies would rarely, if ever, solicit direct funding for the

development or production of controversial weaponry and would rarely provide such funding in light of the controversy surrounding cluster munitions. However, it argued that as it is 'extremely likely' that companies will continue to use general corporate loans and equity towards producing cluster munitions that would not attract direct funding. Therefore, ASCI argued that the bill must restrict the ability of cluster bomb

producers to secure any capital from Australian investors by 'making it illegal for Australian investors to provide financing to such companies'.27ASCI held that the restriction should apply to all Australian institutions regulated by ASIC or APRA and that under its proposal:

...these institutions will be prohibited in trading in securities or investing monies (their own or on behalf of their clients) in companies that produce cluster bombs. Finally, under our proposal, the Bill will contain a Schedule

25 Australian Council of Superannuation Investors, Submission 4, p. [3].

26 Australian Council of Superannuation Investors, Submission 4, p. [3].

27 Australian Council of Superannuation Investors, Submission 4 , p. [3].

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with a list of such companies that will be updated by the Commonwealth as required.28

The government *s position

6.19 The government takes the view that an explicit prohibition on investment in companies that develop or produce cluster munitions is not appropriate because the Convention does not contain such a provision.29 In this regard, AGD highlighted that

the bill gives effect to the Convention in Australian law and that it is both guided and limited by the Convention's contents.30

6.20 Proposed subsection 72.38(1) of the bill creates the offence of developing or producing cluster munitions and according to the AGD, the operation of the Code's ancillary offence means that:

...a person who aids, abets, counsels or procures the commission of this offence commits an offence. In addition, proposed subsection 72.38(2) creates the offence of assisting, encouraging or inducing the development

or production of cluster munitions.31

6.21 Rather than expressly prohibiting investment, Article 1 prohibits the direct or indirect development or production of cluster munitions and the provision of assistance, encouragement or inducement to anyone engaged in such activities. The bill uses therefore the language of the Convention in order to ensure that any conduct prohibited by the Convention is the subject of a criminal offence under Australian law, as required by Article 9.32 In terms of acts of investment that will fall within the proposed offence, AGD provided an example:

The intentional provision of financial assistance to an entity so that the entity can develop or produce cluster munitions will amount to an

offence.33

6.22 In relation to offences that will probably fall outside the proposed offence, these include accidental or innocent acts of assistance, encouragement or inducement including as the joint submission noted:

For example, a person who contributes to a superannuation fund which includes investment in companies that may develop or produce cluster

28 Australian Council of Superannuation Investors, Submission 4, p. [3].

29 Department of Foreign Affairs & Trade, Additional information, 1 March 2011, pp. 11-12.

30 Attorney-General's Department, Additional information, received 28 February 2011, p. 9.

31 Attorney-General's Department, Additional information, received 28 February 2011, p. 9.

32 Department of Foreign Affairs & Trade, Additional information, received 1 March 2011, p. 11.

33 Attorney-General's Department, Additional information, received 28 February 2011, p. 9.

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munitions is unlikely to satisfy the required mental elements for the offence contained in the Bill.34

6.23 In response to concerns that there was no explicit prohibition on direct investment in the bill, Mr Greg Manning of AGD assured the committee that the government's approach was consistent with usual practice:

Therefore the norm when framing criminal offences is to focus on the conduct you are trying to prohibit and then leave it to be decided on the facts of a particular case whether or not that conduct falls within that prohibition. That is the approach that the government has taken in the bill. It repeats the words of the prohibition in the convention, and whether or not a particular act of investment falls within that is left to be determined on the facts.35

6.24 Mr Manning then repeated the point made in the government's submission about the Code's ancillary offence. In his view, the offence in subsection 72.38(1):

picks up by normal operation of the Criminal Code the ancillary provisions of the Criminal Code. I am talking about aiding, abetting, counselling and procuring or acting through agents. That type of conduct that is also prohibited. When you are determining whether or not a particular act

related to investment *and that could be a very broad range of action * is covered, you would look at the full range of conduct that is prohibited by the offences and as extended by those ancillary codes in relation to

72.38(1).36

6.25 Mr Manning argued that the alternative 'pick and choose' approach carries great risk if all possible contexts are not foreseen and that conduct that you intend to prohibit will not be prohibited.37 He emphasised that the real test will be to establish

whether the person intended to invest in cluster munitions and that for the purpose of the act, intention to assist is the central element.38

Committee view

6.26 The committee accepts the government's position that the manner in which a prohibition on investment has been framed is consistent with the normal approach to the framing of criminal offences. The committee believes, however, that the

explanatory memorandum should have provided information on investment and explanation of the government's legislative approach in this regard, especially in light of JSCOT's recommendations.

34 Attorney-General, Minister for Foreign Affairs, Minister for Defence, Submission 24, p. 4.

35 Greg Manning, Attorney-General's Department, Committee Hansard, 3 March 2011, pp. 24 *25.

36 Greg Manning, Attorney-General's Department, Committee Hansard, 3 March 2011, p. 25.

37 Greg Manning, Attorney-General's Department, Committee Hansard, 3 March 2011, p. 24.

38 Greg Manning, Attorney-General's Department, Committee Hansard, 3 March 2011, p. 26.

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Committee conclusion

6.27 The committee understands that the intention of the government is to 'move as quickly as possible towards lodging Australia's instmment of ratification for the Convention' once all measures to give effect to the Convention are in place.39 To this end, the committee recognises that the bill gives effect to the Convention requirement to impose penal sanctions.

6.28 The committee recommends therefore that the bill be passed.

Recommendation 1

6.29 The committee recommends that the Senate pass the bill.

SENATOR MARK BISHOP CHAIR

39 Attorney-General, Minister for Foreign Affairs, Minister for Defence, Submission 24, p. 1.

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Criminal Code Amendment (Cluster Munitions Prohibition) Bill 2010

Dissenting Report

By Senator Scott Ludlam, the Australian Greens

The Criminal Code (Cluster Munitions Prohibition) Bill gives effect to Australia's implementation of the Convention on Cluster Munitions. The Convention on Cluster

Munitions prohibits use, production, transfer and stockpiling of cluster munitions as well as assistance with any of these activities. Under the Convention's obligations, state parties are required to clear their territory of cluster munition remnants, assist victims and provide

cooperation and assistance to other state parties.

Australia was an active participant in the negotiation of the Convention on Cluster

Munitions and among its original signatories. The Criminal Code Amendment (Cluster Munitions Prohibition) Bill 2010 was introduced in the House of Representatives on October

27, 2010 and in the Senate on November 22, 2010. The Selection of Bills Committee found the Bill to be 'inconsistent with recommendations made by the Joint Standing Committee on

Treaties (JSCOT),' and on October 28, 2010 the Senate referred the Bill to the Senate

Committee on Foreign Affairs, Defence and Trade for inquiry and report.

The Greens have concerns with a number of the majority committee's conclusions

particularly with regards interoperability, investment, stockpiling and retention of

munitions.

In terms of interoperability the Australian Greens are not convinced that the report's

findings go anywhere near far enough. The majority committee report finds that the Bill,

'Cannot be considered in isolation from other positive measures that Australia has taken'. It remains satisfied that, 'Positive obligations are a matter of administrative rather than

legislative action' and it comments that 'the article's positive obligations serve as a

compelling incentive to ensure that states parties and their personnel engaged in joint

military operations are a matter of administrative rather than legislative action.' The report

goes on to say that it 'Recognises that the article's positive obligations serve as a compelling

incentive to ensure that states parties and their personnel engaged in joint military

operations abide by the spirit of the Convention. When taken in this broader context, the

committee is satisfied that the concerns about a lack of balance or silence on positive

obligations in the bill are resolved.'

The Greens share the concerns of the Cluster Munition Coalition (Australia) who point to the

fact that the Convention on Cluster Munitions states parties should never 'under any circumstances' engage in prohibited activities related to duster munitions. This bill does not

include the phrase 'under any circumstances' and the Greens are concerned that as

currently drafted, Australian personnel may be permitted to refuel planes carrying cluster

munitions, participate in the planning of attacks involving cluster munitions or create rules of engagement that permit use of the weapon. The Greens believe that Section 72.41

should be revised to ensure that military operations with non-states parties do not become

a loophole in the Bill's language.

The Greens agree with the views of Human Rights Watch who recommend that the Committee revise the Bill to reflect the continued application of the Convention's prohibitions - including the prohibition on assistance - during situations of interoperability. Implementing this interpretation will be consistent with the text of the convention and will

uphold the Convention's object and purpose of eliminating cluster munitions and the humanitarian harm they cause.

The Greens echo the views of Human Rights Watch, who pointed out in their submission that, 'New Zealand's implementation legislation, enacted in 2009, allows for joint military operations while preserving the Convention's prohibitions. It would serve as a good model for Australia's legislation. The New Zealand law criminalizes all activities prohibited by the Convention's Article 1. It also creates an offence for expressly requesting the use of cluster

munitions during joint operations "if the choice of munitions used is within the exclusive control of the Armed Forces." Without creating exceptions to its strong prohibitions, the New Zealand law clarifies that it does not preclude mere participation in joint military

operations. *

In terms of stockpiling and retaining cluster munitions and allowing them to transit cluster

munitions through Australian territory, the Greens are not convinced by the majority committee's position that, 'People's concerns about the operation of sections 72.41 and 72.42 could be allayed by the government better publicising the work that it is doing to encourage non-party states to adhere to or endorse the Convention and the way it uses its best efforts to discourage others from using cluster munitions.'

The Greens share the concerns of the Cluster Munition Coalition (Australia) who point out in their submission that, 'According to Article 9 of the Convention, "Each State Party shall take

all appropriate legal, administrative and other measures to implement this Convention,

including the imposition of penal sanctions to prevent and suppress any activity prohibited

to a State Party under this Convention undertaken by persons or on territo ry under its

jurisdiction or control". The CMC is concerned that the Bill exempts the military personnel of

non-states parties from the Convention's prohibitions while they are on Australian territory.

The CMC is also concerned that the Bill allows non-states parties in military cooperation

with the Australian Defence Force to stockpile cluster munitions on bases, aircraft, and ships

in Australia. Finally, the CMC is concerned that the Bill explicitly allows for the transit of cluster munitions by permitting transit by ship or plane through Australian territory by nonâ

states parties in military cooperation with the ADF.

The Greens agree with the CMC that Section 72.42 (1) should be deleted as this section directly violates Articles 1 and 9 of the Convention. Allowing foreign forces to stockpile

cluster munitions violates the prohibition on assistance because it facilitates stockpiling and

can potentially aid in the use of cluster munitions.

As Human Rights Watch point out in their submission,1 No other state has explicitly allowed

for foreign stockpiling in its implementation legislation, and several nations have said they view the convention to ban the hosting of foreign stockpiles. Austria stated that the "foreign stockpiling of cluster munitions on the national territory of States Parties is prohibited by

the Convention.... Should a State Party to the Convention allow a foreign state to stockpile

cluster munitions on its territory, this action would be in violation with the provision

64 122

entailed in Article 1 paragraph C that prohibits assistance." Colombia noted that it

"absolutely rejects any manner of ... storage of foreign cluster bombs in Colombian territory." Guatemala wrote that it "considers that the stockpiling of cluster munitions of

other countries in the territory of a State Party to the Convention ... is prohibited according

to Article 1 of the Convention." Slovenia stated "in our view, the Convention also contains

the prohibition of ... stockpiling of cluster munitions by third countries on the territory of

each State Party. Therefore, such activities are illegal and not allowed on the territory of the Republic of Slovenia."

The Greens also want to specify the number of cluster munitions Australia will retain with an annual report that indicates the numbers and types of cluster munitions retained in this country.

In terms of investment in companies that develop or produce cluster munitions, the Greens are not persuaded by the government's view that it is not appropriate to explicitly prohibit

such investment because the Convention does not contain such a provision. The lack of a prohibition on investment is directly counter to JSCOT Recommendation 2, which states that

the 'legislation should prevent investment.' The Australian attorney general, in a speech to

the House on November 18, 2010 said that the convention's prohibition on assistance

extends to investment in companies that produce cluster munitions when the investor 'intends to assist, encourage or induce the development or production of cluster munitions....'

The Greens agree with Human Rights Watch who state that the Bill, 'Should explicitly ban

investment because it assists with a prohibited act, that is, the production of cluster

munitions. Production cannot be curtailed and cluster munitions eliminated if a state party

allows direct or indirect financial support to manufacturers of the weapons. Because private

investors often provide important financial support to such companies, the ban should extend to private funds,'

Finally, as the Australian Council of Super Investors (ACSI) points out in its submission, there

is no known direct investment in cluster munitions occurring anywhere in the world, yet

direct investment is the only type of investment that would be captured under the current legislative wording, ACSI observe that, 'For the avoidance of doubt, the current drafting will

have no practical effect on the financing of cluster bomb production.'

Recommendations:

Recommendation 1 The Bill should be revised to better reflect the continued application of the Convention's

prohibitions - including the prohibition on assistance - during situations of interoperability.

The Greens would recommend the example of New Zealand's implementation legislation,

enacted in 2009, which allows for joint military operations while preserving the convention's

prohibitions. It would serve as a good model for Australia's legislation. The New Zealand law

criminalizes all activities prohibited by the convention's Article 1. It also creates an offence for expressly requesting the use of cluster munitions during joint operations 'if the choice of

munitions used is within the exclusive control of the Armed Forces.'

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Without creating exceptions to its strong prohibitions, the New Zealand law clarifies that it

does not preclude mere participation in joint military operations. Its Section 11(6) states: A member of the Armed Forces does not commit an offence against section 10(1) [which lays out the prohibitions] merely by engaging, in the course of his or her duties, in operations, exercises, or other military activities with the armed forces of a State that is not a party to the Convention and that has the capability to engage in conduct prohibited by section 10(1).

New Zealand's approach explicitly permits joint military operations, something Australia wants to do. At the same time, it does not create a blanket defense that excuses prohibited activities, notably assistance, when they are committed during such operations. In so doing,

New Zealand remains true to object and purpose of the convention and is able to balance its obligations under the convention with its obligations to its allies that have not yet joined the convention.

Recommendation 2 The Greens believe that Section 72.41 be deleted and the following wording (see below)

should be added in its place and that sections 72.42 (1) and (2) be deleted as it directly violates Articles 1 and 9 of the Convention. Allowing foreign forces to stockpile cluster munitions violates the prohibition on assistance because it facilitates stockpiling and can

potentially aid in the use of cluster munitions.

Wording for Section 72.41 to be added:

*Ã person who is an Australian citizen, is a member of the Australian Defence Force or is performing services under a Commonwealth contract does not commit an offence against section 72.38 by merely participating in military cooperation or operations with a country not party to the Convention on Cluster Munitions.1

Recommendation 3 The legislation must explicitly specify the minimum number of cluster munitions to be

retained for training purposes. In addition the Minister or his or her delegate should submit

a detailed annual report to the Secretary-General of the United Nations for each year during which cluster munitions are retained, acquired or transferred no later than 30 April of the

following year. The report should include information on the planned and actual use, type, quantity and lot numbers of cluster munitions acquired or retained under subsection (2).

Recommendation 4 All investment - direct and indirect, public and private - should be prohibited by the Act (in line with JSCOT recommendations). A public authority or an entity regulated by the

Australian Securities and Investments Commission (ASIC) or the Australian Prudential

Regulation Authority (APRA) should be deemed to have committed an offence if it directly or indirectly provides funds to or invests funds in a corporation involved in the development

or production of cluster munitions or explosive submunitions.

Senator Scott Ludlam

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Appendix 1

Public submissions, form letter and additional information

1 Ms Sally McGushin

2 Mr Willy Bach

3 Australian Network to Ban Landmines and Cluster Munitions

3 A Australian Network to Ban Landmines and Cluster Munitions

4 Australian Council of Super Investors

4A Australian Council of Super Investors

5 Mr Robert Rands

6 Aotearoa New Zealand Cluster Munitions Coalition

7 Human Rights Watch & International Human Rights Clinic, Harvard Law School

7A Human Rights Watch & International Human Rights Clinic, Harvard Law School

8 Uniting Church of Australia - Synod of Victoria and Tasmania

9 International Committee of the Red Cross

10 Quaker Peace and Justice Committee

11 CBM Australia

12 Union Aid Abroad-APHEDA

13 Afghan Landmine Survivors' Organization

14 Oxfam Australia

15 Medical Association for Prevention of War (Australia)

16 Name Withheld

17 Act for Peace

18 Australian Pugwash Group Inc.

19 Australian Lawyers for Human Rights

19A Australian Lawyers for Human Rights

20 Law Council of Australia

21 Australian Red Cross

22 Cluster Munition Coalition

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23 Ms Merilyn Bertram

24 Ministers for Foreign Affairs and Defence and the Attorney-General

25 Adrian von der Borch

26 Dr Jeff Baker

27 Mrs Helen Stanger

28 Mr Mike Sprange and others

29 Just Peace Queensland Inc.

Form Letter

Eight signatures

Additional Information

1 Attorney-General's Department

2 Department of Defence

3 Department of Foreign Affairs and Trade

4 Cluster Munition Coalition, Capturing the legacy. The journey to ban cluster munitions through the eyes of six photographers

5 Mr N.A.J. Taylor

6 Cluster Munition Coalition, Global Ban on Cluster Munitions, Inside footage from behind the lines, A short film by John Rodsted

68 126

Appendix 2

Public hearing and witnesses

Thursday, 3 March 2011 *Canberra

ABIDI, Mr Azhar, Director, Sustainability and Responsible Investment, Industry Funds Management

BINSKIN, Air Marshal Mark Donald, Chief of Air Force, Royal Australian Air Force

DOCHERTY, Ms Bonnie, Senior Researcher, Human Rights Watch; and Lecturer on Law, International Human Rights Clinic, Harvard Law School, Harvard University

DURHAM, Dr Helen, Strategic Adviser, International Law, Australian Red Cross

GOUSSAC, Ms Netta, Acting Principal Legal Officer, Office of International Law, Attorney-General *s Department

HURLEY, Lieutenant General David, Vice Chief of Defence Force, Department of Defence

MANNING, Mr Greg, First Assistant Secretary, Office of International Law, Attorney-General *s Department

McKINNON, Mr Allan, First Assistant Secretary, International Security Division, Department of Foreign Affairs and Trade

OKOTEL, Mrs Karina, Member, Australian Lawyers for Human Rights

PULESTON, Ms Gaia, Counter Proliferation Section, Department of Foreign Affairs and Trade

ROSE, Mr Andrew, Director, International Law Section, Department of Foreign Affairs and Trade

SKINNER, Ms Rebecca, First Assistant Secretary, Strategic Policy, Department of Defence

SPATHIS, Mr Phillip Arthur, Manager, Strategy and Engagement, Australian Council of Superannuation Investors

THOMAS, Mrs Lorel Margaret, Representative, Cluster Munition Coalition

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The Senate

Foreign Affairs, Defence and Trade Legislation Committee

Defence Legislation Amendment (Security of Defence

Premises) Bill 2010 [Provisions]

March 2011

129

Â© Commonwealth of Australia 2011

ISBN 978-1-74229-366-0

Printed by the Senate Printing Unit, Parliament House, Canberra.

130

Members of the committee Core members

Secretariat

Dr Kathleen Dermody, Committee Secretary Ms Jane Thomson, Principal Research Officer Ms Angela Lancsar, Administrative Officer

Senate Foreign Affairs, Defence and Trade Committee Department of the Senate PO Box 6100 Parliament House Canberra ACT 2600 Australia

Phone: +61 2 6277 3535 Fax: +61 2 6277 5818

Email: fadt.sen@aph.gov.au Internet: www.aph.gov.au/Senate/committee/fadtctte/index. htm

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Table of contents

Members of the committee.......................................................................................iii

Chapter 1

Introduction................................................................................................................1

Referral of the bill....................................................................................................1

Purpose of the bill.....................................................................................................1

Submissions..............................................................................................................2

Scrutiny of Bills Committee....................................................................................2

Acknowledgments....................................................................................................3

Chapter 2

Background to and purpose of the bill....................................................................5

The Department of Defence and its estate...............................................................5

Security risks............................................................................................................6

Response to new challenges....................................................................................7

Objectives and scope of the bill ............................................................................. 10

Views on the bill.....................................................................................................12

Chapter 3

Consensual and non-consensual security functions.............................................15

Statutory regime of search and seizure powers ..................................................... 15

Update of trespass offence and associated a nest power ...................................... 29

Optical surveillance............................................................................................... 30

Powers in relation to protests................................................................................30

Committee conclusion........................................................................................... 30

Chapter 4

The use of force.........................................................................................................31

Legal regime for the use of force involving death or grievous bodily harm........ 31

Legal regime for the use of non-lethal force ........................... 33

Scope of defence premises....................................................................................33

Committee conclusion........................................................................................... 34

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Chapter 5

Training of defence security officials.....................................................................,35

Adequacy of training.............................................................................................. 35

Training requirements in legislative instruments .................................................. 36

Appendix 1

Public submissions.................................................................................................... 41

Appendix 2

Supplementary submission *Department of Defence ......................................... 43

vi 134

Chapter 1

Introduction

Referral of the bill

1.1 On 24 June 2010, the Defence Legislation Amendment (Security of Defence Premises) Bill 2010 was introduced in the Senate. On the same day, the Senate referred the bill to the Senate Foreign Affairs, Defence and Trade Legislation Committee for inquiry and report by 24 August 2010. On 19 July 2010, the Governor- General prorogued the 42nd Parliament and dissolved the House of Representatives. After due consideration, the committee reported to the Senate that it had resolved not to continue its inquiry into the provisions of the bill.

1.2 On 29 September, the bill was reintroduced in the House of Representatives. The following day, the Senate referred the provisions of the bill to the committee for inquiry and report by 16 November 2010. On 16 November, the Senate granted an extension of time to report to the last day of the second sitting week in February 2011 with 3 March 2011 set as the tabling date.

1.3 Apart from two minor technical additions, which do not alter the substance or intent of the legislation, the bill is substantially the same as that introduced in the previous Parliament. The amendments are intended to clarify the safeguards that would apply to the use of force where a person is fleeing and to make clear that the

Secretary of the Department of Defence's approval of identity cards for Defence security officials must be in writing.1

Purpose of the bill

1.4 The Defence Legislation Amendment (Security of Defence Premises) Bill 2010 (the bill) will insert a new Part VIA in the Defence Act 1903 (the Act) and make associated amendments to the Australian Federal Police Act 1979.

1.5 The Explanatory Memorandum notes that the bill gives effect to 'Australian Government initiatives to enhance the security of Defence bases, facilities, assets, and personnel within Australia in response to the changing nature of security threats'.2 The amendments to the Act would:

" clarify that appropriately authorised members of the Defence Force may use 'reasonable and necessary force, including lethal force, to prevent the death of, or serious injury to a person in connection with an attack on Defence premises';

1 Department of Defence, Submission 8, p. 1.

2 Explanatoiy Memorandum, Defence Legislation Amendment (Security of Defence Premises) Bill 2010, p. 1.

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" establish a statutory regime of search and seizure powers to operate at defence premises to 'reduce the risk of dangerous items entering Defence facilities, or material and classified information being unlawfully removed';

" update and relocate the trespass offence and related arrest power in section 82 of the Defence Act 1903',

" support the enforcement of the trespass offence by authorising Defence to use overt optical surveillance devices to monitor the security of Defence premises and to disclose the information captured by these devices to law enforcement agencies and Commonwealth, state and territory public prosecution authorities; and

" clarify that this Part of the bill does not limit the exercise of powers of a

defence security official, member of Defence or any other person, under the act or any other law.3

Submissions

1.6 The committee advertised the inquiry on its website and in The Australian on 5, 9, 16 and 30 June, 14 July, 11 August and 13 October 2010. The committee wrote to the Minister for Defence and respective federal, state and territory governments and police forces, inviting them or their departments or related agencies to make a

submission. A number of other organisations, commentators, and academics were also contacted and invited to make submissions to the inquiry. The committee received 10 submissions, which are listed at Appendix 1.

Scrutiny of Bills Committee

1.7 The Senate Standing Committee for the Scrutiny of Bills considered the bill and raised a number of concerns in relation to various powers conferred on defence security officials. These concerns are detailed and discussed throughout the report. At the centre of such concerns is whether powers conferred on defence security officials, including the authority to use lethal force and perform non-consensual security functions, unduly trespass on personal rights and liberties. Underlying the concerns of the scrutiny committee was whether security interests were balanced with that of individual rights: In its view:

.. .the general question of whether an appropriate balance has been struck in these provisions between (1) personal rights and liberties and (2) interests in maintaining the security of Defence bases and responding to security threats is a question which may appropriately be left to the consideration of the Senate as a whole.4

3 Explanatory Memorandum, Defence Legislation Amendment (Security of Defence Premises) Bill 2010, p. 2.

4 Senate Standing Committee for the Scrutiny of Bills, Alert Digest No. 8 of2010, 27 October 2010, p. 33.

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1.8 This matter of appropriate balance will be central to the committee's consideration.

Acknowledgments

1.9 The committee thanks those who assisted with the inquiry.

1.10 The committee would also like to take the opportunity to note that the Explanatory Memorandum provides useful information on the intentions of the bill and its key provisions.

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'll

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Chapter 2

Background to and purpose of the bill

2.1 The bill gives effect to initiatives to enhance the security of Defence bases, facilities, assets and personnel within Australia. This chapter considers the main security threats to Defence personnel and property in Australia and the government's legislative response.

The Department of Defence and its estate

2.2 The mission of the Department of Defence (Defence) is to 'defend Australia and its interests' and:

Defence resources, including equipment and personnel, will be directed to support this mission as first priority.1

2.3 In sustaining its mission, Defence's primary focus is to 'protect and advance Australia's strategic interests by providing support to the Government and the Australian Defence Force (ADF) for the direct defence of Australia and its unique strategic interests'.2 In this context, the Defence White Paper 2009 recognises Defence

bases and infrastructure as 'enabling functions' which, together with other support mechanisms, are considered to be the 'backbone' of Defence business.3 The facilities and infrastructure of the Defence estate support the activities of over 90,000 people across the country.4 In relation to its estate, Defence noted that it is:

... the largest and most complex land and property holding in Australia. It provides the facilities which directly enable the generation, projection and sustainment of operational capability. The Defence estate also supports our personnel, providing them with a safe place to work and their families to

live.5

1 Department of Defence website, http://www.defence.gov.au/footei7contacts.him (accessed 2 November 2010).

2 Department of Defence, 'Portfolio Overview', Portfolio Budget Statements 2010-11, Commonwealth of Australia, Canberra, p. 3, http://www.defence.gov.au/budget/l *Ã¼â *Ã´ l/pbs/2010-2011 Defence PBS 02 overview.pdf (accessed 2 November 2010).

3 Department of Defence, Defending Australia in the Asia Pacific Century: Force 2030, Defence White Paper 2009, p. 119, http://www.defence.gov.au/whitepaper/docs/defence white paper 2009.pdf(accessed 2 November 2010).

4 Department of Defence Infrastructure Division, A Message from HI *Infrastructure Division, John Owens-Head Infrastructure Division, undated, http://www.defence.gov.au/id/Message%20from%20HI.htm (accessed 2 November 2010).

5 Department of Defence, Defending Australia in the Asia Pacific Century: Force 2030, Defence White Paper 2009, p. 121, http://www.defence.gov.au/whitepaper/docs/defence white paper 2009.pdf(accessed 2 November 2010).

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2.4 There are approximately 88 major Defence bases or Defence premises in Australia.6 The Defence estate which covers 3.4 million hectares of land7 comprises approximately 370 owned properties and an additional 350 under lease.8 The estate includes 34,000 structures and consists of training areas; command headquarters; airfields; ship repair and wharfmg facilities; accommodation; depots; warehouses and explosive ordnance storehouses; training, education, research and testing facilities; and office buildings. The estimated gross replacement value of the estate is over $64 billion.9

Security risks

2.5 Mr Clive Williams from the Strategic and Defence Studies Centre noted that theft by insiders as well as external parties of hard-to-obtain and valuable items stored at defence facilities was the main security threat to Defence bases, facilities, assets and personnel in Australia. He commented that:

Such items can include night vision devices, operational military equipment, weapons and ammunition, and military ordnance and explosives. The ongoing concern at some Defence facilities is the potential for an organised attempt to gain access to weapons and explosives.10

2.6 In addition, Defence cited the threat of terrorism as real, persistent and evolving and that 'Defence personnel and premises are potentially attractive targets for terrorist groups'. It informed the committee that:

To meet these challenges, Defence maintains a framework of protective security measures to safeguard its personnel and premises. This framework consists of a range of physical and personnel security measures, coupled with intelligence, to provide a layered response to mitigate threats.11

2.7 Defence noted, however, that large numbers of people regularly flow in and out of Defence premises on a daily basis. Moreover, under the current regime, a

6 Department of Defence, Submission 8, p. 6.

7 Department of Defence, Defending Australia in the Asia Pacific Century: Force 2030, Defence White Paper 2009, p. 122, http://www.defence.gov.au/whitepaper/docs/defence white paper 2009.pdf(accessed 2 November 2010).

8 Department of Defence, Submission 8, p. 6.

9 Defence Support Group, Department of Defence, Overview of Facility Operations , March 2009, p. 7, http://www.defence.gov.au/im/estate maintenance/11/docs/gesst/l 1.180a%20GESST16%20FA COPS%20Qverview%20090513 .ppt (accessed 2 November 2010). Department of Defence Infrastructure Division, A Message from HI-Infrastructure Division, John Owens-Head Infrastructure Division, undated, http://www.defence.gov.au/id/Message%20from%20HI.htm (accessed 2 November 2010).

10 Clive Williams, Submission 1, p. 1.

11 Department of Defence, Submission 8, p. 4.

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Defence Force member or Australian Public Service (APS) employee cannot be denied access to Defence premises because of a refusal to consent to a search or detained on exit unless there is a reasonable suspicion that the individual had committed an offence.12 It identified a number of other restrictions in relation to security functions on Defence premises. For example, whilst access by contractors can be made conditional, at present the ability to conduct a search in relation to a contractor is dependent on the terms of their contract. Further, even though visitors may be subject to a consensual search on entry, any attempt to conduct a search on exit is dependent on consent being given to that action, unless there is reasonable

suspicion that the individual has committed an offence. In relation to these restrictions, Defence stated:

The present lack of explicit search, seizure and related powers significantly impedes Defence's ability to reduce the risk of unauthorised items being brought onto Defence premises and dangerous, restricted or classified items and information being improperly removed.13

Response to new challenges

2.8 Two high profile incidents highlighted the need for Defence to review its security arrangements. In 2008, a former army captain was convicted and imprisoned in relation to 21 offences over the theft and illicit sale of ten rocket launchers between 2001 and 2003 to a convicted criminal with terrorist links.14 The case illustrated the 'risk of improper removal of dangerous, restricted or classified items from defence bases1.15 Similarly, in 2007 seven M72 shoulder-fired launchers were stolen from an ADF depot at Orange Hills.16

2.9 The second major public incident happened on 4 August 2009 when five individuals were arrested on allegations of planning an armed attack on the Holsworthy Army Base.17 The alleged plan involved storming the barracks with automatic weapons and shooting army personnel or others until they had used up their

12 Department of Defence, Submission 8, p. 6.

13 Department of Defence, Submission 8, p. 6.

14 Sally Neighbour, *No sign of stolen rocket-launchers', The Australian, 17 October 2009, http://www.theaustralian.com.au/news/no-sign-of-stolen-rocket-launchers/storv-e6frg6o6- 1225787746734 (accessed 1 October 2010), 'Terror arms soldier Shane Della-Vedova jailed', The Daily Telegraph, 16 May 2008, http://www.dailvtelegraph.com.au/news/nsw-act/terror- arms-soldier-iailed/storv-e6freuzi-l 111116354690 /accessed 1 October 2010).

15 The Hon Stephen Smith MP, Minister for Defence, Second Reading Speech, House Hansard, 29 September 2010, p. 11.

16 Sally Neighbour, 'No sign of stolen rocket-launchers', The Australian, 17 October 2009, http://www.theaustralian.com.au/news/no-sign-of-stolen-rocket-launchers/story-e6frg6o6- 1225787746734 (accessed 1 October 2010).

17 Milanda Rout, 'Jihad's motley crew', The Australian, 30 October 2009, http://www.theaustralian.com.au/news/features/iihads-motlev-crew/storv-e6frg6z6- 1225792580038 (accessed 1 October 2010).

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ammunition, were captured or killed.18 On 23 December 2010, three of the men were found guilty of conspiring to prepare for or plan a terrorist act. The two other men were acquitted.19

2.10 Exposure of the planned attack raised concerns regarding the security of Defence bases. Mr Clive Williams, for example, argued that terrorism, and particularly Australian home grown extremism, was one of the main security threats to defence facilities. He noted, moreover, that at least three of the Islamic extremist terrorism cases in Australia since 9/11 have involved plans to attack defence facilities using explosives or firearms.20

2.11 Following the arrests in relation to the planned attack on the Holsworthy base, then Prime Minister the Hon Kevin Rudd MP convened a meeting of the National Security Committee of Federal Cabinet the same day. Whilst noting the advice from the Chief of the Defence Force (CDF) Air Chief Marshal Angus Houston that security arrangements were 'adequate', Mr Rudd requested that the CDF and Defence undertake an 'immediate and comprehensive review of adequacy, given these new developments'.21

2.12 Reports suggested that within hours of Mr Rudd's order for an inquiry into security arrangements, two employees of the Daily Telegraph newspaper were caught by Defence personnel taking photographs inside the Holsworthy base for which they were charged.22 The incident prompted fresh calls for unarmed private security guards who provide frontline security at defence bases to be replaced with armed soldiers.23

2.13 The Review of Defence Protective Security Arrangements (the review) produced a number of recommendations concerning both policy and physical security

18 Cameron Stewart and Milanda Rout, 'Somali extremists on a 'fatwa order' from God', The Australia, 5 August 2010, http://www.theaustralian.com.au/news/nation/somali-extremists-on- a-fatwa-order-from-god/storv-e6frg6nf-l 225758010718 (accessed 1 October 2010). Paul Anderson and Norrie Ross, 'Three Melbourne men guilty of planning terror attack on NSW

army base', The Daily Telegraph , 23 December 2010, http://www.dailvtelegraph.com.au/news/nsw-act/three-melbouroe-men-guilty-of-planning- terror-attack-on-nsw-armv-base/storv-e6fireuzi-l225975368101 (accessed 23 December 2010).

19 'Three guilty of planning terror attack', ABC News, 23 December 2010, http://www.abc.net.au/news/stories/2010/12/23/3100126.htm (accessed 24 December 2010).

20 Clive Williams, Submission 1, p. 1.

21 The Hon Kevin Rudd MP, Prime Minister, Transcript of Interview, ABC Radio AM Program , 5 August 2009, http://parlinfo.aph.gov.au/parlInfo/download/media/pressrel/9ZBU6/upload binary/9zbu60.pdf: fi 1 eT ype=appl i cati on/pdf (accessed 1 October 2010).

22 'Holsworthy review 'will take one month", The Age, 6 August 2009, http://news.theage.com.au/breaking-news-national/holsworthv-review-will-take-one-month- 20090806-eadp.html (accessed 1 October 2010).

23 Sean Rubinsztein-Dunlop, 'Journalists caught inside Sydney army base', ABC News, http://www.abc.net.au/news/stories/2009/08/05/2647236.htm (accessed 12 October 2010).

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measures. The need to clarify legal issues surrounding Australian Defence Force (ADF) members acting in self defence in the event of a no-warning attack was one such recommendation.24

2.14 On 22 October 2009, the Secretary of Defence, Dr Ian Watt, stated that the department was in the process of implementing a range of measures in accordance with the findings and recommendations of the review. He stated in this regard that:

These initiatives include strengthening Defence's protective security alert system and other policy underpinning security arrangements, additional patrolling presence by the Australian Federal Police and contracted security guards, and a range of physical security measures.25

2.15 The same Defence media release also noted that no further details about the security review, its recommendations and enhanced security measures would be released.26

2.16 In its submission, Defence noted that the review led to the introduction of a number of policy and security initiatives to complement pre-existing arrangements at Defence premises. It noted:

These initiatives include strengthening security policy and arrangements relating to access control, incident response and contractor guarding, together with physical measures such as improvements in perimeter fencing, security lighting, alarm systems and increased security patrols.27

2.17 In the second reading speech in relation to the bill, the Defence Minister, the Hon Stephen Smith MP, stated that one of the recommendations of the review was to 'bring forward' a number of legislative amendments. These proposals are incorporated in the bill. To this extent, therefore, the bill seeks to implement recommendations of the review pertaining to legislative reform.28 29

24 'Defence allowed to shoot terrorists', The Sydney Morning Herald, 24 June 2010, http://news.smh.com.au/breaking-news-national/defence-allowed-to-shoot-tenOrists-20100624- z38y.html (accessed 1 October 2010).

25 Department of Defence, 'Defence Base Security Review-Update', Defence Media Release , MSP A 361/09, 22 October 2009, http://www.defence.gov.au/media/DepartmentalTDl.cfm?CurrentId=9612 (accessed 1 October 2010).

26 Department of Defence, 'Defence Base Security Review-Update', Defence Media Release, MSPA 361/09, 22 October 2009, http://www.defence.gov.au/media/DepartmentalTpl .cfm?CurrentId=9612 (accessed 1 October 2010).

27 Department of Defence, Submission 8, p. 5.

28 The Hon Stephen Smith MP, Minister for Defence, Second Reading Speech, House Hansard, 29 September 2010, p. 11.

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2.18 Defence argued that the implementation of provisions contained in the bill are required to continue to meet the challenges created by the 'changeable nature of security threats, to ensure the continued security and safety of Defence premises, personnel and assets within Australia'. According to Defence, the bill 'represents the

first phase of legislative amendments and provides provisions of common application across Defence to deal effectively with the security of Defence premises, assets and personnel'.29 A second phase will consider the requirement to implement proposals that raise more complex legal and practical issues including powers for the protection of naval vessels.

Objectives and scope of the bill

2.19 According to the Minister, the bill reflects 'the importance the government places on the security and safety of ADF members, defence employees and the Australian public'.29 30 The bill will insert a new Part (Part VIA) into the Defence Act 1903 to give effect to initiatives directed at enhancing the security of Defence bases,

facilities, assets and personnel within Australia. In broad terms, the bill introduces measures in three key areas designed to:

" strengthen the legal regime for Defence Force members who may be required to use force involving death or grievous bodily harm;

" establish a statutory regime of search and seizure powers; and

" update the existing trespass offence and associated arrest power in the Defence Act 1903.

2.20 The powers introduced in the new Part confer security functions, including identity and authorisation checks, search and seizure powers, on three classes of officials, otherwise termed 'defence security officials' including:

(a) defence contracted security guards;

(b) security authorised members of the Defence Force; and

2.21 The role of (a) defence contracted security guards is principally restricted to performing the consensual security functions. The non-consensual powers are largely reserved for (b) security authorised members of the Defence Force and (c) defence security screening employees. Whilst all three classes of official are empowered to use

force in restricted circumstances including that to restrain and detain a person, the principle that underlies such action is that such force shall be 'necessary and reasonable'. The power to use force likely to cause death or grievous bodily harm is

29 Department of Defence, Submission 8, p. 5.

30 The Hon Stephen Smith MP, Minister for Defence, Second Reading Speech, House Hansard, 29 September 2010, p. 89.

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restricted to security authorised members of the Defence Force only in the context of a current or imminent attack on defence premises which is likely to cause death or serious injury to persons on defence premises. Other defence security officials are not so authorised.

2.22 In terms of the scope of application, the bill distinguishes between three locations: defence access control points, defence premises, and locations external to defence premises. The concept of a 'defence access control point' is introduced in the

bill and defined in section 71A as:

...a point of entry to, or exit from, defence premises or a part of defence

premises, where entry or exit is controlled or limited by any means, including but not limited to control by means of:

(a) guarding by defence security officials; or

(b) physical barriers such as security screens, locked doors or gates.

2.23 According to the Explanatory Memorandum, the puipose of the definition is to create identified points on defence premises where defence security officials are 'expressly authorised to exercise the identification, search and related enforcement powers proposed in the new Part' and that:

The mere presence, on Defence premises, of a sign or boundary marker, for example a fence or a painted line on a road or airport tarmac, does not of itself constitute a defence access control point for the puiposes of this Part. A defence access control point will use one or more measures to limit or control access to defence premises, or a part thereof, either by identifying the person or confirming their authority to access the premises, or a part thereof. These measures may include, but are not limited to, the use of one or more of the following: the presence of defence security officials, the requirement to present access cards or other identification for inspection, electronic security banders fitted with access card readers, electronic handheld access card readers, retinal scanners, hand scanners and comparable devices. These measures may be used in conjunction with, but not limited to, any of the following physical security controls: gates, boom gates, security bollards, locked or electronically controlled doors, and entiy points to vehicles, vessels or aircrafts including gangways and stairs. In relation to the latter, a defence access control point may be established at the base of the gangway to a vessel, the stairs leading up to an aircraft or a ramp providing access to a vehicle.31

2.24 Defence premises is also defined in the bill to be in Australia, owned or occupied by the Commonwealth for use by the Defence Force or the Department and:

(a) an area of land or any other place (whether or not it is enclosed or built on);

31 Explanatory Memorandum, Defence Legislation Amendment (Security of Defence Premises) Bill 2010, p. 4.

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(b) a building or other structure;

(c) a vehicle, vessel or aircraft, including any fixed or moveable ramp, stairs or other means of access to, or exit from, the vehicle, vessel or aircraft;

(d) a prohibited area, within the meaning of the Defence (Special Undertakings) Act 1952 .32

Views on the bill

2.25 Overall, submitters recognised the importance of this legislation and in general supported the objectives. For example, the Chief Minister, Minister for Police, Fire and Emergency Services of the Northern Territory stated:

It is quite clear that these amendments are needed and will certainly enhance the security of Defence bases, facilities, assets and personnel, which is especially relevant given the current security environment.33

2.26 The ACT's Attorney-General and Minister for Police and Emergency Services had no concerns about the bill and emphasised that the AFP had 'substantial involvement in drafting the amendments'.34 The New South Wales Department of Premier and Cabinet advised that the New South Wales Police Force also had no major concerns in relation to the bill.35 The South Australia Police, the Victoria Police and Police Federation of Australia offered general support for the bill while Tasmania Police supported the proposed amendments on the basis that training and accountability provisions are put in place.36 Mr Clive Williams supported an extension of the powers conferred under the bill.37

2.27 Although in favour of the bill, a number of submitters raised a few concerns such as the need for delineation between the role and powers of defence security officials in relation to those of the police. They also drew attention to issues with the implementation of the provisions especially the importance of training. The Standing Committee on the Scrutiny of Bills, however, registered a number of concerns relating to undue trespass on personal rights and liberties and strict liability provisions.

32 This includes a place occupied for a special defence undertaking (section 7) and any area of land and/or water declared by the Minister to be a prohibited area for the purposes of the defence of the Commonwealth (section 8).

33 Submission 5.

34 ACT Legislative Assembly, Submission 6, p. 1.

35 New South Wales Department of Premier and Cabinet, Submission 7, p. 1.

36 South Australia Police, Submission 2, Victoria Police, Submission 3 and 3A, Police Federation of Australia, Submission 4 , Western Australia Department of the Premier and Cabinet, Submission 9; Commissioner of Police, Tasmania, Submission 10.

37 Mr Clive Williams, Submission 1.

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2.28 In the following chapters, the committee examines the provisions of the bill and key issues.

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Chapter 3

Consensual and non-consensual security functions

3.1 The bill establishes a statutory regime of search and seizure powers to reduce the risk of unauthorised persons or items entering defence facilities and restricting items including weapons and classified information being improperly removed. In this

chapter, the committee considers the consensual and non-consensual security functions conferred on defence security officials including search and seizure powers and the safeguards in the exercise of such powers. Trespass offences and the associated arrest power are also considered.

Statutory regime of search and seizure powers

3.2 Defence argued that the bill seeks to overcome the security risks imposed by the current absence of explicit search powers by introducing a statutory regime of search, seizure and related powers to be exercised by Defence security officials on Defence premises.1 In relation to the proposed security functions, the bill contains two

levels of power that can be exercised *consensual and non-consensual. Consensual security functions are detailed in division 3 of the bill whereas non-consensual security functions are outlined in division 4.

Consensual security functions

3.3 Division 3 of the bill confers a range of powers on defence security officials at defence access control points and on defence premises. Such officials have the power to:

" request a person about to pass a defence access control point or on defence premises, to provide evidence of identity and the authority to pass the control point or to be on defence premises respectively;2

" request a limited search of a person, vehicle, vessel, or aircraft about to pass a defence access control point;3

" refuse, (in defined circumstances), to allow a person, vehicle, vessel or aircraft to pass a defence access control point if:

" the person refuses to provide identification or permit such a search; or

" as a result of the person complying with the request, the defence security official 'reasonably believes' that the person, vehicle, vessel or aircraft,

1 Department of Defence, Submission 8, p. 6.

2 Defence Legislation Amendment (Security of Defence Premises) Bill 2010, ss. 71H(1) and 71K(2).

3 Defence Legislation Amendment (Security of Defence Premises) Bill 2010, ss. 71H(2) and 71J(1).

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or thing in it is not authorised to pass, constitutes a threat to the safety of a person on defence premises, or relates to a criminal offence committed or may be committed on or in relation to the defence premises;4 and

" if on defence premises, restrain or detain a person or any person in a vehicle, vessel or aircraft if that person:

" has refused a request for identity or search; or

" as a result of complying with such a request, the defence security official reasonably believes that the person, vehicle, vessel or aircraft (or thing in it) is not authorised to pass the defence access control point, constitutes a threat to the safety of persons on site; and

" in the case of a person, has committed, or may commit, a criminal offence on, or in relation to, the defence premises; or

" in the case of a vehicle, vessel or aircraft relates to a criminal

offence that has or may be committed on the defence premises.5

Provisions fo r declared explosive ordnance depots

3.4 The same limited search, restrain and detain powers are conferred on a contracted defence security guard on a declared explosive ordnance depot.6 In relation to land, buildings or structures declared explosive ordnance depots, a contracted defence security guard may under section 71M:

" request a person on site to undergo a limited search;

" restrain and detain a person who refuses a request or is believed not to be

authorised to be on a declared explosive ordnance depot, constitutes a threat to the safety of persons on the depot, or has committed or may commit a criminal offence in relation to the depot.

3.5 According to the Explanatory Memorandum, the concept of a limited search has been introduced in the bill 'to allow both the search of things in a person's possession and a 'pat down' of the person over their outer garments'.7 A 'limited search' is defined as a search of things in the possession of a person and may include

requesting that the person remove an overcoat, coat or jacket, gloves, shoes and hat; and examination of such items that the individual consents to remove. A limited search also means:

4 Defence Legislation Amendment (Security of Defence Premises) Bill 2010, ss. 71H(3) and 71 J(2).

5 Defence Legislation Amendment (Security of Defence Premises) Bill 2010, ss. 71H(4), 71 J(3) and 71K(3).

6 Subdivision B.

7 Explanatory Memorandum, Defence Legislation Amendment (Security of Defence Premises) Bill 2010, p. 6.

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A search of a person conducted by quickly running the hands over the person's outer garments and an examination of anything worn or carried by the person that is conveniently and voluntarily removed by the person;

But does not include requesting the person to remove all of his or her

garments.8

3.6 The powers to restrain and detain a person are conferred on defence security officials only for the purpose of placing the individual into the custody of a police officer at the earliest practicable time.9 The use of force in the application of this power should, in accordance with the general rule on the use of force, be 'reasonable and necessary'.10

3.7 In relation to the practical application of division 3, the Minister for Defence noted that the consensual identification and search powers 'will generally be exercised by contracted security guards on a random basis on entry to and exit from defence premises at low to medium threat levels'.11

3.8 The consensual search powers conferred on defence contracted security guards received support from some witnesses.12 Mr Clive Williams argued that the contracting of guarding services to civilian contractors who did not have the right to search had created problems at defence facilities in the past. He emphasised that guard

staff at defence facilities should have the 'power to search all persons and vehicles that enter or leave the facility'.13

3.9 Some witnesses, however, had reservations. While in support of the 'general thrust' of the bill, the Police Federation of Australia (PFA) raised concerns about what it termed 'police-style powers being granted to persons other than fully trained and sworn police officers'.14 15 It emphasised the need to avoid the introduction of a 'second- tier of policing' particularly in relation to contracted defence security guards,^ The PFA also voiced concerns about the provision of search powers to contracted defence

security guards, stating that 'we are mindful of not conceding such powers being granted away from Defence premises'. It emphasised the importance of defining the

8 Defence Legislation Amendment (Security of Defence Premises) Bill 2010, Schedule 1, Part 1.

9 Defence Legislation Amendment (Security of Defence Premises) Bill 2010, s. 72J.

10 Defence Legislation Amendment (Security of Defence Premises) Bill 2010, ss. 72G(1).

11 The Hon Stephen Smith MP, Minister for Defence, Second Reading Speech, House Hansard, 29 September 2010, p. 12.

12 Section 71B of the bill defines a contracted defence security guard as a person who is party to or a subcontractor for a contract with the Commonwealth or a Commonwealth entity or an employee of one or the other and has satisfied the training and qualification requirements as determined by the Minister by legislative instrument.

13 Clive Williams, Submission 1, p. 3.

14 Police Federation of Australia, Submission 4, p. 1.

15 Police Federation of Australia, Submission 4, p. 1.

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scope of the work of contracted defence security guards and ensuring that their functions were 'strictly confined to defence bases and premises and the immediate surrounds of those establishments'.16

3.10 Defence responded to the PFA's concerns:

The Bill does not alter the primacy of civil law enforcement authorities in responding to security incidents at Defence premises. The proposed statutory regime incorporates safeguards that ensure that personnel

exercising powers under the Bill have been authorised by the Minister for Defence and have satisfied a minimum level of training and qualification requirements as determined by the Minister or his delegate.17

3.11 Furthermore, the Explanatory Memorandum is clear about the limitations placed upon security guards' powers:

Contracted defence security guards will only be authorised under the Act to request evidence of a person's identification, conduct consensual searches and, in defined circumstances, restrain and detain a person for the purposes

of placing them in the custody of a law enforcement officer.18

3.12 Defence also highlighted that the training requirements for contracted security guards will 'build upon and enhance the existing training regime as mandated in Defence security policy *. In its supplementary submission, the department listed the mandatory requirements which contracted security guards must meet including the

successful completion of a Certificate II in Security Operations.19

3.13 In response to suggestions that ADF members provide security at the entrances and perimeters to Defence bases instead of contracted defence security guards, Defence held that:

The use of ADF members to undertake routine 'static' guarding duties at low threat levels across all Defence sites is not a cost effective use of this highly trained resource. Moreover, noting the significant personnel numbers that would be involved, this would also have an adverse impact on ADF training and operational availability.

At lower threat levels, security at Defence bases will involve a combination of contracted security guards, civil police and, at some sites, Australian Federal Police (AFP) Protective Service Officers. At higher threat levels, ADF members would likely takeover the guarding function at Defence

bases given their increased range of powers under the Bill, vis-a-vis

16 Police Federation of Australia, Submission 4 , pp. 1- 2.

17 Department of Defence, Submission 8A, p. 8.

18 Explanatory Memorandum, Defence Legislation Amendment (Security of Defence Premises) Bill 2010, p. 4.

19 Department of Defence, Submission 8A, p. 5. Details of the mandatory requirements for contracted security guards and the training package are provided in the department's supplementary submission which is provided in Appendix 2 to this report.

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contracted security guards, including the power to require identification, conduct non-consensual searches, seize items and, if necessary, take action to make a seized item safe.20

3.14 With regard to exercising this power outside Defence premises, the respective sections of the bill make a distinction between when a person or vehicle, vessel or aircraft is about to pass a defence access point, in which case they can only be refused

to pass, and when they are on defence premises.21 Defence further noted that:

The powers contained in the Bill for all categories of Defence security officials are only exercisable on Defence premises. This is defined as any area of land or other place, a building or other structure, a vehicle, vessel or aircraft, or a prohibited area within the meaning of the Defence (Special

Undertakings) Act 1952, which is located in Australia and is owned or occupied by the Commonwealth for use by the Defence Force or the

Department.22

3.15 Defence also drew attention to the limitations on the powers to restrain and detain. Such powers are applicable only on Defence premises and in relation to a person who refuses or fails to comply with an identification or search requirement, or as a result of complying, the Defence security official reasonably believes that the person is not authorised to be on the premises, constitutes a threat to safety or has (or may) commit a criminal offence. Defence emphasised, moreover, that the ability to restrain and detain was a 'fundamental component of the proposed search regime1 detailed in the bill, and that:

Without the ability to restrain and detain people for the puiposes of placing them in police custody, Defence will be unable to mitigate the risk of dangerous, restricted or classified items and information being improperly removed from Defence premises.23

The role and powers o f Defence security officials in relation to the police

3.16 Concerns were raised regarding the role of Defence security officials in relation to the police and of the need for clear demarcation between their respective powers and responsibilities. The Western Australia Department of the Premier and Cabinet emphasised that if the bill is enacted:

...there needs to be clear delineation of each agency's role and powers during the response phase to avoid any confusion.24

3.17 The Northern Territory Government identified:

20 Department of Defence, Submission 8A, p. 1.

21 Clauses 71H-71N.

22 Department of Defence, Submission 8A, p. 9.

23 Department of Defence, Submission 8, p. 4.

24 Western Australia Department of the Premier and Cabinet, Submission 9, p. 2.

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...a need for the Defence Force to engage with Northern Territory Police once the legislation is in place, to ensure agreements are considered regarding response arrangements and any subsequent investigations arising from the use of these new powers.25

3.18 Rather than demarcate respective powers, Victoria Police argued that the police should be provided the same security powers as defence security officials on the basis that:

There may be some circumstances involving remote defence facilities, for example where there is only one Security Official present, where support from the Federal or State/Territory police forces is required and as such, it would be prudent for members of those police forces to have the same clearly defined legislative powers for security.26

3.19 The committee understands the concerns regarding the need for clear demarcation between the respective roles and powers of defence officials and the police. In the committee's view, these concerns relate particularly to the practical manner in which such powers are exercised. It recognises the need for Defence to

work with the respective police forces to establish clear understandings of the extent and scope of these Defence powers and how they interact or meld with civilian police.

3.20 In this regard, the committee notes that Defence has and will continue to take steps to ensure that misunderstandings about the exercise of power do not arise and that the respective responsibilities of defence and civilian police do not clash. For example, Defence has established a Working Group comprising inter-departmental representation to finalise policy and procedural arrangements. The Working Group

includes representation from the Australian Federal Police (AFP) and the Australian Customs and Border Protection Service to enable Defence to 'draw on the experience these agencies have with implementing and managing comparable legislative powers'.27 Defence has also initiated consultation with the states and territories through the Legal Issues Sub-Committee of the National Counter Terrorism

Committee on potential implementation of the bill. Defence noted, moreover, that:

Consultation with relevant State and Territory agencies will continue and will inform final implementation arrangements and procedures.28

3.21 Defence noted its intention to continue to consult with union representatives through Defence's National Workplace Relations Committee.

3.22 The committee supports the initiative that Defence has taken to engage in a consultation process with the AFP and other federal agencies including the Australian

25 Northern Territory Government, Submission 5, p. 1.

26 Victoria Police, Submission 3, p. 1.

27 Department of Defence, Submission 8, p. 12.

28 Department of Defence, Submission 8, p. 12.

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Customs and Border Protection Service to, amongst other things, identify 'appropriate training and qualification requirements for Defence security officials'.29

3.23 The committee believes that Defence and the respective police forces need to develop memoranda of understanding supported by joint training exercises between defence security officials and state and federal police in order to address or alleviate some of the concerns relating to military and civilian cooperation.

Noil-consensual security functions

3.24 Division 4 of the bill details arrangements for identification and searches which are non-consensual. Under these provisions, officials 'require' rather than 'request' identification and other information in contrast to their consensual security function. The powers are conferred on special defence security officials who include

security authorised members of the Defence Force and defence security screening employees.30 For example, special defence security officials are empowered under the bill to:

" require a person to produce evidence of their identity and authority to pass the access control point;31

" search a person, vehicle, vessel or aircraft about to pass a defence access control point on defence premises or which is on defence premises or to request a search if the person, vehicle, vessel or aircraft is not on defence premises;32

" refuse, in defined circumstances, to allow a person, vehicle, vessel or aircraft to pass a defence access control point;33 and

" restrain and detain a person on defence premises or any person in a vehicle, vessel or aircraft who has been refused permission to pass a defence access control point or request that the person leave defence premises and remove them if they refuse to do so.34

3.25 The same powers apply, if a person, vehicle, vessel, or aircraft is on defence premises and the special defence official 'reasonably believes' that they;

29 Department of Defence, Submission 8, p. 4.

30 Such officials are defined in sections 71C and 71D respectively of the bill.

31 Defence Legislation Amendment (Security of Defence Premises) Bill 2010, ss. 71R(1) and 71T(1)

32 Defence Legislation Amendment (Security of Defence Premises) Bill 2010, ss. 71R(2), 71 S(1), 71T(3) and 71U(2).

33 Defence Legislation Amendment (Security of Defence Premises) Bill 2010, ss. 71R(3) and 71S(2).

34 Defence Legislation Amendment (Security of Defence Premises) Bill 2010, ss. 71R(4), 71S(3), 71T(4) and 71U(3).

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" are not authorised to be on the premises, or

" constitute a threat to the safety of persons on the defence premises, or

" have committed, or may commit, a criminal offence on, or in relation to, the premises (in the case of a person) or relates to a criminal offence on or in relation to the defence premises (in the case of a vehicle, vessel or aircraft).35

3.26 A search of a person under the non-consensual search regime has the same meaning as that in section 51 of the Defence Act 1903 which deals with Defence Force assistance to the civil authority under Part IIIAAA. That definition is based on the definitions of frisk search and ordinary search which are contained in Part 1AA of the Crimes Act 1914. In terms of the search function, whereas a consensual search or limited search provided for in division 3 involves requesting the person to remove outer clothing and inspection of items given voluntarily, a search for the purposes of division 4 requires the removal of specified items of clothing for search purposes.

3.27 In terms of seizure, division 5 provides special defence security officials with the power to seize a thing on defence premises or a thing found as a result of a search if there are grounds to believe that it constitutes a threat or is related to a criminal offence committed or may be committed on or in relation to defence premises. In this regard, a security authorised member of the Defence Force has the power to:

" make the thing safe or prevent it from being used;

" provide a receipt for the thing if practicable; and

" hand it over to the AFP or member of the respective state or territory police if there are reasonable grounds to believe that the thing has been used or involved in the commission of a criminal offence; or

" return the thing within 7 days if practicable to do so; or

" give it to a member of the AFP or respective state or territory police force at the earliest practicable time.36

3.28 Section 72A establishes that the powers conferred upon special defence security officials under divisions 4 and 5 may be exercised by a defence security screening employee only if it is not practicable for the power to be exercised by a security authorised member of the Defence Force. Defence Minister the Hon Stephen

Smith MP stated that the non-consensual identification, search and seizure powers contained in divisions 4 and 5 will be:

...exercised by security authorised members of the Defence Force or, where such members are not reasonably available, by defence security screening APS employees during higher threat levels on all defence premises and at all times at defence's more sensitive sites. Under these circumstances, the

35 Defence Legislation Amendment (Security of Defence Premises) Bill 2010, ss. 71T and 71U.

36 Defence Legislation Amendment (Security of Defence Premises) Bill 2010, s. 72.

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powers would be exercised on a more frequent basis to provide an increased level of security in line with the assessed risk.37

The use of a dog to perform security functions

3.29 In performing security functions, a security authorised member of the Defence Force may, if considered 'reasonably necessary', use a dog to:

(a) assist with the conduct of a search (including a limited search);

(b) assist a defence security official to restrain or detain, or remove a person;

(d) assist a defence security official to perform a function or exercise a power under Part IVA.38

3.30 The Explanatory Memorandum states that the use of dogs under this provision is intended to improve Defence's capability to detect explosives and other hazardous materials and to detect and detain trespassers.39 Defence noted, moreover, that military working dogs are presently employed at a number of Defence sites, in particular around Air Force bases and that they are used to assist with 'protecting people and assets over an extended area, which can often be difficult to protect effectively through other means'.40

3.31 The Senate Standing Committee for the Scrutiny of Bills recognised that the use of dogs would improve capability to detect explosives and other hazardous material. However, it sought advice from the Minister about the justification for the need for dogs in relation to functions other than that to detect explosives and other hazardous material.41 Defence responded that:

The presence of military working dogs can also be a veiy effective deterrent to trespassers and assist in avoiding a situation escalating to a point where injuiy to personnel or damage to assets may occur.42

3.32 Defence further emphasised that it maintains 'stringent policies and procedures around the training and use of military working dogs' and that working dog handlers 'are required to only use such force as is reasonable and necessary and direct

37 The Hon Stephen Smith MP, Minister for Defence, Second Reading Speech, House Hansard, 29 September 2010, p. 12.

38 Defence Legislation Amendment (Security of Defence Premises) Bill 2010, s. 72M.

39 Explanatory * Memorandum, Defence Legislation Amendment (Security of Defence Premises) Bill 2010, p. 19.

40 Department of Defence, Submission 8A, p. 7.

41 Senate Standing Committee for the Scrutiny of Bills, At/e/V Digest No. 8 of2010, 27 October 2010, p. 37.

42 Department of Defence, Submission 8A, p. 7.

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their dogs in such a manner as to prevent unreasonable injury to persons or damage to property'. Defence emphasised that the use of dogs to assist with the conduct of searchers or other functions and powers under the bill is 'limited to security authorised Defence Force members who are also fully qualified dog handlers'.43

3.33 In relation to the use of a dog to conduct security functions, there are similar provisions in both federal and state legislation. Section 12A of the Australian Federal Police Act 1979 provides that an 'AFP dog handler' (who is a member or a protective service officer) is entitled, in entering, or being on or in, the premises or place, to be

accompanied by an AFP dog.

3.34 In New South Wales, Part 11 and 13 respectively of the Law Eiiforcement (Powers and Responsibilities) Act 2002 entitle police officers to use a dog to search a person for the purpose of detecting a drug offence or a relevant firearm or explosives offence. Under the Act, police can also use a dog to carry out general drug detection in relation to persons in or outside pubs and clubs, sporting events, concerts and other places of public entertainment as well as on certain public transport vehicles, platforms or stops. The Act requires that a police officer keep the dog under control and take reasonable precautions to ensure that it does not touch the person.

3.35 The committee recognises that the use of dogs can be an important and valuable aspect of policing when conducting searches and related security functions. The committee has considered the concerns raised by the Committee for the Scrutiny of Bills that dogs may be used by security authorised members to assist in restraining, detaining or removing persons. It notes, however, the limitation imposed by the legislation that dogs can only be used if considered 'reasonably necessary' and is satisfied by the assurances of Defence in regard to the training of the dogs and their handlers.

Safeguards on the exercise of power

3.36 Division 6 of the bill details the limitations and safeguards on the exercise of power by defence security officials.

3.37 In exercising their power, defence security officials are required under section 72B to produce an identity card for inspection by the person and to inform them of the effect of a refusal to comply with a request or requirement before making such a request or requirement. Similarly, defence security officials must not conduct a search (including a limited search) of a person, vehicle, vessel or aircraft without first producing their identity cards for inspection. Where the search is non-consensual, such officials must inform the person of the effect of hindering or obstructing the search before it is conducted.44

43 Department of Defence, Submission 8A, p. 7.

44 Defence Legislation Amendment (Security of Defence Premises) Bill 2010, ss. 72B(2).

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3.38 There are, however, exceptions to this provision. Under subsection 72B(3), officials are not obliged to produce their identity card or inform the person of the effect of hindering or obstructing the search prior to undertaking it where:

" a non-consensual search is required of a person, vehicle, vessel or aircraft about to pass a defence access control point; and

" there is reasonable grounds to believe that the person, vehicle, vessel or aircraft constitutes a threat to the safety of persons on defence premises; and

" the defence security official conducting the search produces his/her identity card as soon as practicable during or after the search and at that time, informs the person of the effect of hindering or obstructing the search.4:1

Protective service offences

3.39 The bill creates three new protective service offences:

" section 71V: refusing to provide evidence required under Division 4;

" section 71W: hindering or obstructing a search under Division 4; and

" section 72P: unauthorised entry on defence premises or defence accommodation.

3.40 In relation to section 71V, the Explanatory Memorandum states:

To assist with the enforcement of the non-consensual identification requirements under Division 4 of this Part, this section establishes an offence, carrying a maximum penalty of 20 penalty units, if a person who is on defence premises refuses or fails to provide evidence of their identity or authority to be on the premises, or provides information that is false in a

material particular.

However, the offence will not apply if the special defence security official did not comply with the requirement to produce their identity card and explain the effect of refusing to comply with the requirement, as stipulated at section 72B, before exercising a power under this Part.45 46

3.41 The Explanatory Memorandum also elaborated on section 71W, noting that this section carries a maximum penalty of 50 penalty units, 'if a person hinders or obstructs a search'. It also indicated that:

...the offence will not apply if the special defence security official did not comply with the requirement to produce their identity card and explain the

45 Defence Legislation Amendment (Security of Defence Premises) Bill 2010, ss. 72B(3) and Explanatory Memorandum, Defence Legislation Amendment (Security of Defence Premises) Bill 2010, p. 16.

46 Explanatory Memorandum, Defence Legislation Amendment (Security of Defence Premises) Bill 2010, p. 14.

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effect of refusing to comply with a search, as stipulated at section 72B, before exercising a power under this Part.47

3.42 The Senate Standing Committee for the Scrutiny of Bills argued that both section 71V and section 71W respectively amounted to a strict liability offence.48 It noted that whilst 71W was not expressed as such in the bill, the Explanatory Memorandum claims that it is.49 50 The committee sought clarification from the Minister as to whether and if so, why, it was intended that the offence proposed in section 71W be a strict liability offence. In its supplementary submission, Defence clarified that the Explanatory Memorandum 'incorrectly states' that 71W is a strict liability offence and that its text would be amended.30 The scrutiny committee raised a further matter as to whether consideration had been given to 'adequately warning' persons entering defence premises that they may be subject to a non-consensual search. It suggested that such a warning 'may offer a practical protection to personal rights without undermining the purposes sought to be achieved by the amendments'.51 Similarly, Victoria Police took the view that it was appropriate to inform persons entering defence premises that they may be subject to a non-consensual search and of the subsequent offence of refusal.52

3.43 When referring the bill for inquiry, the Selection of Bills Committee also noted 'whether the bill ought to provide for people entering defence premises to be notified that they may be subject to a non-consensual search and may be guilty of an offence if they do not cooperate'. 53

3.44 Such notification could be either oral or written. In terms of the latter, there are signboards at the entrance to Defence bases including that at the Holsworthy Base which state that it is a condition of entry that 'all persons present, upon request, any vehicle, bag, briefcase, or other container for security inspection upon entering and leaving'. Similar notification is explicitly provided for in relation to declared explosive ordnance depots under paragraph 71 L(1 )(b) of subdivision B of the bill:

Signs stating that it is a condition of entry that persons consent to searches as provided by this subdivision are to be prominently displayed at the

47 Explanatory Memorandum, Defence Legislation Amendment (Security of Defence Premises) Bill 2010, p. 14.

48 The application of strict liability negates the requirement to prove fault (A Giride to Framing Commonwealth Offences, Civil Penalties and Enforcement Powers, December 2007, p. 24).

49 Explanatory Memorandum, Defence Legislation Amendment (Security of Defence Premises) Bill 2010, p. 14.

50 Department of Defence, Submission 8A, p. 6.

51 Senate Standing Committee for the Scrutiny of Bills, Alert Digest No. 8 of2010, 27 October 2010, p. 34.

52 Victoria Police, Submission 3A, p. 1.

53 Senate Standing Committee for the Selection of Bills, Report No. 11 of2010, 30 September 2010, Appendix 11.

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entrance to the declared explosive ordnance depot and at regular intervals around the perimeter.54

3.45 However, there is no requirement at Defence bases or declared explosive ordinance depots for written notification of a possible non-consensual search and of the offence of non-compliance. Under subsection 71 L( 1), notification signs stating that a condition of entry is that a person consent to a search must be displayed at the

entrance of such a depot and at regular intervals around the perimeter.

3.46 The only other requirement is that in relation to Commonwealth land. The Crimes Act 1914 (subsection 89A(5)) determines that a notice is posted on prohibited Commonwealth land 'to the effect that trespassing upon the land is prohibited1.55 The sign at the North Bandiana barracks for example states:

Trespassing is prohibited. It is a punishable offence for a person to be on this property without lawful excuse.

3.47 The Western Australia Department of the Premier and Cabinet advised that the view of the Western Australia Police was that 'posted signage outlining these requirements would be sufficient to notify people entering defence premises'.56

3.48 In response to such views and concerns about appropriate notification, Defence stated that it intends to implement a number of administrative measures appropriate to the nature and composition of Defence premises (which includes movable assets including aircraft). Such measures would include:

(a) prominently displaying signs at the entrance to Defence bases or facilities notifying people that they, their earned items and vehicles may be subject to consensual and non-consensual searches;

(b) conducting a comprehensive awareness campaign, prior to the introduction of the Bill's measures to ensure that all Defence personnel and contractors are aware of the Bill's provisions and their rights and responsibilities in relation to consensual and non-consensual searches;

(c) incorporating appropriate advice on the Bill's provisions in recruitment material for all advertised Defence vacancies and tender to ensure prospective employees and contractors are aware of Defence's expectations and security requirements;

(d) addressing the Bill's provisions during staff and contractor induction training and in regular, mandatory security awareness training; and

54 Explanatory Memorandum, Defence Legislation Amendment (Security of Defence Premises) Bill 2010, p. 11.

55 Whilst there are trespass offences in the Defence Act 1903, there is no requirement for written notice of trespass equivalent to that in the Crimes Act 1914.

56 Western Australia Department of the Premier and Cabinet, Submission 9, p. 1.

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(e) requiring Defence Force members and public servants who are hosting or escorting visitors on Defence premises to notify visitors of search requirements.57

3.49 In terms of oral notification, as previously noted, subsection 72B(2) regarding non-consensual searches requires a defence security official to inform the person of the effect of hindering or obstructing the search before it is undertaken. Even in circumstances of exemption from this provision where there is reason to believe that the person or vehicle constitutes a threat, the involved official is required to inform the person of the effect of hindering or obstructing the search 'as soon as practicable while

conducting, or after conducting, the search'.58

Committee view

3.50 The need for adequate notification (oral and written) must be balanced against the need for practicality to ensure that provisions for notification are not overly onerous. Given the extent of Defence's estate which, according to the Minister covers in excess of three million hectares of land, the committee appreciates that the provision of signs across vast stretches of land would be an impractical undertaking.59

It does, however, recognise the various administrative measures that Defence has committed to implement to provide practical and effective alternatives. Such measures supplement the trespass signage required under the Crimes Act 1914 which already serves as a warning of entry to Commonwealth land. The committee considers this requirement as adequate notification in relation to the bill's third protective service offence concerning unauthorised entry on defence premises or defence accommodation (section 72P).

3.51 The committee recognises that the commitment of Defence to display signs prominently at the entrance to Defence bases or facilities notifying people of consensual and non-consensual searches requirements may alleviate the concerns raised by the scrutiny committee. It holds the view, however, that as the bill creates new offences, prior written warning about these offences should also be provided. It recommends, therefore, that such signs also clearly state that penalties apply for nonâ

compliance.

3.52 Written notification of the protective service offences of refusing to provide evidence when required or giving false evidence (71V) and hindering or obstructing a search (71W) coupled with the requirements on the part of defence security officials to inform the person orally of the effect of non-compliance would provide adequate and appropriate notification.

57 Department of Defence, Submission 8, p. 3.

58 Defence Legislation Amendment (Security of Defence Premises) Bill 2010, ss. 72B(3)(c).

59 The Hon Stephen Smith MP, Minister for Defence, Second Reading Speech, House Hansard, 29 September 2010, p. 13.

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Recommendation 1

3.53 The committee recommends that the Department of Defence signs at entrances to Defence bases and facilities provide notification that penalties may apply for offences under sections 71V and 71W respectively of the bill.

Update of trespass offence and associated arrest power

3.54 Item 2 of the bill repeals the existing subsection 82(3) of the Defence Act 1903 and replaces it with section 72P to ensure consistency with other provisions in the bill regarding defence premises. Under the new provisions, unauthorised entry or trespass is defined in the Act as an offence if the person enters or is on defence premises or defence accommodation and is not authorised to be there. The Explanatory Memorandum provides the rationale for the provision's extension to

include Defence accommodation within Australia:

Noting that accommodation buildings which are used by numerous Defence Force members represent a potentially attractive terrorist target, the policy intent is to ensure that defence accommodation has explicit coverage for the

puiposes of the trespass offence and related arrest power in the new Part. It is not intended, however, that the proposed search and related enforcement powers provided in the new Part will be exercised on defence

accommodation.60

3.55 The proposed subsection 72P(2) seeks to empower members of the ADF, AFP and state/territory police to arrest any person without a warrant if it is believed that the person has committed an offence of trespass. The offence of trespass is a protective service offence for the purposes of the Australian Federal Police Act 1979.

3.56 Section 72K requires a member the Defence Force who has arrested a person for trespass to bring the person before the AFP or member of the state or territory police as soon as practicable after the arrest.

3.57 The bill proposes to amend the monetary penalty of $40 for the offence of trespass with a new maximum penalty of $5500 for the offence of trespassing on defence premises or accommodation. In arguing that one of the most fundamental means to improve security at Defence premises is to deter unauthorised access to such sites, Defence emphasised that the current penalty is not sufficient to act as an effective deterrent and does not reflect the potential threat posed to security.61 It

60 Explanatory * Memorandum, Defence Legislation Amendment (Security of Defence Premises) Bill 2010, p. 5. See also statement by the Minister for Defence that as the department's estate covers over three million hectares of land, Defence proposes to address the challenge of detecting trespassers by increasing the use of optical surveillance on defence premises which may include 'video surveillance, including close circuit television, or CCTV'. The Hon Stephen

Smith MP, Minister for Defence, Second Reading Speech, House Hansard, 29 September 2010, p. 13.

61 Department of Defence, Submission 8, p. 6.

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noted, moreover, that the proposed penalty of 50 penalty points, equivalent to $5500 is in line with current Commonwealth criminal law policy.62

Optical surveillance

3.58 In light of the magnitude of Defence's holdings which pose a major challenge to detecting trespassers, particularly where detection is totally reliant upon the use of manned patrols, the bill introduces measures to enforce the new trespass offence. These measures facilitate the increased use of optical surveillance devices by Defence for the purposes of monitoring security at Defence premises and safety of people on them.63

3.59 Section 72Q provides Defence, the ADF or a contracted security guard with the power to collect information, including personal information by way of an optical surveillance device. Thereafter, Defence or the ADF may disclose information collected in this manner to an intelligence or security agency, AFP or state/territory police force, or to the Director of Public Prosecutions of the Commonwealth or a state

or territory. A disclosure of personal information in this form is authorised by law for the purposes of the Information Privacy Principle 11 in section 14 of the Privacy Act 1988.

Powers in relation to protests

3.60 Subsection 72L of the bill states that in exercising their powers, defence security officials 'must not stop or restrict any protest, dissent, assembly or industrial action', unless there is a reasonable likelihood of death or serious injury or the commission of a criminal offence.

Committee conclusion

3.61 Whilst the committee acknowledges the concerns raised by witnesses particularly in relation to the functions conferred on defence contracted security guards, it is satisfied that the limitations on their powers are adequate. The primary

function of defence contracted security guards is to exercise powers with consent. Only in defined circumstances are they able to restrain and detain a person in order to place them into the custody of a law enforcement official. Similarly, the committee is satisfied that the various limitations on the use of force including the provision that

such force be 'necessary and reasonable' provide adequate safeguards on the exercise of power.

3.62 The committee also recognises that ongoing consultation between Defence and the AFP and other federal agencies will be required to identify appropriate training for Defence security officials and address any concerns in relation to military

62 Department of Defence, Submission 8, p. 12.

63 Department of Defence, Submission 8 , p. 7.

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and civilian cooperation. It has noted that joint exercises between defence security officials and police may be an appropriate means to clarify the demarcation in power and responsibility between the respective forces.

3.63 Finally, the committee supports the initiative of Defence to display signs notifying people that they may be subject to consensual and non-consensual searches and recommends that in addition, such signs notify persons that penalties may apply for non-compliance with the non-consensual requirements.

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Chapter 4

The use of force

4.1 A key recommendation of the Review of Defence Protective Security Arrangements (the review) was to clarify the legal issues around Defence Force members acting in self-defence in the event of a no-warning armed attack on a defence base.1 In this chapter, the committee considers areas of concern associated

with the powers providing for the use of force including lethal force.

Legal regime for the use of force involving death or grievous bodily harm

4.2 Respective Commonwealth, state and territory legislation recognise the right to defend oneself and others who are threatened. Although Defence security officials have such rights, the bill seeks to clarify the legal issues surrounding designated Defence Force officials acting in self defence in the event of a no-warning attack on Defence premises. In this regard, Defence noted that the bill:

...will provide certainty as to the scope of actions that authorised and appropriately trained Defence Force members could take, rather than having to refer to the various Commonwealth, State and Territory

legislative provisions that provide a defence of self-defence.2

4.3 Sections 72H, 71X and 72G of the bill deal with the use of force by security authorised members of the Defence Force.3 Section 71X empowers such officials to take action to protect themselves or others in response to an actual or imminent attack on defence premises which is likely or intended to cause death or serious injury. According to the Explanatory Memorandum, for this purpose, an 'attack':

...covers an armed attack, attack by the detonation of an explosive device or any other conduct, whether or not involving firearms or explosives, which is designed to kill or could result in the death or serious injury of persons on defence premises.4

1 'Defence allowed to shoot terrorists', The Sydney Morning Herald, 24 June 2010, http://news.smh.com.au/breaking-news-national/defence-allowed-to-shoot-terrorists20100624z38v.html (accessed 1 October 2010), Senator the Hon Mark Arbib, Second Reading Speech, Senate Hansard, 24 June 2010, p. 4337.

2 Department of Defence, Submission 8 , p. 5.

3 A security authorised member of the Defence Force is a person who is an ADF member and authorised by the Minister or included in a class of persons authorised by the Minister and satisfies the training and qualification requirements determined by the Minister. See further section 71C of the Defence Legislation Amendment (Security of Defence Premises) Bill 2010.

4 Explanatory Memorandum, Defence Legislation Amendment (Security of Defence Premises) Bill 2010, p. 14.

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4.4 Subsection 72H(1) specifies that in using force, such an official must not do anything likely to cause the death of, or grievous bodily harm to, the person, unless there are reasonable grounds to believe that:

a) doing so is necessary to prevent the death of, or serious injury to, another person (including themselves); and

b) the threat of death or injury is caused by an attack on defence premises, or on people on defence premises, that is occurring or is imminent.

4.5 Provisions contained in 71X and 72H(1) provide, therefore, explicit authority to security authorised members of the Defence Force to use lethal force when under attack to prevent death or serious injury to themselves or others. No other defence security official is authorised under provisions of the bill to exercise force likely to cause death or grievous bodily harm.5 However, as a general rule applicable to all defence security officials including security authorised members of the Defence Force, the use of force must be 'necessary and reasonable'.6 The bill does not provide,

therefore, protection to a security authorised member of the Defence Force who uses force that is greater than that authorised.

4.6 Subsection 72H(2) provides that a security authorised member of the Defence Force may use lethal force on a person attempting to escape being detained by fleeing if the person has been called on to surrender and the official believes on reasonable grounds that the person cannot be apprehended in any other manner. Subject to provisions contained in subsection 72H(1), the use of lethal force on such a person is

only authorised if such a course of action is necessary to prevent death or serious injury to persons on defence premises in the event of an attack that is imminent or occurring.

4.7 This provision is modelled on Section 5IT of the Defence Act 1903 which applies to the use of reasonable and necessary force by Defence Force members in assisting civilian authorities under Part *â *Ã´*Ã«*Ã«*Ã«. According to the Explanatory Memorandum, consistency across both sections will ensure the same rules apply to the use of force under Part IIIAAA and this new Part, thereby providing, from an operational perspective, 'certainty in situations where both regimes could potentially apply at different points of time'.7

4.8 Whilst clarifying the powers of appropriately trained and authorised members of the Defence Force in relation to the use of lethal force, the bill does not alter the primacy of civil law enforcement authorities in responding to security incidents at

5 Explanatory Memorandum, Defence Legislation Amendment (Security of Defence Premises) Bill 2010, pp. 14, 17-18.

6 Defence Legislation Amendment (Security of Defence Premises) Bill 2010, ss. 71G(1).

7 Explanatory Memorandum, Defence Legislation Amendment (Security of Defence Premises) Bill 2010, p. 18.

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defence premises. Defence Minister, the Hon Stephen Smith MP stated in this regard that:

A full response to a terrorist incident clearly remains the responsibility of civil law enforcement authorities, and would be managed under the National Counter-Terrorism Plan.8

4.9 The Senate Scrutiny of Bills Committee voiced concerns in relation to the extraordinary power of lethal force. The committee raised the general question of whether an 'appropriate balance had been struck' between 'personal rights and liberties and interests' in maintaining the security of Defence bases and responding to security threats.9 The scrutiny committee took the view that the central question of whether these significant new powers trespass on personal rights and liberties unduly is a matter 'to be left to the Senate as a whole'.10

Legal regime for the use of non-lethal force

4.10 In contrast to the powers granted to security authorised members of the Defence Force, contracted defence security guards and defence security screening employees who are Australian Public Service employees of the Department of Defence are not empowered to use lethal force.

4.11 Subsection 72G(2) specifies that a contracted defence security guard or defence security screening employee must not, in using force, 'do anything that is likely to cause the death of, or grievous bodily harm to, the person'.

4.12 Whilst the use of lethal force is prohibited under this provision, such officials would be able, when acting in self-defence, to rely upon Commonwealth, state and territory statutory offences and the common law on self-defence as previously noted.

Scope of defence premises

4.13 The Senate Standing Committee for the Scrutiny of Bills raised concerns about the scope of defence premises in light of the seriousness of the powers conferred on officials including non-consensual search powers and the use of lethal force. It queried whether defence premises as defined in section 71A 'includes land which may have a defence puipose, but which is also being used for another purpose (such as an

8 The Hon Stephen Smith MP, Minister for Defence, Second Reading Speech, House Hansard, 29 September 2010, p. 11.

9 Senate Standing Committee for the Scrutiny of Bills, Alert Digest No. 8 of2010, 27 October 2010, p. 35.

10 Senate Standing Committee for the Scrutiny of Bills, Alert Digest No. 8 of2010, 27 October 2010, p. 35.

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immigration facility)'. It also questioned whether it was appropriate for such powers to apply in relation to all defence premises.11

4.14 The committee notes that Defence leases property and office space to contractors, other government agencies and to local civic authorities. The terms of such leases range from 1 year to 99 years.1" It also notes that the bill defines defence premises as land, place, building or other structure, vessel, vehicle or aircraft 'that is in Australia, and is owned or occupied by the Commonwealth for use by the Defence Force or the Department'.13 In light of questions surrounding the scope of Defence premises, Defence highlighted that land or buildings that may have a Defence purposes, 'but which are not currently used by the Defence Force or the Department of Defence do not meet the definition of defence premises included in the Bill'. It noted in its supplementary submission that the Explanatory Memorandum would be amended to include a statement to this effect.14

4.15 The committee recommends that the government look closely at the definition of defence premises in the bill to ensure that its meaning is clear and unambiguous and does not extend to Defence property that is being used in part, temporarily or

otherwise for other purposes.

Committee conclusion

4.16 The committee recognises that the bill provides a range of powers to designated defence security officials to enable the ADF and Defence to deter, detect and respond to incidents that threaten the security of Defence bases, facilities, assets and personnel within Australia. It is satisfied that the safeguards placed on the powers conferred on defence security officials are adequate to ensure that such powers are utilised appropriately.

11 Senate Standing Committee for the Scrutiny of Bills, Alert Digest No. 8 of2010, 27 October 2010, p. 34.

12 Department of Defence, Defence Annual Report 2008-09 , Schedule of Commitments as at 30 June 2009, http://www.defence.gov.au/budget/08-09/dar/voll/append09 08.htm (accessed 9 November 2010).

13 Defence Legislation Amendment (Security of Defence Premises) Bill 2010, s.71 A.

14 Department of Defence, Submission 8A, p. 3.

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Chapter 5

Training of defence security officials

Adequacy of training

5.1 When referring the bill for inquiry, the Senate Standing Committee for the Selection of Bills identified two issues dealing with training for the committee's consideration including 'whether defence personnel are adequately trained and equipped to safely detain civilians in accordance with the bill'.1

5.2 Indeed, the importance of training was one of the dominant messages coming from the submissions. Victoria Police was firmly of the view that authorised officers and contracted defence security guards would require specialist training to ensure the appropriate exercise of search and related powers. It noted that they would need this training, 'to deal with statutory powers of arrest, detention, search of persons as well as search and seizure of property for both safety and evidence purposes'.2 Similarly, the Tasmania Police referred to Defence's 'obligation to provide training for security officers at an appropriate level in relation to any legislative authorities, especially

stop, search and detention issues for people and the use of lethal force'.3 The Senate Standing Committee for the Scrutiny of Bills also raised questions in relation to the powers of defence security officials, including contracted security guards, to restrain and detain. It took the view that the bill 'does not deal with the adequacy of the training of defence security officials to ensure these 'police powers' are exercised safely and appropriately',4

5.3 Clearly, training is important to ensure that defence security officials cany out their duties appropriately. Training is especially important for officers authorised to use lethal force. Thus, although the New South Wales Police did not have any major

concerns in relation to the bill, it did comment on training requirements for staff authorised to use lethal force.5

5.4 In response to the concerns about the training of security officials, Defence held that:

Under the provisions of the amendments, all Defence security officials must satisfy stringent training and qualification requirements before they can

1 Senate Standing Committee for the Selection ofBills, Report No. 11 of2010, 30 September 2010, Appendix 11.

2 Victoria Police, Submission 3A, p. 1.

3 Commissioner of Police, Tasmania, Submission 10, p. 1.

4 Senate Standing Committee for the Scrutiny of Bills, Alert Digest No. 8 of2010, 27 October 2010, p. 34.

5 NSW Department of Premier and Cabinet, Submission 7, p. 1.

exercise any of the powers contained in this Bill, including the power to restrain and detain people. These training and qualification requirements, which will be specified in a legislative instrument, must be determined by the Minister for Defence or his delegate.6

5.5 The bill stipulates that the Minister must, by legislative instrument determine the training and qualification requirements for *contracted defence security guards; security authorised members of the Defence Force; defence security screening employees and those that apply to security authorised members of the Defence Force in relation to the use of dogs.7

5.6 In the case of contracted defence security guards and defence security screening employees; the Minister may by writing delegate this power to the Secretary or an APS employee holding or performing the duties of a SES band 3 position, an equivalent or higher position. For security authorised members of the Defence Force; the Minister may delegate this power by writing to an ADF officer of three star rank or higher. According to the Explanatory Memorandum:

This will allow developments in training associated with the use of force, to be more readily incorporated into the training requirements for security authorised members of the Defence Force.8

Training requirements in legislative instruments

5.7 While the Senate Standing Committee for the Scrutiny of Bills highlighted that the bill does not deal with the adequacy of training to ensure that conferred powers are exercised 'safely and appropriately' it also questioned whether 'appropriate parameters' for training requirements should be included in the bill.9 It questioned why training and qualifications in relation to security authorised members of the Defence Force were not dealt with in the primary legislation. Its concern was that there are no provisions which allow it to assess with confidence 'the question of whether officers entitled to use lethal force will have received appropriate training and instruction'.10 The Senate Standing Committee for the Selection of Bills also questioned whether it was appropriate to leave training requirements for officers authorised to exercise deadly force to be specified in legislative instrument.11

6 Department of Defence, Submission 8, p. 4.

7 Subsections 71B(4), 71C(4) and 71D(4) and paragraph 71C(5)(b).

8 Explanatory Memorandum, Defence Legislation Amendment (Security of Defence Premises) Bill 2010, p. 9.

9 Senate Standing Committee for the Scrutiny of Bills, Alert Digest No. 8 of2010, 27 October 2010, p. 34.

10 Senate Standing Committee for the Scrutiny of Bills, Alert Digest No. 8 of2010, 27 October 2010, p. 35.

11 Senate Standing Committee for the Selection of Bills Committee, Repoi-t No. 11 of 2010, 30 September 2010, Appendix 11.

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5.8 The New South Wales Department of Premier and Cabinet, however, cautioned that if training requirements are embedded in the bill, there may be concerns that 'if an officer uses the requisite powers without having completed all of the training requirements then he or she may be acting unlawfully'.12 The submission

acknowledged, however, that the majority of these powers already exist in any event. Indeed, in such an event where force is used in a self-defence capacity, such officials would continue to be able to rely upon the federal and state or territory legislative provisions that provide a defence of self-defence.

5.9 Given the extraordinary powers involved, the committee acknowledges the concerns raised in relation to the training requirements for officers empowered to use deadly force being specified in legislative instrument rather than the primary legislation. However, it also appreciates that the security environment is fluid and dynamic and that training requirements must be responsive to such changes. In this regard, the need for training requirements in relation to all defence security personnel to adapt in a timely manner is vital to a dynamic security environment in which such officials operate. In its submission, Defence highlighted this consideration:

The use of a legislative instrument also enables the training and

qualification requirements to be updated rapidly, for example in response to the availability of new technologies and equipments, without incurring the delays that would arise if these requirements were stipulated within the Bill itself.13

5.10 The committee recognises that delegation of legislative power would be more amenable to such adaptation. The Legislative Instruments Handbook notes in this regard:

Delegation of legislative power allows matters of a detailed technical nature to be dealt with more efficiently than is possible through the Parliamentary processes. Legislative instruments can be made and amended more quickly and easily than primary legislation. If Parliament did not delegate the power to make legislative instruments, the legislative process would become slower and more congested.14

5.11 The committee appreciates that any such legislative instrument would need to be tabled in both Houses of Parliament and be subject to disallowance in accordance with the Legislative Instruments Act 2003. Defence argued that this requirement provides significant protection:

As a legislative instrument is subject to tabling and potential disallowance in both houses of Parliament, the use of this mechanism affords significant protection. It ensures that the Parliament, at all times, has control over the nature and level of training and qualification requirements that will be

12 New South Wales Department of Premier and Cabinet, Submission 7, p. 1.

13 Department of Defence, Submission 8, p. 2.

14 Attorney-General's Department, The Legislative Instruments Handbook, December 2004, p. 8.

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imposed on people who will be authorised to exercise powers under this Bill. This affords a far greater level of protection than having the training and qualification requirement set out in departmental administrative guidance.15

5.12 For comparative purposes, the committee looked at a relevant section of the AFP regime in relation to the use of force.

The AFP regime

5.13 Section 40EA of the Australian Federal Police Act 1979 states that the Commissioner may declare an AFP employee (other than a member) to be a protective service officer if the Commissioner is satisfied that the employee meets the requirements specified in a determination under section 40EB which in turn states:

The Commissioner may, by written determination, specify either or both of the following for the purposes of section 40EA:

(a) competency requirements;

(b) qualification requirements.

5.14 In terms of overriding principles in relation to the application of the use of force, the AFP Commissioner's Order 3 sets out the operational guidelines. In the exercise of his or her powers under section 38, the Commissioner may, by writing, 'issue orders with respect to the general administration of, and the control of the operations of, the Australian Federal Police'. Furthermore, section 39 requires AFP appointees to comply with Commissioner's Orders. The AFP Commissioner's Order 3 sets out the operational guidelines for the use of force for AFP officers. Order 3 is an internally generated guideline which:

...gives effect to the policy of the AFP for the use of reasonable force and its implementation through the establishment and maintenance of appropriate competency standards, the accreditation of trainers, the qualification and re-qualification of AFP employees in the use of force, appropriate reporting mechanisms and management structures for training and monitoring use of force in the AFP.16

5.15 The purpose of order 3 is to ensure that the AFP operates to de-escalate potential conflict situations within the use of force continuum. The AFP 'stresses the use of minimum force and maintains the preference at all times to resolve incidents

15 Department of Defence, Submission 8, p. 3.

16 Australian Federal Police, Submission No. 278 to the Senate Select Committee on Mental Health Inquiry into the Provision of Mental Health Services in Australia, 2006, http://www.aph.gov.au/senate/committee/mentalhealth ctte/submissions/sub278.pdf(accessed 3 November 2010).

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without force.'17 The order, which is a confidential document, notes that the 'use of reasonable force underpins all AFP conflict management strategies and the AFP's use of force model'.18 It determines that the use of reasonable force is the 'minimum force reasonably necessary in the circumstances of any particular case'.

5.16 Whilst setting out the basis on which equipment and munitions can be used and emphasising the importance of non-violent options including negotiation, the code requires officers to submit an AFP Use of Force Report following its application and detailing the circumstances and manner in which force was applied.19

Committee view

5.17 The committee underscores the importance of training in relation to defence security officials and emphasises that training undertaken by such officials should be informed by the AFP and state police regimes. Given the fluidity of the security

environment in which they are expected to operate, the training regime for defence security officials must be both robust and responsive. To this end, the committee reaffirms the importance of ongoing consultation between Defence and the AFP and other federal agencies as well as regular joint exercises.

5.18 The committee considers that determining training requirements in legislative instrument is appropriate to the extent that flexibility is required to enable timely modifications to the training requirements in response to the changing nature of security threats. It notes, moreover, that any such modifications would attract parliamentary scrutiny to ensure that provisions therein are balanced.

5.19 The committee recognises the importance of the principle of proportionality on which all training should be based especially when officers are empowered to use lethal force. It encourages the ADF to consider inclusion of the principle in delegated

legislation. In this regard, the committee notes the AFP Commissioner's Order and encourages the ADF to give consideration to it.

17 Australian Federal Police evidence to ACT Legislative Assembly Standing Committee on Legal Affairs, Police Powers of Crowd Control, Report 6, May 1997, p. 42, http://www.parliament.act. gov.au/downloads/reDorts/06%20police%20powers%20fmal.pdf (accessed 3 November 2010).

18 Commissioner's Order 3 cited in ACT Legislative Assembly Standing Committee on Legal Affairs, Police Powers of Crowd Control, Report 6, May 1997, p. 35, http://www.parl iament.act.gov.au/downloads/reports/06%20police%20powers%20final .pdf (accessed 3 November 2010).

19 Australian Federal Police evidence to ACT Legislative Assembly Standing Committee on Legal Affairs, Police Powers of Crowd Control, Report 6, May 1997, p. 35, http://www.paiiiament.act.gov.au/downloads/reports/06%20police%20powers%20final.pdf (accessed 3 November 2010).

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Recommendation 2

5.20 The committee recommends that the Australian Defence Force give consideration to the utility of the inclusion of the *reasonable and necessary' principle in delegated legislation.

Committee conclusion

5.21 The committee recognises that the bill provides a range of powers to defence security officials to enhance security of Defence bases, facilities, assets, and personnel within Australia. Notwithstanding its recommendation that training be consistent with the 'reasonable and necessary' principle, the committee is satisfied that the safeguards on the powers conferred on defence security officials are adequate to ensure that such powers are utilised appropriately.

Recommendation 3

5.22 The committee recommends that the Senate pass the bill.

5.23 Whilst noting that the bill introduces new provisions in relation to defence personnel including the power to exercise lethal force, to search and seize, restrain and detain, the committee appreciates that security threats are dynamic in nature. To ensure that such provisions are adequately responsive to ever-changing security risks and meet their objectives, the committee proposes to review the operation of the bill three years after enactment, having specific regard to matters considered in this report and any other concerns raised during its lifetime.

Recommendation 4

5.24 That the Senate Standing Committee on Foreign Affairs, Defence and Trade review the operation of enacted provisions of the bill in early 2014.

SENATOR MARK BISHOP CHAIR

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Appendix 1

Public submissions

Mr Clive Williams

South Australia Police

Victoria Police

Police Federation of Australia

Northern Territory Government

ACT Legislative Assembly

NSW Department of Premier and Cabinet

Department of Defence

WA Department of the Premier and Cabinet

Commissioner of Police, Tasmania

177

178

Appendix 2

Supplementary submission *Department of Defence

179

180

SUPPLEMENTARY DEPARTMENTAL SUBMISSION TO THE SENATE FOREIGN AFFAIRS, DEFENCE AND TRADE LEGISLATION COMMITTEE ON THE DEFENCE LEGISLATION AMENDMENT (SECURITY OF DEFENCE

PREMISES) BILL 2010

Department of Defence January 2011

181

182

TABLE OF CONTENTS

Page

Section 1: Response to the House debate, 25 October 2010 and the Bills Digest No 29 of 2010-11, dated 29 1 October 2010

Section 2: Response to the Senate Standing Committee for the Scrutiny of Bills, regarding issues in Alert Digest 8/10 of 27 October 2010

Section 3: Response to other submissions lodged with the Senate Foreign Affairs, Defence and Trade Legislation Committee

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Section 1: Response to the House debate, 25 October 2010 and the Bills Digest No. 29 of 2010-11, dated 29 October 2010

Issue - In what circumstances and manner may Australian Defence Force members use lethal force under the provisions contained in this Bill.

1.1 Detailed information on the Department *s protective security arrangements, including the proposed rules of engagement for authorised Australian Defence Force (ADF) members using reasonable and necessary force in the event of an attack on a Defence base, are not publicly released for security reasons. However, in accordance with this legislation, potentially

lethal force will only be used by authorised ADF members to protect people on a base from death or serious injury in the event of an attack that is imminent or occurring. Authorised ADF members will only draw weapons and ammunition on the order of the senior ADF officer on base, or in accordance with the base response plan. Provision will be made, as appropriate, for suitably trained and authorised ADF members to have ready but controlled access to weapons and ammunition to allow them to protect life in the event of an attack. The use of force in this context will be supported by training and rehearsals.

1.2 The purpose of the provisions addressing the use of lethal force is to protect people. That said, the protection of people would, of course, extend to people working on, or securing assets located on Defence premises, therefore indirectly protecting those assets.

Issue - Use of contracted security guards rather than Australian Defence Force members to provide security at the entrances and perimeters to Defence bases.

1.3 The use of ADF members to undertake routine 'static' guarding duties at low threat levels across all Defence sites is not a cost effective use of this highly trained resource. Moreover, noting the significant personnel numbers that would be involved, this would also have an adverse impact on ADF training and operational availability.

1.4 At lower threat levels, security at Defence bases will involve a combination of contracted security guards, civil police and, at some sites, Australian Federal Police (AFP) Protective Service Officers. At higher threat levels, ADF members would likely takeover the guarding function at Defence

bases given their increased range of powers under the Bill, vis-a-vis contracted security guards, including the power to require identification, conduct non-consensual searches, seize items and, if necessary, take action to make a seized item safe.

1.5 All bases will have well-rehearsed arrangements in place to deal with a noâ warning attack.

184

Issue - Costs associated with the implementation of the Bill *s measures.

1.6 Funding for implementation of the Bill *s measures will be met from internal Defence resources that have been allocated to the Base Security Improvement Program. As is the case for the rest of Base Security Improvement Program, the extent of the implementation of the Bill's measures at each site will be informed by security risk assessments, with measures appropriately tailored to each site and the available budget allocation. This will ensure that the cost of implementing measures is

proportionate to the anticipated risk reduction that can be achieved at each site and that Defence remains within its approved budget.

Comments in Bills Digest No. 29 of 2010-11

1.7 It is noted that the Law and Bills Digest Section of the Parliamentary Library have reported on the Bill. The Bill notes two issues.

1.8 The first issue identified in the Digest notes that the Bill does not define the term *attack *. The term is used in the Bill in relation to the power of an authorised ADF member to use potentially lethal force if there is a threat of death or injury to a person caused by an attack on defence premises, or

people on those premises, that is occurring or imminent. In this respect, any attempt to define terms relating to this provision risks limiting the broad protection that this provision currently affords authorised ADF members in

protecting people on Defence premises.

1.9 The second issue noted by the Bills Digest is that the Bill does not provide protection to an ADF member who exercises greater force than is authorised. In the same context, the Digest notes that the Bill does not contain a provision corresponding to section 51WB in Part IIIAAA of the D efence Act 1903 ; a part that primarily deals with the utilisation of the

Defence Force in situations of domestic violence, such as terrorist attacks. Section 51WB provides a defence to a charge if an ADF member has done a criminal act under an order of a superior, provided certain criteria can be

made out. The section was inserted into Part IIIAAA as part of a package of measures that allowed action to be taken against aircraft (including passenger aircraft) or ships, which may have been taken over as part of a terrorist action for use against other sites. In these circumstances, such a provision was considered appropriate given the potential for mass innocent casualties flowing from Defence Force action.

1.10 That said, section 51WB is not limited on its face to this type of action and applies to any action covered by Part IIIAAA. Consequently, as implied by the Bills Digest, a corresponding provision could be inserted into the base security regime proposed in the Bill. This is not seen as desirable as the

base security amendments are more limited and are intended to provide an immediate response to an attack on a base, rather than involving more complex use of force issues that arise in responding to a Part IIIAAA event, such as the need to consider shooting down a passenger aircraft over a major city.

185

Section 2: Response to the Senate Standing Committee for the Scrutiny of Bills, regarding issues in Alert Digest 8/10 of 27 October 2010

Issue: Whether the definition of defence premises includes land which may have a Defence purpose , but which is also being used for another purpose

(such as an immigration facility) and generally whether it is appropriate for the amendments to apply to all defence premises.

2.1 Land or buildings that may have a Defence purpose, but which are not currently used by the Defence Force or the Department of Defence do not meet the definition of defence premises included in the Bill. So, for example, the provisions in the Bill would not apply to an immigration facility that is located on a former Defence base that is not currently used by the

Defence Force or the Department. Similarly, if a portion of an operational base was set aside for a use that is unrelated to the Defence Force or the Department, the provisions of the Bill would not apply to that portion of the base. The Department will amend the Explanatory Memorandum to include a statement to this affect.

2.2 Defence facilities, assets and personnel are potentially attractive targets for terrorist groups. In addition, many Defence facilities house dangerous, restricted or classified items. To ensure that the Department can appropriately safeguard Defence facilities, assets and personnel and prevent the unlawful removal of dangerous or classified items, Defence requires the ability to exercise the powers contained in the Bill at all of its premises. In practice, the exercise of the powers contained in the Bill and the proposed use of the various classes of Defence security officials will be dependent on the nature of the site and the assessed level of the security threat, typically determined on the basis of intelligence.

Issue: Whether consideration has been given to adequately warning

persons entering Defence premises that they may be subject to non~

consensual searches.

2.3 The Department intends to implement a number of administrative measures to ensure that people entering Defence premises are aware of the requirements, obligations and consequences arising from the search regime in the Bill. Given the diverse nature and composition of Defence premises, the definition of which includes movable assets such as aircraft, vessels and vehicles, the selection and implementation of these measures will be tailored to the particular circumstances of each Defence premise.

Measures will include:

(a) prominently displaying signs at the entrance to Defence bases or facilities notifying people that they, their carried items and vehicles may be subject to consensual and non-consensual searches;

(b) conducting a comprehensive awareness campaign, prior to the introduction of the Bill *s measures, to ensure all Defence personnel

186

and contractors are aware of the Bill *s provisions and their rights and responsibilities in relation to consensual and non-consensual searches;

(c) incorporating appropriate advice on the Bill *s provisions in recruitment material for all advertised Defence vacancies and tenders to ensure prospective employees and contractors are aware of Defence *s expectations and security requirements;

(d) addressing the Bill *s provisions during staff and contractor induction training and in regular, mandatory security awareness training; and

(e) requiring Defence Force members and public servants who are hosting or escorting visitors on Defence premises to notify visitors of search requirements.

2.4 Further, Defence would highlight that section 72B of the amendments require Defence security officials to notify people, before making a request or requirement under the Bill *s provisions, of the affect of refusing or hindering the request or requirement.

Issue: Concerns about the adequacy of the training of Defence security

officials to ensure the restrain and detain powers are exercised safely and appropriately, and whether appropriate parameters for training

requirements can be included in the Bill.

2.5 The Bill makes provision for Defence security officials to restrain and detain a person for the purposes of placing them in the custody of police or a protective security officer at the earliest practicable time. This power can only be exercised if the person is located on Defence premises and either

refuses or fails to comply with an identification or search requirement or, as a result of complying, the Defence security official reasonably believes the person is not authorised to be on the premises, constitutes a threat to safety or has (or may) commit a criminal offence.

2.6 The ability to restrain and detain people is a fundamental component of the proposed search regime detailed in the Bill. Without the ability to restrain and detain people for the purposes of placing them in police custody, Defence will be unable to mitigate the risk of dangerous or classified items

being improperly removed from Defence premises.

2.7 Under the Bill, all Defence security officials must satisfy training and qualification requirements before they can exercise any of the powers contained in the Bill, including the power to restrain and detain people. These training and qualification requirements, which will be specified in a

legislative instrument, must be determined by the Minister for Defence or his delegate and will be stringent.

2.8 Defence is currently consulting with other Federal agencies, such as the Australian Federal Police and the Australian Customs and Border Protection Service, to assist in identifying the appropriate training and qualification requirements for Defence security officials.

187

2.9 The training requirement for contracted security guards under this Bill, and as determined by the Minister for Defence, will build upon and enhance the existing training regime as mandated in Defence security policy. Current Defence policy demands that contracted security guards meet a number of

requirements that includes the successful completion of a Certificate II in Security Operations and the provision of services in accordance with relevant legislation, including general criminal legislation which controls the use of force. Additional mandatory requirements state that Defence contracted security guards:

(a) must be licensed to carry out the required security function by the relevant State or Territory in which the Defence facility is located;

(b) must hold a minimum security clearance of CONFIDENTIAL;

(c) must provide services in accordance with any relevant enactment or direction by the regulatory authority in each State and Territory and Australian Standard (AS) 4421 Guards and Patrols; and

(d) must possess a current drivers licence and a first aid qualification or competency.

2.10 In addition, contracted security guards must complete a Defence-endorsed training package covering the following topics:

(a) Defence security policy and relevant laws;

(b) Defence protocols such as rank structure and customer service;

(d) Defence policing; and

(e) the Defence security alert system.

2.11 Australian Public Service employees who are to be appointed as Defence security screening employees and security authorised Defence Force members will be required to undergo comparable training to contracted security guards, appropriately augmented to address the additional powers available to these two categories of Defence security officials.

2.12 The Department *s position is that it is appropriate from a legal policy perspective that the training and qualification requirements for Defence security officials, including training requirements for the restrain and detain powers, be specified in a legislative instrument. As a legislative instrument is subject to tabling and potential disallowance in both Houses of

Parliament, the use of this mechanism affords significant protection. It ensures that the Parliament, at all times, has control over the nature and level of training and qualification requirements that will be imposed on people who will be authorised to exercise powers under this Bill. This affords a far greater level of protection than having the training and qualification requirement set out in departmental administrative guidance.

168

2.13 The use of a legislative instrument also enables the training and qualification requirements to be updated rapidly, for example in response to the availability of new technologies and equipment, without incurring the delays that would arise if these requirements were stipulated within the Bill

itself.

Issue: Justification for the provisions allowing and limiting the use of deadly force, together with concerns about of the adequacy of the training and qualification requirements and whether parameters for these can be included within the primary legislation.

2.14 A key rationale behind the development of the Bill is the requirement to clarify the legal issues surrounding Defence Force members acting in self defence in the event of a no-warning attack on Defence premises.

2.15 Australian law recognises the right to protect yourself or others who are threatened. This currently provides a legal basis for Defence Force members to use reasonable and necessary force to protect themselves, or others, in the event of an attack on Defence premises. This Bill, however, will provide certainty as to the scope of actions that authorised and appropriately trained Defence Force members could take, rather than

having to refer to the various Commonwealth, State and Territory legislative provisions that provide a defence of self-defence.

2.16 The Department *s position is that it is appropriate from a legal policy perspective that the training and qualification requirements for Defence security officials, including training requirements for appropriately authorised Defence Force members who may be required to exercise potentially lethal force in the context of base security, be specified in a legislative instrument. As a legislative instrument is subject to tabling and potential disallowance in both Flouses of Parliament, the use of this mechanism affords significant protection. It ensures that the Parliament, at all times, has control over the nature and level of training and qualification

requirements that will be imposed on people who will be authorised to exercise powers under this Bill. This affords a far greater level of protection than having the training and qualification requirement set out in departmental administrative guidance.

2.17 The use of a legislative instrument also enables the training and qualification requirements to be updated rapidly, for example in response to the availability of new technologies and equipment, without incurring the delays that would arise if these requirements were stipulated within the Bill itself.

Issue: Whether, and if so why, it is intended that the proposed offence

@ 71W of hindering or obstructing a search be regarded as a strict liability offence.

2.18 The Explanatory Memorandum incorrectly states this is a strict liability offence. It will be amended to correct this error.

189

Issue: Justification of the use of dogs for functions other than to detect explosives or other hazardous materials.

2.19 The primary use of dogs is for the protection of people and assets. Apart from their role in the detection of explosives or other hazardous material, dogs may be used by security authorised Defence Force members to deter, detect and, if required, apprehend trespassers for the purposes of

placing them in the custody of the police or a protective service officer at the earliest practicable time (ie restrain and detain).

2.20 Military working dogs are presently employed at a number of Defence sites, in particular around Air Force bases. They are used to assist with the protection of people and assets over an extended area, which can often be difficult to protect effectively through other means. The presence of military working dogs can also be a very effective deterrent to trespassers and assist in avoiding a situation escalating to a point where injury to personnel or damage to assets may occur.

2.21 Defence maintains stringent policies and procedures around the training and use of military working dogs and the training of dog handlers. At all times, military working dog handlers are required to only use such force as is reasonable and necessary and direct their dogs in such a manner as to

prevent unreasonable injury to persons or damage to property.

2.22 The use of dogs to assist with the conduct of searches or other functions or powers under this Bill is limited to security authorised Defence Force members who are also fully qualified dog handlers.

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Section 3: Response to other submissions lodged with the Senate Foreign Affairs, Defence and Trade Legislation Committee

3.1 While submissions to the Committee from other organisations were generally supportive, there were some instances when the submissions reflected a misunderstanding of some aspects of the Bill or its intended implementation. The following information is provided to clarify these matters.

Victoria Police - consideration should be given to legislate for Federal and State Police to have the same security powers as Defence Security Officials.

3.2 This is a matter for State and/or Federal government consideration and Defence has no position on this matter.

Police Federation of Australia - concerns with Police-style powers being granted to individuals who are not fully trained, sworn officers.

3.3 The Bill does not alter the primacy of civil law enforcement authorities in responding to security incidents at Defence premises. The proposed statutory regime incorporates safeguards that ensure that personnel exercising powers under the Bill have been authorised by the Minister for

Defence and have satisfied a minimum level of training and qualification requirements as determined by the Minister or his delegate. For further information on training of Defence security officials, please refer to our response to the Senate Standing Committee for the Scrutiny of Bills.

Police Federation of Australia - assurance as to the scope of work of contracted Defence security guards.

3.4 Contracted security guards currently perform a range of protective security functions at Defence bases. The powers available to contracted security guards under this Bill have been deliberately limited. Contracted security guards will only be authorised to request evidence of a person *s

identification, conduct consensual searches and, in defined circumstances, restrain and detain a person for the purposes of placing them in the custody of a law enforcement officer.

3.5 In addition, under the Bill contractors, subcontractors or their employees who provide security services at Defence premises must be authorised by the Minister by written instrument to be Defence contracted security guards. The Minister will only be able to authorise as contracted security guards, persons who have met a standard of security training as determined by the Minister by legislative instrument.

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Police Federation of Australia - assurance that Defence security guards * functions will be strictly confined to Defence bases and premises and the immediate surrounds of those establishments.

3.6 The powers contained in the Bill for all categories of Defence security officials are only exercisable on Defence premises. This is defined as any area of land or other place, a building or other structure, a vehicle, vessel or aircraft, or a prohibited area within the meaning of the D efence (Special

U ndertakings) Act 1952, which is located in Australia and is owned or occupied by the Commonwealth for use by the Defence Force or the Department.

Government of Western Australia, Department of Premier and Cabinet,

Office of the Director General - in regard to State or Federal police

responding to incidents at Defence facilities, consideration could be given to a waiver of the screening of attending police to facilitate a timely

response to an incident.

3.7 The powers contained in the Bill are discretionary and in practice the exercise of these powers by Defence security officials will be dependent on the nature of the site and the assessed level of security threat. In the event of a security incident requiring a police response, these arrangements will

be altered accordingly if required.

3.8 Local emergency services are involved in the preparation of base security response plans to confirm response arrangements and assistance required in the event of a security incident. This would include procedures addressing the issue outlined above.

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The Senate

Legal and Constitutional Affairs

Legislation Committee

Australian Capital Territory (Self-Government) Amendment (Disallowance and Amendment Power of the Commonwealth) Bill 2010, together with the amendments on sheet no. 7031,

circulated by the Australian Greens

May 2011

193

Â© Commonwealth of Australia

ISBN: 978-1-74229-442-1

This document was printed by the Senate Printing Unit, Department of the Senate, Parliament House, Canberra.

MEMBERS OF THE COMMITTEE

Members

Senator Patricia Crossin, Chair, ALP, NT

Senator Guy Barnett, Deputy Chair, LP, TAS

Senator Mark Fumer, ALP, QLD

Senator Scott Ludlam, AG, WA

Senator Stephen Parry, LP, TAS

Senator Louise Pratt, ALP, WA

Substitute Member

Senator Michael Forshaw, ALP, NSW replaced Senator Mark Fumer for the committee's inquiry into the Australian Capital Territory (Self-Government) Amendment (Disallowance and Amendment Power of the Commonwealth) Bill 2010, together with the amendments on sheet no. 7031, circulated by the Australian Greens

Participating Members

Senator the Hon. George Brandis SC, LP, QLD

Senator Bob Brown, AG, TAS

Senator Gary Humphries, LP, ACT

Senator Steve Hutchins, ALP, NSW

Senator Russell Trood, LP, QLD

Secretariat

Ms Julie Dennett

Dr Patrick N. O'Neill

Mr Dylan Harrington

Ms Kate Middleton

Suite SI.61

Parliament House

CANBERRA ACT 2600

Committee Secretary

Senior Research Officer

Administrative Officer

Telephone: (02) 6277 3560

Fax: (02) 6277 5794

Email: legcon.sen@aph.gov.au

iii 195

196

TABLE OF CONTENTS

MEMBERS OF THE COMMITTEE ................................................................

ABBREVIATIONS............................................................................................

RECOMMENDATIONS..................................................................................

CHAPTER 1........................................................................................................

INTRODUCTION............................................................................................

Background.....................................................................................................

Conduct of inquiry .......... ...............................................................................

Acknowledgement..........................................................................................

Note on references..........................................................................................

CHAPTER 2 ........................................................................................................

OVERVIEW OF THE BILL AND EXISTING TERRITORY POWERS

Provisions of the Bill as proposed to be amended.........................................

Provisions to be repealed by the Bill.............................................................

Legislative and governmental structure in territories....................................

Background on existing provisions...............................................................

Commonwealth's plenary power under section 122 of the Constitution ......

CHAPTER 3

KEY ISSUES..............................................................................

Improved democratic rights for territory citizens ...................

Preference for parliamentary override of territory legislation.

Review of the self-government Acts ......................................

Objects clause..........................................................................

Euthanasia and same-sex marriage .........................................

Committee view.......................................................................

.ix

..1

..2

..3

..5

..8

vii

197

DISSENTING REPORT BY LIBERAL SENATORS 35

ADDITIONAL COMMENTS BY SENATOR MICHAEL FORSHAW AND SENATOR STEPHEN HUTCHINS .......................................................... 37

Introduction.............................................................................................................37

The Bill....................................................................................................................38

Other issues..............................................................................................................43

APPENDIX 1...............................................................................................................45

SUBMISSIONS RECEIVED...................................................................................45

ADDITIONAL INFORMATION RECEIVED .................................................... 50

APPENDIX 2 ...............................................................................................................51

WITNESSES WHO APPEARED BEFORE THE COMMITTEE ................... 51

198

ABBREVIATIONS

ACT Australian Capital Territory

ACT Act Australian Capital Territory (Self-Government) Act 1988 (Cth)

ACT Legislative Assembly Legislative Assembly for the Australian Capital Territory

NI Act Norfolk Island Act 1979

NTNorthern Territory

NT Act Northern Territory (Self-Government) Act 1978

(Cth)

NT Legislative Assembly Legislative Assembly of the Northern Terri to ly

199

%â

200

RECOMMENDATIONS

Recommendation 1

3.66 Notwithstanding the view expressed in paragraph 3.55 of this report, the committee recommends that the Senate pass the Bill (as proposed to be amended), as it pertains to the Australian Capital Territory (Self-Government) Act 1988 and the Northern Territory (Self-Government) Act 1978, subject to:

" removal of references in clause 4 to providing the relevant territory legislatures with *exclusive legislative authority and responsibility for making laws *; and

" amendment of clause 4 to more accurately reflect the current power of the Governor-General to recommend amendments to territory laws.

Recommendation 2

3.67 The committee recommends that the proposed amendments to the Norfolk Island Act 1979 with respect to removing the Governor-General's power to disallow Norfolk Island legislation should not proceed until further evidence is provided that clearly supports a need for change.

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202

CHAPTER 1

INTRODUCTION

Background

1.1 On 2 March 2011, the Senate referred the Australian Capital Territory (Selfâ Government) Amendment (Disallowance and Amendment Power of the Commonwealth) Bill 2010 (Bill) *together with proposed amendments applying to the Northern Territory (NT) and Norfolk Island *to the Legal and Constitutional Affairs Legislation Committee (committee) for inquiiy and report by 21 March 2011.1 On 21 March 2011, the Senate agreed to extend the reporting date until

28 March 2011 2 On 25 March 2011, the Senate again extended the reporting date until 4 May 2011.3

1.2 The Bill was introduced into the Senate by Senator Bob Brown on

29 September 2010. The stated objects of the Bill are to:

" remove the Governor-General's power under the Australian Capital Territoiy (Self-Government) Act 1988 to disallow or amend any Act of the Legislative Assembly for the Australian Capital Territory (ACT Legislative Assembly); and

" ensure that the ACT Legislative Assembly has exclusive legislative authority and responsibility for making laws for the Australian Capital Territory (ACT).4 5

1.3 Proposed amendments by Senator Brown were circulated on 1 March 2011. These amendments would make similar changes to the Northern Territoiy (Selfâ Government) Act 1978 and the Norfolk Island Act 1979.

1.4 Senator Brown introduced a similar bill into Parliament in 2006, entitled the Australian Capital Territory (Self-Government) Amendment (Disallowance Power of the Commonwealth) Bill 2006.3 That bill was a response to the Governor-General's disallowance of the Civil Unions Act 2006 (ACT): it would have retained the Governor-General's power to recommend amendments of ACT laws, but would have repealed his or her power to disallow ACT laws. The bill was debated in the Senate on

1 Journals of the Senate, 2 March 2011, p. 642.

2 Journals of the Senate, 21 March 2011, p. 699.

3 Journals of the Senate, 25 March 2011, p. 790.

4 Australian Capital Territory (Self Government) Amendment (Disallowance and Amendment Power of the Commonwealth) Bill 2010, clause 4.

5 Journals of the Senate , 19 June 2006, pp 2285-6.

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Page 2

14 September 2006,6 but ultimately lapsed. Another similar bill, the Australian Capital Territory (Self-Government) Amendment (Disallowance and Amendment Power of the Commonwealth) Bill 2009, was introduced by Senator Brown on 26 November 2009,7 but lapsed in 2010.

Conduct of inquiry

1.5 Details of the inquiry, the Bill and associated documents were placed on the committee's website. The committee also wrote to 47 organisations and individuals inviting submissions. Submissions were invited by 10 March 2011, but continued to be accepted until the reporting date for the inquiry.

1.6 The committee received 209 submissions, which are listed at Appendix 1. Submissions were placed on the committee's website.

1.7 The committee held public hearings in Canberra on 16 and 21 March 2011. A list of witnesses who appeared at the hearing is at Appendix 2, and copies of the Hansard transcript are available online at http://www.aph. gov.au/hansard.

Acknowledgement

1.8 The committee thanks those organisations and individuals who made submissions and gave evidence at the public hearings.

Note on references

1.9 References in this report are to individual submissions as received by the committee, not to a bound volume. References to the committee Hansard are to proof Hansard: page numbers may vary between the proof and the official Hansard transcript.

6 Senate Hansard, 14 September 2006, pp 90-121.

7 Journals of the Senate, 26 November 2009, p. 2891.

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CHAPTER 2

OVERVIEW OF THE BILL AND EXISTING

TERRITORY POWERS

2.1 Chapter 2 provides an outline of the provisions of the Bill and the proposed amendments, as well as background information on the existing self-government legislation in the Northern Territory (passed in 1978), Norfolk Island (passed in 1979) and the Australian Capital Territory (passed in 1988).

Provisions of the Bill as proposed to be amended

2.2 As originally introduced on 29 September 2010, the Bill would have affected only the ACT. However, proposed amendments circulated on 1 March 2011 (but not yet introduced into the Senate) would change the title of the Bill to the Territories Legislation (Self-Government) Amendment (Disallowance and Amendment Power of

the Commonwealth) Bill 2010, and would extend the operation of the Bill to the NT and Norfolk Island.

2.3 For the purposes of this report *given the wide public discussion of the Bill as affecting all three territories, and for convenience *the Bill is treated as if these amendments have already been incorporated.

Objects clause

2.4 The main part of the Bill contains an objects clause which states that the object of the Bill is to:

" remove the Governor-General's power to 'disallow or amend' any Act of the Legislative Assembly of each of the three territories; and

" ensure that the Legislative Assembly of each of the three territories has 'exclusive legislative authority and responsibility for making laws' for that territory.1

Repeals

2.5 Schedules 1, 2 and 3 of the Bill respectively would repeal one provision from the self-government Act for each of the three territories, namely:

" section 35 of the Australian Capital Territory (Self-Government) Act 1988 (ACT Act);

" section 9 of the Northern Territory (Self-Government) Act 1978 (NT Act); and

" section 23 of the Norfolk Island Act 1979 (*Ã¹*Ã¤ Act).

1 Australian Capital Territoiy (Self Government) Amendment (Disallowance and Amendment Power of the Commonwealth) Bill 2010, clause 4, as if amended by the circulated amendments.

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Page 4

Provisions to be repealed by the Bill

2.6 The three sections in each of the self-government Acts that would be repealed by the Bill provide as follows:

" the Governor-General may disallow a law or part of a law made by the

relevant Legislative Assembly within six months after it is made;

" the Governor-General may recommend to the Administrator of the NT or Norfolk Island, or to the ACT Legislative Assembly, any amendments of a law (or of another law affected by that law) within six months of the passing of the first law;

" if amendments are recommended, the time within which the law may be

disallowed is extended by six months from that date;

" once the disallowance is published on the Federal Register of Legislative Instruments,2 the law is considered to be repealed, and any law that was amended or repealed by the disallowed law comes back into force.

2.7 The constitutional convention surrounding the power of the Governor-General to disallow territory laws is the same as applies to other exercises of power by the Governor-General: the assumption is that 'all executive acts will be performed by the

Governor-General by and with the advice of the Federal Executive Council'. In other words:

The functional relations between the institutions that comprise the executive government depend on the proposition that the formal repositories of executive powers, generally the Governor-General and the Executive Council, will carry out those functions under the de facto control of the current ministers. Ministers 'advise' the Governor-General, either collectively through the Cabinet or (on more routine and less sensitive

matters) individually.3

2.8 The tabling and disallowance provisions of the Legislative Instruments Act 2003 (Cth) provide that any instrument of disallowance by the Governor-General can be overturned by either House of the Federal Parliament within 15 days after the disallowance is made.4

2 Although the three provisions to be removed by the Bill require a disallowance to be gazetted before it comes into force, section 56 of the Legislative Instruments Act 2003 (Cth) makes registration on the Federal Register of Legislative Instruments sufficient to fulfil the gazettal requirements.

3 Halsbuiy's Laws of Australia, Title 90 *Constitutional Law, IV The Executive Governments, (2) Federal Government, (C) Ministers, Cabinet and the Executive Council, [90-2445] Responsible government.

4 Legislative Instruments Act 2003 (Cth), sections 38 and 42. The Legislative Instruments Act commenced on 1 January 2005.

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Legislative and governmental structure in territories

2.9 Despite certain similarities, each of the three territories has a different legislative and governmental structure under its respective self-government Act. There are also a number of'reserve powers' that the Commonwealth retains in each territory.

Australian Capital Territory

2.10 In the ACT, bills passed by the ACT Legislative Assembly are not subject to any assent procedure (as in most jurisdictions), but become law once they are passed by the Legislative Assembly and notified in the ACT Legislation Register.5 This process applies because of the absence of an administrator (as is usual in territories), or a governor (as is usual in the states), and appears to be based on the ACT's status as the seat of government.6

2.11 The ACT Act imposes certain constraints on the powers of the

ACT Legislative Assembly. For example:

" the number of members of the Legislative Assembly is set at 17 and can be

changed if the Legislative Assembly passes a resolution to that effect, but any change must be done by way of associated Commonwealth regulations;7

" the Governor-General may dissolve the Legislative Assembly in certain circumstances;8 and

" the Legislative Assembly does not have the power to pass laws in relation to certain matters, including euthanasia and matters relating to the protection of Commonwealth interests in the ACT.9

2.12 There is also a difference between the ACT, on the one hand, and the NT and Norfolk Island on the other, in that the Governor-General has power under Part V of

5 ACT Act, section 25; and Legislation Act 2001 (ACT), section 28.

6 A 1975 report on self-government in the ACT observed that 'The ultimate source of authority in the A.C.T. must remain the Australian Parliament and the Assembly will exercise a delegated power subject at all times to the supremacy of Parliament...Ordinances of the Assembly will not, therefore, require the assent of the Governor-General to become law once Parliament has

delegated the power to make laws': Joint Committee on the Australian Capital Territory, Selfâ government and public finance in the Australian Capital Territory , March 1975, p. 42.

7 ACT Act, subsections 8(2) and (3).

8 ACT Act, section 16.

9 ACT Act, section 23. These matters include the provision by the Australian Federal Police of police services in relation to the ACT; the raising or maintaining of any naval, military or air force; the coining of money' and classification of materials for the puiposes of censorship: subsection 23(1).

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the Seat of Government (Administration) Act 1910 (Cth) to directly make ordinances for the ACT which are relevant to its status as the seat of government.10

Northern Territory

2.13 Unlike the ACT, an administrator exists in the NT; and the NT Administrator has significant powers with respect to legislation.

2.14 Under subsection 7(1) of the NT Act, every proposed law passed by the Legislative Assembly of the Northern Territory (NT Legislative Assembly) must be presented to the Administrator for assent. Upon presentation of a proposed law and, in the case of a law making provision only for or in relation to a matter in respect of which NT Ministers have executive authority under section 35 of the NT Act,11 the Administrator has the power to:

" assent to the proposed law;12 or

" withhold assent to the proposed law.13

2.15 With respect to proposed laws relating to matters which fall outside section 35 of the NT Act, the Administrator has the power to:

" assent to the proposed law;14

" withhold assent to the proposed law;15 or

" reserve the proposed law for the Governor-General's pleasure.16

2.16 Subsection 7(3) of the NT Act also allows the Administrator to return proposed laws to the NT Legislative Assembly with amendments that he or she recommends.

2.17 In relation to proposed laws which have been reserved by the NT

Administrator for the Governor-General's pleasure, the Governor-General has the power to assent to the law, to withhold assent to the law, or to withhold assent to part

10 The Governor-General can make ordinances for the ACT in relation to matters such as the ACT Supreme Court, censorship, national land, and companies. Current ordinances include the National Land Ordinance 1989 (ACT), the National Memorials Ordinance 1928 (ACT), and the Reserved Laws (Administration) Ordinance 1989 (ACT). However, very few ordinances have been made for the ACT by the Governor-General since self-government began in 1989.

11 Matters in respect of which NT Ministers have executive authority under section 35 of the NT Act are specified in regulation 4 of the Northern Territory (Self-Government) Regulations 1978. Such matters include, for example: taxation (including stamp duty); police; legal aid; civil liberties; tourism; industrial safety; environment protection and conservation; water resources; public works; public health; education; and censorship.

12 NT Act, subparagraph 7(2)(a)(i).

13 NT Act, subparagraph 7(2)(a)(ii).

14 NT Act, subparagraph 7(2)(b)(i).

15 NT Act, subparagraph 7(2)(b)(ii).

16 NT Act, subparagraph 7(2)(b)(iii).

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of the law while assenting to its remainder.17 The Governor-General may also return the proposed law to the Administrator with recommended amendments.18

2.18 Under section 10 of the NT Act, where assent is withheld by the

Administrator or the Governor-General, or where a law is disallowed by the Governor-General, the Administrator must advise the NT Legislative Assembly of that action within six sitting days after the date on which the assent was withheld or the date of the disallowance.

2.19 Similarly to the ACT, the NT is specifically prevented from making laws in relation to certain forms of euthanasia.19

Norfolk Island

2.20 The situation on Norfolk Island *the smallest jurisdiction in terms of population and area, but with a self-government Act twice as long as those of the ACT and the NT *appears to be more complex than in either of the other two territories.

2.21 The complex governance of Norfolk Island, through the Ml Act, was summarised in 2010 in a Parliamentary Library Bills Digest as follows (prior to further significant amendments being made to the NI Act by the Territories Law Reform Act 2010 (Cth)):

The legislative power of the Assembly is plenary (with four defined exceptions), but the conditions attaching to assent as well as other forms of overriding legislative authority mean that the Commonwealth retains a significant influence over the laws enacted to apply in Norfolk Island. Laws about matters listed in Schedule 2 are at the heart of Norfolk Island selfâ government, because the Administrator assents or not to such laws on the advice of the Executive Council (the NI Government). Schedule 3 to the NI Act lists a smaller range of topics which in 1979 the Commonwealth Minister described as 'matters of particular sensitivity or national

importance'. Regarding assent to Schedule 3 laws, the Administrator appears again to act on the advice of the Executive Council, but importantly is subject to over-riding instructions from the Commonwealth Minister. Where a law relates to a matter in neither Schedule 2 nor 3, the

Administrator reserves the law for the attention of the Governor-General (who will act on the advice of the Commonwealth Government). The Governor-General also has the power to make ordinances for the Island and to introduce legislation into the Assembly, although apparently this power has not been exercised since 1979. Finally the Commonwealth Parliament has the power to make laws which apply in Norfolk Island, but only if a Commonwealth Act expressly says so.20

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17 NT Act, subsection 8(1).

18 NT Act, subsection 8(2).

19 NT Act, section 50A.

20 MA Neilsen, Territories Law Refonu BUI 2010, Bills Digest, no. 20, 2010-11, Parliamentary Library, Canberra, 19 October 2010, p. 5, http://www.aph.gov.au/library/pubs/bd/201 *Ã¼â *Ã´ 1/1 lbd020.pdf (footnotes omitted).

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Background on existing provisions

2.22 The following section of this chapter examines the background relating to the existing provisions which are proposed to be removed by the Bill.

Australian Capital Territory (Self-Government) Act 1988

2.23 When the Australian Capital Territory (Self-Government) Bill was introduced in 1988, the then Minister stated:

The Assembly will have the power to make laws for the peace, order and good government of the Territory. Most Ordinance law in place in the Territory will become Assembly law on commencing day. The Governor- General will, as occurs in the Northern Territory, have the power to disallow any Assembly law within six months of the law being made. Commonwealth law will prevail over Assembly law.

Protections such as these are essential in the national capital. They are, of course, instruments of last resort and it is the Government's intention to resolve any potential conflict with the A.C.T. by consultation and negotiation.21

2.24 The Australian Democrats proposed an (unsuccessful) amendment to remove what is now section 35 of the ACT Act, in order to 'protect the rights of communities which vote to have matters determined by the people they vote for'.22

2.25 However, the Minister justified the disallowance power:

The right of disallowance that is maintained here is the same right *no more and no less *as that retained in the Northern Territory. Yet here in the Australian Capital Territory there is obviously a greater imperative to keep it because...it is here that we have the ultimate constitutional responsibility. It is worth noting that this power has never been used in the Northern Territory and here, where we have an even stronger right, I would imagine that we would almost always be able to deal with these matters by consultation and negotiation. I think it is a reasonable power to retain given our constitutional responsibility.23

2.26 As first introduced, section 35 gave the Federal Parliament no explicit role in reviewing a disallowance by the Governor-General. However, Independent Senator Brian Harradine moved amendments so that any disallowance by the executive would be subject to further review, and potential disallowance, by either House of the Parliament:

These amendments would enable either House of Parliament in effect to reverse the decision of the Executive Government, which then would

21 Senator the Hon. Graham Richardson, Minister for the Arts, Sport, the Environment, Tourism and Territories, Senate Hansard, 7 November 1988, p. 2126.

22 Senator Jean Jenkins, Senate Hansard, 23 November 1988, pp 2600-01; 24 November 1988, p. 2807.

23 Senator the Hon. Graham Richardson, Minister for the Arts, Sport, the Environment, Tourism and Territories, Senate Hansard, 24 November 1988, p. 2807.

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enable the enactment of the Australian Capital Territory legislature to remain intact. At present, as honourable senators know, the Federal Parliament has the power to disallow ordinances made by the Executive Government in respect of the ACT. Under the provisions of the Bill the Parliament is taken out of the legislation altogether, it has no role in respect of the laws governing the Australian Capital Territory other than those listed in schedule 4 of the Bill. It is interesting that the Parliament would still retain some power of veto in respect of the matters that are contained in schedule 4. I understand that the amendment has the support of all

honourable senators...24 25

2.27 This amendment was accepted by the government and the opposition as 'a safeguard for a safeguard', and it was also considered prudent to 'be more cautious than disappointed'.

Northern Territory (Self-Government) Act 1978

2.28 During the parliamentary debate in 1978, the opposition moved (ultimately unsuccessful) amendments to enable parliamentary oversight of any disallowance by the Governor-General:

As it stands, clause 9 would allow the Governor-General to disallow any law of the Northern Territory Legislative Assembly within six months without any appeal to this Parliament. Any law could be negatived. It could be completely blocked by the Governor-General without recourse to any other opinion. We have already suggested that the Administrator should refer anything he disagrees with to the Northern Territory Legislative Assembly. We believe equally that if the Governor-General intends to override a law of the elected Legislative Assembly of the Northern Territory he should have to get the concurrence of this Parliament or at least have his decision laid before the Parliament so that there is another opportunity for the Legislative Assembly to have its law approved through debate in the Houses of Parliament. It should not be left to an executive

decision.26

2.29 The failure of the opposition's amendment meant that (until commencement of the Legislative Instruments Act in 2005), any disallowance of an NT law by the Governor-General would not have been able to be overturned by the Federal Parliament.

2.30 The power contained in section 9 of the NT Act appears never to have been used, but there were two major controversies about NT laws in the mid to late 1990s: first in relation to euthanasia (1995-97); and second about mandatory sentencing (1996-2001).

24 Senator Brian Harradine, Senate Hansard, 24 November 1988, p. 2810.

25 Senator Robert Hill, also supported by Senator Bob McMulian, Senate Hansard, 24 November 1988, p. 2810.

26 Dr Douglas Everingham MP, House of Representatives Hansard, 2 June 1978, p. 3049.

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NT euthanasia law

2.31 The NT Legislative Assembly passed a euthanasia law *the Rights of the Teminally III Act 1995 (NT) *on 24 May 1995, and it received assent on 16 June 1995. In late 1995, the President of the NT branch of the Australian Medical Association, Dr Chris Wake, appealed to the Prime Minister to disallow the law. In Februaiy 1996, a letter outlining the Keating Government's attitude to this issue was released by the NT Voluntary Euthanasia Society. The letter, from a 'senior prime ministerial adviser', stated that health and social welfare issues fell outside the four specific areas retained for the Commonwealth under the NT Act, and that the Federal Government believed the law was 'a valid law of the NT'. Further, 'it [was] up to the people of the NT to express their views on that legislation, rather than the

Commonwealth'.27

2.32 The time-limit for Commonwealth disallowance of the euthanasia law expired on 16 December 1995, and the law therefore commenced on 1 July 1996 without federal intervention.28

2.33 However, following a change of government after the 1996 election, the Federal Parliament passed the Euthanasia Laws Bill 1996 (introduced as a private member's bill by Mr Kevin Andrews MP), amending the self-government Acts of the NT, ACT and Norfolk Island to prevent their legislatures from passing euthanasia

laws.29

2.34 On 10 October 1996, the NT Legislative Assembly unanimously voted for a Remonstrance30 to be presented to the Federal Parliament, opposing the passage of the Andrews Bill.31

27 Letter from Ms Clare Naim, Senior Adviser, Office of the Prime Minister, to Ms Lynda Cracknell, President, Voluntary Euthanasia Society, as reported in 'Federal Govt out of death bill row', Northern Territory News, 15 February 1996. At this time *given the failure of the ALP amendments in 1979 *the Federal Parliament had no role in reviewing any disallowance of Northern Territory laws.

28 The Rights of the Terminally III Act 1995 was amended in March 1996 by the Rights of the Terminally III Amendment Act 1996 (NT), before the 1995 Act commenced.

29 Euthanasia Laws Act 1997. This Act arose from a private member's bill that was introduced into the House of Representatives by Mr Kevin Andrews MP on 9 September 1996, and agreed to with amendments on 9 December 1996. The bill was passed by the Senate on 25 March 1997.

30 Remonstrance is a term traditionally used to signify a formal statement of grievances by a parliament to a sovereign or, in this case, by a legislative assembly to a 'superior' parliament.

31 NT Legislative Assembly, Parliamentary Record, No. 26, 10 October 1996. The ACT Legislative Assembly also passed a motion against the Andrews Bill, and the Norfolk Island Government 'resisted the notion' that the Federal Parliament might, on an ad-hoc basis, pass legislation which inhibited or suppressed the right of the territory governments (ACT Legislative Assembly, Debates, 25 September 1996, pp. 3406-17; Mr Mike King, Head of the Norfolk Island Government, in a letter cited in NT Legislative Assembly, Parliamentary Record, No. 26, 10 October 1996).

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NT mandatory-sentencing law

2.35 In 1996, the NT Legislative Assembly passed mandatory sentencing laws which required detention of at least 28 days for juveniles aged 15 to 17 who had previously been convicted of a property offence.32

2.36 On 25 August 1999, Senator Bob Brown introduced the Human Rights (Mandatory Sentencing of Juvenile Offenders) Bill 1999 into the Senate. The bill explicitly referred to the external affairs power in subsection 51(xxix) of the Australian Constitution as the source of Commonwealth power to legislate in this area.33 The bill provided:

A law of the Commonwealth, or of a State or of a Territory must not require a court to sentence a person to imprisonment or detention for an offence committed as a child.34

2.37 The bill was co-sponsored by Senator the Hon. Nick Bolkus and

Senator Brian Greig; and the bill, along with the broader issue of mandatory sentencing, were referred to the Senate Legal and Constitutional References Committee. That committee reported in March 2000 and concluded as follows:

The Committee would prefer that the respective governments take action to 'put their own houses in order' in accord with national objectives and obligations, but it is not convinced that this will occur.

The Committee does not believe that the Northern Tenitory and Western Australian Governments will act on their own volition to resolve the issue.

The Committee therefore recommends that the Bill be passed by the Parliament.35

2.38 The Senate passed the bill on 15 March 2000,36 but the bill was not passed by the House of Representatives. Senator Bob Brown introduced a similar bill on 6 September 2000.37 On 8 February 2001, the Senate passed a motion by Senator

32 Juvenile Justice Act (NT), sections 53AE-AG, as inserted by the Juvenile Justice Amendment Act (No. 2) 1996 (NT), which received assent on 31 December 1996; other amendments at the same time inserted new sections 78A, 78B and Schedule 1 into the Sentencing Act 1995 (NT).

33 This was on the basis that the Commonwealth is a signatory to the Convention on the Rights of the Child. The long title of the bill reads: *Ã Bill for an Act to implement Australia's human rights obligations to children under Articles 37(b) and 40(4) of the Convention on the Rights of the Child'.

34 Clause 5.

35 Senate Legal and Constitutional References Committee, Inquiry into the Human Rights (Mandatory Sentencing of Juvenile Offenders) Bill 1999, March 2000, pp 116-17.

36 The result of a division on the Second Reading was 34 *30 in favour.

37 Human Rights (Mandatory Sentencing for Property Offences) Bill 2000. This bill, restored to the Notice Paper after the 2001 election, ultimately lapsed in 2004.

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Brown calling on the Federal Government to override the NT's mandatory sentencing laws.38

2.39 The issue of mandatory sentencing abated after October 2001, when a newly elected NT Government passed legislation repealing mandatory sentencing of juveniles and adult property offenders.39

Norfolk Island Act 1979

2.40 When the Norfolk Island Bill 1979 was being debated, the then opposition * just as it had in the case of the NT *opposed the disallowance clause (ultimately unsuccessfully):

Enshrined in [that clause] is the proposition that there is a necessity for real self-government for the people of Norfolk Island to be limited by this very extraordinary power of the Governor-General to disallow laws made by the Norfolk Island Legislative Assembly and approved by the Administrator. In a symbolic sense the Opposition finds that to be a most reprehensible provision. It is symbolic, in that it suggests a view of the type of

government which should be applicable to Norfolk Island, totally different to that which the Opposition puts forward. Accordingly, in Amendment No. 1 which stands in the name of the Opposition, we urge the Senate to delete this clause.40

2.41 Section 23 of the Norfolk Island Act 1979 is in identical terms to section 9 of the NT Act and, like that provision, it appears never to have been used. However, unlike the self-government Acts for the ACT and the NT, the NI Act has been subject to significant parliamentary review in recent years. This would appear to be a reflection of the serious financial and other challenges facing the Norfolk Island Government, and of the chequered progress of self-government in Norfolk Island.41

2.42 The Territories Law Reform Act 2010 (Cth) (which received assent in December 2010), while not affecting section 23, provided the Commonwealth with additional powers under the NI Act, including a power for the Federal Minister to introduce legislation into the Norfolk Island Legislative Assembly, and for the Federal

38 Senate Hansard, 8 February 2001, p. 21654.

39 Juvenile Justice Amendment Act (No. 2) 2001 (NT) and Sentencing Amendment Act (No. 3) 2001 (NT).

40 Senator John Button, Senate Hansard, 23 May 1979, p. 2027.

41 See, further, the 2005 report of the Joint Standing Committee on the National Capital and External Territories Inquiry into Governance on Norfolk Island, Norfolk Island Financial Sustainability, The Challenge *Sink or Swim, and the same inquiry's 2003 report, Ouis custodiet ipsos custodes? The current financial crisis facing the Norfolk Island Government has been reported in articles such as: Mark Dodd, 'Labor revolt on Norfolk', The Australian, 3 November 2010, p. 7; Ean Higgins, 'Mutineer descendants opt for bounty', The Australian, 5 November 2010, p. 3; and Malcolm Brown, 'Down but not quite out in paradise *, Sydney Morning Herald, 12 February 2011, p. 13.

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Minister to give advice to the Administrator not to grant assent to a bill passed by the Legislative Assembly in relation to Schedule 2 matters.42

2.43 Assent to bills passed by the Norfolk Island Legislative Assembly has been withheld a number of times since 2003, including twice by the Governor-General and four times by the Administrator.43

2.44 Further, the Joint Standing Committee on the National Capital and External Territories made the following conclusion in its report on the Territories Law Reform Bill 2010:

The committee is concerned about evidence received where over the past year there have been cases of bills dealing with schedule 3 and non

schedule issues having been passed by the Legislative Assembly without consultation with the Commonwealth Government. In addition, there have been other cases where Commonwealth advice may have been received on proposed legislation, but not on future proposed amendments to legislation.

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The committee believes that Commonwealth Government oversight of Norfolk Island legislation is necessary in ensuring that Norfolk Island legislation is consistent with Government policy, the national interest and

complying with Australia's international obligations.44 45

2.45 The joint committee also observed that the items included in Schedule 2 of the NI Act have significantly grown since 1979, adding to the burden of responsibilities of the Norfolk Island Government.4" The joint committee recommended that a review of the items contained in Schedules 2 and 3 of the NI Act should be undertaken by the

42 Norfolk Island Act 1979, section 26A, and subsection 21(5) as amended in 2010.

43 The Governor-General has withheld assent in recent years for the Legislative Assembly Amendment Bill 2003 and Valuation of Land Bill 2009, while the Administrator has withheld assent for the Customs (Amendment) Bill 2005, Customs (Amendment No. 2) Bill 2005, Immigration (Amendment) Bill 2006 and Social Services (Amendment No. 2) Bill 2006 {Norfolk Island Government Gazette, 17 September 2004, p. 229; 28 May 2010, pp 99-100; 30 September 2005, p. 209; 6 January 2006, p. 1; 24 August 2007, pp 161-2). For a list showing ongoing Commonwealth involvement in assent processes for Norfolk Island legislation, see Answers to Questions on Notice provided by Department of Regional Australia, Regional Development and Local Government on 29 March 2011.

44 Joint Standing Committee on the National Capital and External Territories, An advisory report on the Territories Law Reform Bill 2010, May 2010, p. 29.

45 Schedule 2 of the NI Act lists matters over which the Norfolk Island Government has both legislative and executive authority. (Schedule 3 lists matters in respect of which the Norfolk Island Government has executive authority, but legislative authority is subject to Commonwealth veto.)

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Federal Government;46 and the Federal Government has accepted this recommendation.47

Commonwealth *s plenary power under section 122 of the Constitution

2.46 By virtue of section 122 of the Constitution, the Federal Parliament retains the ability to override territory laws and restrict the powers of the legislative assemblies in the self-governing territories.

2.47 Section 122 of the Constitution provides:

The Parliament may make laws for the government of any territory

surrendered by any State to and accepted by the Commonwealth, or of any territory placed by the Queen under the authority of and accepted by the Commonwealth, or otherwise acquired by the Commonwealth, and may

allow the representation of such territory in either House of the Parliament to the extent and on the terms which it thinks fit.

2.48 The power in section 122 is a plenary power which is unlimited by subject matter, and it is the basis for continuing Commonwealth responsibility for the territories. The overarching Commonwealth power in section 122 cannot be changed except by way of a constitutional referendum, and is not affected by the Bill.

46 Joint Standing Committee on the National Capital and External Territories, An advisory report on the Territories Law Refomi Bill 2010, May 2010, pp 30-31.

47 The Hon. Simon Crean MP, Minister for Regional Australia, Regional Development and Local Government, House of Representatives Hansard, 16 November 2010, p. 2563.

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CHAPTER3

KEY ISSUES

3.1 Chapter 3 discusses the key issues raised in submissions and evidence during the committee's inquiry. Many of the substantive submissions received by the committee expressed strong support for the Bill and its objectives.

Improved democratic rights for territory citizens

3.2 Most submitters and witnesses who favoured the Bill emphasised the democratic right of tenitory citizens to be governed by their elected representatives, without a federal executive override.

General support fo r the Bill and its objectives

3.3 The Law Council of Australia (Law Council) noted its fundamental opposition 'to unwarranted and inappropriate interference with the legislative powers of Australia's self-governing Territories'.1 In the Law Council's view, the Commonwealth's power to override laws in the territories significantly undermines

their democratic legitimacy:

Territorians elect representatives to their local assemblies in the expectation that those representatives will make laws for the peace, order and good governance of their communities within the parameters of the law making powers afforded them by the self-government Acts. It is an affront to the

democratic process in which Territorians participate if legislation lawfully passed by their elected representatives is rendered invalid by the operation of Commonwealth laws, which are not of general application, but which are exclusively targeted at the Territories for the express purpose of interfering

in their legislative processes.

While the current Bill does not completely remove the power of the Commonwealth to override Territory laws, it enhances the democratic quality of this process by requiring that Parliament consider and take responsibility for the decision to override, rather than the Executive.2

3.4 Professor Cheryl Saunders AO from Melbourne Law School supported the Bill 'as an overdue change to correct what has become an anachronism in the Australian system of government'.3 Professor Saunders argued that the Bill should apply 'at least' to the ACT and the NT:

1 Submission 36, p. 3.

2 Submission 36, p. 5.

3 Submission 46, p. 1.

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These Territories are self-governing polities with democratic institutions responsible to their electors. Their systems of government are broadly equivalent to those of the States and the Commonwealth. Elsewhere in Australia, we entrust such institutions with the power to make decisions that reflect the views of their respective electorates, subject to the overall constitutional framework. So it should be in relation to the Territories. In this regard it should be noted that for most other purposes, including intergovernmental arrangements, the Territories are treated under Commonwealth legislation and in practice as being akin to the States.4

3.5 Associate Professor Tom Faunce from the Australian National University also advocated passage of the Bill:

[Repealing section 35 of the ACT Self-Government Act is a measure that can and should be taken now. What the citizens of the ACT or NT vote

about should be no concern of members of federal Parliament if it raises no issues that would create constitutional objections should the same legislation have been passed by the States. The geographical accident of being resident in a Territory should not be a ground for discrimination in terms of basic rights under the Australian Constitution.5

3.6 Professor George Williams submitted that, '[a]s a matter of good governance, the Commonwealth should not remove power from a self-governing jurisdiction to make laws on a topic'. Specifically, he argued:

Removing power is a blunt instrument that prevents the making of any laws, for good or ill, including those that are clearly in the best interests of the local community. It also sends a clear signal that the Commonwealth believes that the Territories are not up the task of enacting appropriate laws

on the subject. This is at odds with the fact that the ACT and the Northern Territory both have a larger population, and a better functioning system of self government, than some of the colonies that became [states upon Federation in 1901].6

Australian Capital Territory

3.7 The Chief Minister of the ACT, Mr Jon Stanhope MLA, argued that the Bill goes to 'a first and basic principle'7 for citizens of the ACT:

[W]e, the residents of the Australian Capital Territory, deserve the same consideration, the same respect and the same capacity to exercise our democratic rights without threat or prospect of interference as all other Australians *other than those in the Northern Territory and Norfolk Island *currently exercise their democratic rights...I and my government,

4 Submission 46, p. 1.

5 Submission 11, p. 3.

6 Submission 1, p. 2.

7 Committee Hansard, 16 March 2011, p. 18.

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and I believe the vast majority of the residents of the Australian Capital Territory, reduce this issue to first and basic principles... [T]he people of the Australian Capital Territory, a self-governing territory within the Commonwealth of Australia, are currently not accorded the same democratic rights, the same respect, the same capacity to govern ourselves, consistent with mandates that we achieve through the ballot box, as other Australians. It is as simple as that...We really should be concentrating on a

simple, basic principle *I would have thought a principle close to the hearts of every Australian *something that this nation stands for above all others: a commitment to democracy, a determination to fight for democracy and to support it, and to always live by it. We, the people of the ACT, are not

being accorded the same rights to the same extent and to the same level as other Australians. We believe that is inappropriate.8

3.8 The Castan Centre for Human Rights Law at Monash University also expressed support for the Bill:

It will enhance democratic rights in the ACT. At present, legislation emanating from territorial parliaments may be struck down by an exercise of executive power by the Governor General (acting on the advice of the responsible Ministers). In other words, the will of the people of the ACT, as represented by its Parliament, can presently be struck down on the basis that it does not conform to the will of the federal government of the day.9

3.9 The ACT Greens strongly endorsed the Bill's proposals, arguing that section 35 of the ACT Act *is fundamentally offensive to representative democracy', which is 'premised on the basis that citizens have the opportunity to elect those who make decisions about the way their community is to function and the laws that govern it'. In addition:

Currently the citizens of the ACT have no ability whatsoever to respond to a decision of a Commonwealth Minister, elected by electorates very distinct from their own, when that Minister using section 35 decides to overrule an enactment of the democratic parliament they do elect. Canberrans cannot vote against a Minister from Queensland or WA who exercises the power given to them by Section 35 that applies exclusively to the ACT. This is perhaps the only case where there is no electoral accountability for action taken by a Member of Parliament in Australia.10

3.10 Mr Michael Moore, a former independent member of the ACT Legislative Assembly, urged the committee to support the Bill as an important part of the development of the powers of the territory legislatures:

The Territories have powers that are less than those of the States and, as such, should be reviewed from time to time to determine why it is that the

8 Committee Hansard, 16 March 2011, pp 18-19.

9 Submission 45, p. 1.

10 Submission 47, p. 1.

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Federal Parliament allows reduced democratic rights for approximately 800,000 Australian citizens.

Many have been critical of decisions that have been made by the ACT Legislative Assembly since self-government in 1989. However, this is the nature of democracy. There has also been criticism of many decisions taken by Federal governments in the same period, not to mention neighbouring New South Wales. We should have similar rights as other jurisdictions when it comes to decisions by our locally elected representatives.11

Northern Territory

3.11 The Chief Minister for the NT, the Hon Paul Henderson MLA, fervently endorsed the Bill's proposals as they pertain to the NT:

It is a very basic principle that we are arguing for here. The 25 members of the Territory parliament, who make laws for the good governance of the people of the Northern Territory, are elected by Territorians and they are accountable through fixed-term elections every four years. For the

Commonwealth executive arm of government to have the power, essentially at the stroke of a pen, to make a recommendation to the Governor-General to disallow a law in the Territory undermines democracy in the Northern Territory. It says to Territorians who go to the polls every four years: 'You can't be trusted. Your big brothers and sisters in the Commonwealth parliament do not trust you to elect a parliament to make laws for the good governance of the people of the Northern Territory.' I think that that is insulting to people in the Northern Territory who elect their members of parliament.12

3.12 Further, Mr Henderson argued that section 9 of the NT Act 'provides for a total lack of transparency and accountability to the people of the NT' because the federal executive is able to effectively amend or disallow a law that has been passed by the 'democratically elected' NT Legislative Assembly:

The federal minister that would take a position to cabinet to amend or disallow a law that has been made through the Territory parliament is not accountable to the people of the Northern Territory. The cabinet that would

make that recommendation to the Governor-General is not accountable to the Northern Territory. The ability for the federal executive to understand the innate intricacies and issues affecting the people of the Northern Territory is nowhere near to the same level of accountability and scrutiny as there is through the Territory parliament. So I would argue that the current

provision is certainly lacking in transparency and accountability to the people of the Northern Territory.13

11 Submission 3, p. 2.

12 Committee Hansard, 16 March 2011, p. 2.

13 Committee Hansard, 16 March 2011, p. 2.

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3.13 The Hon Jane Aagaard MLA, Speaker of the Legislative Assembly of the Northern Territory and Chair of the NT Legislative Assembly Standing Committee on Legal and Constitutional Affairs, strongly supported the Bill as a 'reform which improves the democratic capacity of a self governing Australian territory to participate

as a more equal partner within the broader Australian federal system'. In particular, she argued:

It remains contrary to the principles of democratic government that the laws made by the responsible Parliament in the Northern Territory should be overturned without reference to that Parliament.

Section 99 of the Australian Constitution prevents the Commonwealth discriminating in favour of (or against) one State over another, resulting in valid Commonwealth laws which apply equally to all.

Section 9 of the Self Government Act deviates from the underlying principle of s.99 and allows the Commonwealth to single out a territory for unequal treatment for no reason other than the Commonwealth has the constitutional power to treat a territory in an inferior manner. If the Commonwealth Government simply does not like a State law, its power to override that law

is much more constrained.14

3.14 Speaking with, and on behalf of, members of the NT Standing Committee on Legal and Constitutional Affairs at the first public heating, Mrs Aagaard emphasised the maturity of the NT Legislative Assembly:

The Northern Territory has demonstrated in its 11 assemblies and almost 34 years of self-government that it is a mature body politic in the Australian system of government with a healthy representative democracy working on behalf of the electors of the Northern Territory. Section 9 of the selfâ government act provides that the Governor-General, on the advice of the Federal Executive Council, may disallow or recommend amendments to a

law passed by the Legislative Assembly of the Northern Territory within six months after it is made. This power of the Commonwealth may be exercised by the federal executive in respect of any legislation passed by the Northern Territory Legislative Assembly, not just legislation relating to matters for which the Legislative Assembly is expressly precluded from making laws. The repeal of section 9 would not give the Northern Territory

any greater legislative authority than it presently enjoys. It would, however remove the federal executive power to disallow valid laws passed by the Legislative Assembly. The federal parliament's power to override Territory laws would remain intact as it exists today.15

3.15 Mr Marshall Perron, a former NT Chief Minister, observed that selfâ government has been a substantial success in the Northern Territory. Mr Perron asserted that the history of the Rights of the Terminally III Act 1995 (NT) demonstrates

14 Submission 4, pp 1-2.

15 Committee Hansard, 16 March 2011, P- 10.

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conclusively that an executive power to veto territory legislation is unwarranted and unnecessary:

A decision to veto a law passed by the duly elected representatives of Australians living in the territories is a grave matter. It should not be done on the whim of a Minister or Prime Minister but duly considered by both houses of Federal Parliament...There is no ongoing need for a 'big brother' clause that allows a Federal Government minister to veto a law passed by the Legislative Assembly. If a proposed law is considered so dangerous or offensive to warrant trampling the decision of a subordinate democratically elected legislature, it should only be done by Federal Parliament in full

session.16

Step towards statehood for the Northern Territory

3.16 The NT Chief Minister submitted that the move towards statehood in the NT is a primary motive for his endorsement of the Bill:

This is all about the parliament of the Northern Territory and the people of the Northern Territory being accorded a small step along the way to

statehood with the same rights and responsibilities through their elected parliament as all other people in Australia. I see the [Bill]...as very

important in terms of the journey towards statehood for the Northern Territory. Any journey is made up of a number of steps, and this legislation is a small but significant step towards statehood and certainly towards respecting the rights of Terri tori ans through their elected parliament in the Northern Territory.17

3.17 Mr Henderson noted that the Bill represents *a step in recognising the inequities between the way the Commonwealth executive has powers over the territories that it does not have over the states'. Further:

[T]he removal of that power by the support of this bill I would see sends a very significant signal by the parliament of Australia that the territories are moving towards statehood in terms of recognition of that... [T]he journey towards statehood will be taken through a number of steps and this would be a step of recognition by the Commonwealth power in regards to the progression of statehood for the Northern Territory. Where the ACT and Norfolk Island sit in that debate towards statehood is an issue for their jurisdictions.18

3.18 In a similar vein, Mrs Aagaard expressed the view that the Bill should be strongly supported as a move towards statehood for the NT:

The proposed amendment to remove section 9 of the Northern Territoiy (Self-Government) Act 1978 means this bill, if passed, will be a significant

Page 20__________________________________________________________________________________________________________________

16 Submission 22, p. 2.

17 Committee Hansard, 16 March 2011, p. 2.

18 Committee Hansard, 16 March 2011, p. 7.

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step towards the recognition of the ability of the Northern Territory to undertake self-government with less prospect of arbitrary interference. If the bill is passed it would assist the Territory to promote more

understanding of the long-held aspirations to achieve statehood.19

Preference for parliamentary override of territory legislation

3.19 Many submissions and witnesses expressed a clear preference for a parliamentary override of territory legislation, as opposed to an executive one.

3.20 The ACT Chief Minister, Mr Jon Stanhope MLA, characterised the executive disallowance power as 'outdated, unaccountable and subject to partisan influence', and an 'unreasonable constraint' on democratic rights:

That section 35 empowers the Commonwealth Government, with no popular mandate, to administratively override the laws of the Territory's legitimate legislature is a fundamental erosion of Australia's democratic

standards. The disallowance power creates a high degree of uncertainty as to the status of existing and future enactments of the Legislative Assembly for the ACT and the scope of the Assembly's law making powers. In

effect *and in a manner unique to the Territories * the provision affords citizens of the ACT no clear line of ultimate accountability for the laws passed by their elected representatives. This provides for a lower standard of democracy for the citizens of the ACT when compared to Australians

living in one of the six States.

Such laws as have been duly formulated, debated and passed in the ACT's parliament by elected representatives should not be subject to the arbitrary, unilateral veto of federal Ministers elected outside the ACT.20

3.21 Similarly, Mr Shane Rattenbury MLA, Speaker of the ACT Legislative Assembly, contended that section 35 of the ACT Act should be considered to be as obsolete as sections 59 and 60 of the Constitution, which enable the Queen to disallow

Commonwealth legislation or to have Commonwealth laws reserved for her assent. He submitted further that section 122 of the Constitution properly provides for the parliament rather than the executive to oversee the ACT, and that the executive's disallowance power creates uncertainty and doubt for ACT legislators.21

3.22 Although the NT Chief Minister, Mr Henderson, preferred that there be no Commonwealth override *either by the Federal Government or the Federal Parliament *he saw benefits in a legislative process as opposed to an executive one:

The current process through section 9 of the Northern Territory (Selfâ Government) Act is not transparent, whereas if a piece of legislation is brought through to the parliament here it would be transparent, to the effect

19 Committee Hansard, 16 March 2011, p. 10.

20 Submission 20, p. 4.

21 Submission 29, pp 4-8.

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that people are on the record as to whether they supported it, did not

support it and the arguments for and against. At least a piece of legislation has a degree of transparency, as opposed to the total lack of transparency that is provided for under section 9...22

3.23 Mrs Aagaard also explained why a legislative override is preferable to an executive one:

If the Commonwealth parliament decides that it wants to override our laws then there is a process for the people in the Northern Territory to be part of that process in terms of the transparency *we all have federal members of parliament; there is that process * as opposed to a single minister, with the

executive, overriding laws, which I think in 2011 is really quite

unconscionable.23

3.24 In a similar vein, Ms Gai Brodtmann MP, Federal Member for Canberra, and Mr Andrew Leigh MP, Federal Member for Fraser, contended:

Without a constitutional change, the Australian Parliament will still have the right to overturn territory laws. But this power should only be exercised in the most extreme cases. Overturning territory law should require a decision of the federal parliament, and not remain the prerogative of the executive.

Moving the veto power from the executive to the Australian Parliament will ensure that an open debate takes place, in which every Australian

Parliamentarian *including the ACT's MPs and Senators *has the opportunity to speak out.24

3.25 Professor Cheryl Saunders AO argued that executive disallowance is an outmoded procedure that should give way to the openness of legislation:

Because the Territories do not formally have statehood, they are subject to overriding legislation, on any subject, enacted by the Commonwealth Parliament. But this at least is an open process, requiring the executive to explain the reasons for the action that it wishes to take in the forum of the Parliament, which is designed to subject them to public scrutiny and debate. By contrast, disallowance of Territory legislation by the Commonwealth executive, acting through the Governor-General, is an outmoded procedure that is insulting to Territory voters and for which there is insufficient accountability at the Commonwealth level, given the significance of the action.

The disallowance procedure in the Self-Government Acts is modelled on colonial practice. In colonial times, the imperial authorities retained power over colonial legislatures through a power of the Monarch to disallow colonial enactments on the advice of the British executive. There are

22 Committee Hansard, 16 March 2011, p. 8.

23 Committee Hansard, 16 March 2011, p. 12.

24 Submission 56, p. 1.

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remnants of this still in section 59 of the Constitution, which has long since fallen into disuse. There is no justification for continuing to use a practice of this kind in 21st century Australia.25

3.26 The Law Council agreed that the Bill represents a marked improvement on the current process:

[A parliamentary] approach, which requires the full consideration of both Houses of Commonwealth Parliament and removes from the Executive the power to interfere in the internal affairs of another properly-elected government on an ad hoc basis, to better align with the grant of self

government and demonstrates a greater respect for the democratic processes of the elected parliaments of the Australian territories.26

3.27 Professor George Williams pointed out that the effect of repealing section 35 of the ACT Act is merely to alter the process by which the Commonwealth might override ACT laws, but that a parliamentary process is to be preferred:

Instead of enabling this to occur under section 35 by way of an executive decision, subject to disallowance by either house of the Federal Parliament, such an override would need to occur by way of legislation passed through both the House of Representatives and the Senate. This latter course is a more appropriate method of achieving this outcome, and is consistent with both good democratic practice and the importance of ensuring that Australian citizens in both States and Territories have, so far as possible, the same democratic rights to self-government.27

3.28 In response to questioning by the committee about whether the current parliamentary disallowance power is an adequate check on any disallowance of a territory law by the federal executive, Professor Williams provided the following view:

I would certainly recognise that it is an important check and it does need to be considered as part of this. But it is a far weaker check, I believe, than having a requirement that a bill be passed through both houses of federal parliament. One reason is that the initiation of it by the executive as

opposed to the initiation of a bill in parliament is a very different hurdle. I think also that there are very different processes involved in disallowing a regulation or legislative instrument as opposed to making legislation fresh in the first place, including inquiry processes and the like. I think also it just comes down to good constitutional principle. When you are dealing with

overriding a law of a subordinate parliament then it is the high-level parliament that should play the role in doing that. It is not appropriate to

25 Submission 46, p. 1.

26 Submission 36, p. 4.

27 Submission 1, p. 1.

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have that depending upon, initially at least, an executive decision. It just gets the separation of functions wrong.28

3.29 Professor Williams continued:

We are talking about two processes that are different but both involve a level of parliamentary involvement. This is a change of process, not an opening of the door to a range of matters that are just beyond the scope of

this bill. I would say, though, that there is a fundamental difference when it comes to the principle involved and the way it is done and, in particular, the lead role being taken for a veto by the executive as opposed to the lead role being taken by parliament. When it comes to the development, whether by the British parliament or other parliaments around the world, this type of veto would be seen as inappropriate, given the way it operates, even though.. .there is an important level of parliamentary control nonetheless.29

Review of the self-government Acts

3.30 The committee received evidence in relation to whether a comprehensive review of the relevant self-government Acts should be undertaken prior to any legislative changes such as those proposed by the Bill. Most of this evidence related to a review of the ACT Act and issues associated with the ACT's right to full autonomy.

3.31 In this regard, the Canberra Liberals called for a wide-ranging review of the situation in the ACT, and expressed concerns that passing the Bill in isolation might inhibit the opportunity for broader reform in the future:

Given the history of self-government in the ACT, the view of the Canberra Liberals is that it is only rarely that the opportunity presents itself to review the ACT's enabling legislation, in effect its constitution. Any such opportunity, therefore, should not be squandered on a single-issue of an individual political party.

This is impossible to achieve under the cloud of the narrow focus of the Bill in question and without the appropriate consultation of the people of the ACT and the people's representatives in the Legislative Assembly.

This is especially so when the Bill is proposed without due process of consultation, either with all of the Parties represented in the ACT

Legislative Assembly or, more broadly, the people of Canberra.

Any reforms of the ACT's 'constitution' should be developed and proposed as a package that has the backing of the ACT community through all of its

28 Committee Hansard, 16 March 2011, p. 33.

29 Committee Hansard, 16 March 2011, p. 34. Professor Williams also noted that the ACT 'would still be subject to a far more stringent level of federal oversight than is the case for any state jurisdiction in Australia' because of the combination of section 122 and the fact that the ACT Act restricts the ACT Legislative Assembly from legislating in a number of areas in order

to protect Commonwealth interests: Committee Hansard, 16 March 2011, p. 31.

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political representatives in the ACT Legislative Assembly, and the community at large.30

3.32 At the first public hearing, Mr Zed Seselja MLA, Leader of the Opposition in the ACT Legislative Assembly, reiterated the need for community consultation and deliberation, so that any changes occur after 'genuine consultation with the community' rather than 'one amendment at a time'.31

3.33 The Law Council also recommended an examination of the constitutional status of the ACT.32

3.34 Professor George Williams favoured the idea of a holistic approach to constitutional reform, but in the absence of any likely review process, advocated passage of the Bill as an appropriate option:

Yes, it should be done holistically. I would simply say at the moment that there is no such holistic process on the books. Successive governments have neglected their responsibilities in these areas, as looking after matters of self-government for the ACT. If such a process were to begin, I think it would be appropriate to put this bill aside to let that process conclude. In the absence of that *and the absence of any likelihood of that, it would seem *this is the next best option; that is, to deal with the provisions, even on an individual basis, that clearly should not be on the statute book. It is better to do it that way than to achieve nothing...I would accept [a primary recommendation by the committee for a review of the ACT Act] as long as it was qualified by the fact that, should such a review not be agreed to as part of the government's response to your report, the legislation should be proceeded with. That would give an opportunity to consider that. But I would not like this change to be put off for a possibility that may never eventuate.33

3.35 The ACT Chief Minister informed the committee that he had frequently called for review of the ACT Act, without success. However, he argued that passage of the Bill should not be contingent upon any such review:

We have been asking for 10 years for a full review of the self-government act. This is the first opportunity that I am aware of since self-government, not just in the last 10 years *I know it is the first opportunity in the last 10

years and I believe it is the first opportunity since self-government *where some change, a small change, might be made. So why would we wait? We also have the capacity to do more than one thing at a time. This parliament could dispose of this particular proposal, supported by the ACT

government, supported I am sure by the vast majority of Canberrans. This is

30 Submission 39, pp 3-4.

31 Committee Hansard, 16 March 2011, p. 38.

32 Submission 36, p. 7.

33 Committee Hansard, 16 March 2011, p. 32.

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an issue of simple principle, and it can pass after a short debate in this place. So why would we not accept the first opportunity that has presented to amend and to improve the self-government act? Then we could proceed with a full inquiry into the continuing appropriateness of the selfâ

government act.34

3.36 In this regard, the Department of Regional Australia, Regional Development and Local Government (Department) advised the committee that the Federal Government, while not supportive of a joint review of the ACT Act, 'does not object to the ACT Government undertaking a review of the Act' which is 'driven by the ACT and its residents'. The Department advised further that the Minister met with the ACT Chief Minister in November 2010, and 'agreed that the ACT Government would undertake a review of the Act and that the Australian Government would give serious consideration to the results of the review'.35

Objects clause

3.37 Some submitters and witnesses observed that the Bill's objects clause (clause 4) is inaccurate as it relates to the Bill's constitutional effect.

3.38 Professor George Williams pointed out that clause 4 makes further claims than are constitutionally possible, and argued that it should be amended:

The repeal of section 35 will not remove the power of the Commonwealth to override any ACT law. Such a power is entrenched by section 122 of the Federal Constitution. This means that the object of the Bill in section 4(b) to 'ensure that the Legislative Assembly for the Australian Capital Territory has exclusive legislative authority and responsibility for making laws for the Australian Capital Territory' cannot be achieved by the Bill. This object should be deleted/6

3.39 Further:

The original objects include a reference to exclusive legislative authority for the ACT and that is constitutionally not possible. Senator Brown's proposed amendment removes that with new objects but they also have one further problem in that they refer to the ability of the Governor-General not just to disallow but to amend territory legislation. That is not strictly

correct. The Governor-General can disallow or request or recommend the amendment and that is a minor technical change which I think would also need to be made even to the revised objects for the purposes of accuracy.37

34 Committee Hansard, 16 March 2011, p. 23.

35 Department of Regional Australia, Regional Development and Local Government, answers to questions on notice, p. 1, received 29 March 2011.

36 Submission 1, p. 1.

37 Committee Hansard, 16 March 2011, p. 35.

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3.40 Professor Geoffrey Lindell from the University of Adelaide also commented on the inaccuracy of the objects clause:

The most that can be said about the objective of the Bill is that it seeks to enhance the powers of self-government by freeing legislation passed by the ACT (and other Territory) legislation from disallowance by the Federal Government. Or,...it seeks to ensure that citizens in the ACT (and the other Territories mentioned in the Bill) should, "wherever possible, enjoy the same rights as other citizens in Australia to be free from Ministerial (or Executive) interference in the enactment of legislation passed by their elected representatives."38

3.41 Similarly, Mr Michael Moore remarked on the constitutional overreach in clause 4:

The legislation will not provide exclusive legislative power to the ACT. The fundamental difference between the States and a Territory is the source of power. As a Territory source of power originates from the Federal Parliament^] without changes to the Constitution the power to make legislation will always remain subject to the decisions of the Federal Parliament.39

Euthanasia and same-sex marriage

3.42 Certain legal experts provided comment on whether the Bill would enable the territories to more easily legislate in the areas of euthanasia and same-sex marriage, and were clear that the Bill would have no direct or relevant effect in that regard.40

3.43 As Professor George Williams explained:

[I]t needs to be stated for the record that this bill will not allow any laws to be made about euthanasia by the ACT Legislative Assembly, and of course this bill does not in any way deal with section 23 of the self-government act that precludes that. Secondly, this bill will not affect the current power of the territory assembly to make laws on the topic of same-sex marriage

should they so wish. That is a current power that the assembly has. It is not prevented by section 51 of the Constitution, which provides for concurrent powers with the states and territories. That is a power that could be

exercised, of course subject to disallowance or inconsistency or the like, by the territories or the states if they wished to do so. This bill would not alter that.41

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38 Submission 65, Supplementary Submission, p. 1.

39 Submission 3, p. 2.

40 Professor George Williams, Committee Hansard, 16 March 2011, p. 31; Law Council of Australia, Submission 36, p. 6 (in relation to euthanasia); Castan Centre for Human Rights Law, Submission 45, p. 1; Professor John Williams, Submission 52, pp 2-4.

41 Committee Hansard, 16 March 2011, p. 31.

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3.44 Professor John Williams from the University of Adelaide also argued that the Bill would not impact on the ability of the territories to legislate in relation to euthanasia and same-sex marriage:

The capacity of the self-governing territories to pass legislation on euthanasia is limited by previous amendments to their self-government acts.

Senator Brown's [Bill] does not deal directly, or by implication, with the Commonwealth Maniage Act 1961. The legislative capacity of the Territory and State parliaments to legislate on marriage remains the same and is subject to the operation of the current Commonwealth legislation on the topic.

Whatever the fate of the...Bill it remains the case that the Commonwealth Parliament will retain control over Territorian legislative initiatives that may be seen to impact adversely upon the Australian community. Arguably this is where such authority should solely be placed and...the repeal [of] section 35 of the Australian Capital Territory (Self-Government) Act 1988 and its equivalents is in keeping with the developments in parliamentary accountability.42

3.45 In relation to the issue of same-sex marriage in the ACT, the Castan Centre of Human Rights Law submitted:

[T]he Bill would facilitate the passage of such legislation in the ACT if the ACT legislature wished to pass it, as such legislation would be shielded from federal ministerial override (though it would not be shielded from federal legislative override). We submit however that this concern is irrelevant. The fact is that passage of the Bill will shield all ACT legislation from executive overrides. If the ACT was to 'abuse' that power and 'go mad' (to paraphrase A.V. Dicey), the federal legislature could override resulting legislation unless one of its houses also 'went mad'.43

Committee view

Overriding support fo r the Bill

3.46 The committee notes that many submitters and witnesses expressed their ardent support for the Bill (as proposed to be amended) and its broad objectives. The committee shares the view that the Bill represents a positive enhancement of the democratic rights of citizens in the self-governing territories.

42 Submission 52, pp 2-4.

43 Submission 45, p. 1.

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Australian Capital Territory and Northern Territory

3.47 The vast majority of evidence received during the course of the inquiry related to the circumstances of the ACT and the NT. The committee agrees with the sentiment of many submitters and witnesses that the legislative assemblies in those territories have demonstrated a high level of maturity and competence over many years.

3.48 The Bill's proposed removal of the anachronistic features in sections 35 and 9, respectively, of the ACT and NT self-government Acts would be a significant step forward in their constitutional history, demonstrating that the Commonwealth

genuinely respects the delegation of lawmaking powers that it made when it granted self-government. At the same time, as long as the ACT and the NT continue to be territories *and the committee notes that there is little possibility that the ACT is able to become a state because it includes the seat of government44 45 *the Commonwealth would continue to have overarching power over them pursuant to section 122 of the Constitution.

3.49 As a matter of basic principle, therefore, the committee considers that the power of the federal executive to override legislation in the ACT and the NT is inappropriate and unwarranted. The committee therefore strongly supports the Bill's

objectives in removing that power in the ACT and the NT, and replacing it with a parliamentary process that is more in keeping with sound democratic practice.

Norfolk Island

3.50 In the case of Norfolk Island, however, the committee is reluctant to support any changes to the NI Act without further evidence demonstrating such a need. Only two substantive submissions specifically considered the situation on Norfolk Island,

and each provided an opposing viewpoint.4' Neither the Norfolk Island Chief Minister nor the Speaker of the Norfolk Island Legislative Assembly made submissions to the inquiry, despite being specifically invited by the committee to do so.

3.51 The committee is also of the view that Norfolk Island may be distinguished from the ACT and the NT in a number of ways. For example, Norfolk Island's population *of approximately 2100 people *is on a very different scale to that of the ACT and NT. The committee is also mindful of Norfolk Island's recent history of

legislation, with six bills having been refused assent since 2003 by either the

44 Professor George Williams advised the committee that 'it seems reasonably likely from High Court dicta that the ACT cannot become a state. It does not lie within the power of its population to petition the Commonwealth to achieve that status unless a federal referendum were held to allow that': Committee Hansard, 16 March 2011, p. 33.

45 Mr Peter Maywald, a former Secretary to the Norfolk Island Government (Submission 31) supported the Bill in relation to Norfolk Island; while former senator Dr Karin Sowada, on behalf of Anglican Deaconess Ministries Limited (Submission 38), opposed the Bill.

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Governor-General or the Administrator,46 coupled with apparent significant and ongoing Commonwealth involvement in legislative and assent processes.47

3.52 The committee also notes that the Federal Government's approach in the recent Territories Law Reform Act 2010 was weighted towards greater Commonwealth control over affairs in Norfolk Island, and the committee considers that it would be counterintuitive for the Federal Parliament now to take a different course.

3.53 Finally, the current financial crisis facing the Norfolk Island Government indicates to the committee that the timing is inopportune for further amendment of the island's 'constitution' so soon after it has undergone the large-scale amendments made by the Territories Law Reform Act 2010. The committee therefore concludes, on the basis of the evidence before it in relation to Norfolk Island, that any changes to the Norfolk Island Act 1979 should not be supported at this time.

Comprehensive constitutional review

3.54 As a general principle, and despite its expression of strong support for the Bill's objectives in relation to the ACT and the NT, the committee does not consider that piecemeal amendments represent good legislative practice. There may be certain flow-on effects arising from such amendments which have not been given due consideration, or which are not yet known; and these may result in legislative and practical inconsistencies that are not desirable. A more thorough approach would have

ensured that no unintended consequences arise from implementation of the Bill, and that any necessary consequential amendments could be made.

3.55 Further, an approach which fails to look at the broad range of issues affecting the autonomy of the ACT and the NT may not be the most appropriate way of

addressing outstanding self-determination matters in those territories, and may not ultimately represent the most considered solution. The committee believes that a systematic and holistic review of self-government arrangements in the ACT and the NT holds merit, and would help to address some of the specific issues raised during

this inquiry.

Australian Capital Territory

3.56 The prospects for wide-ranging review of the ACT Act, in particular, were discussed at length during the committee's inquiry. The ACT Chief Minister expressed his desire for a review of self-government arrangements in the ACT to examine

46 By way of contrast, and as noted in Chapter 2, the Administrator of the NT has similar powers to withhold assent from bills or recommend amendments (under section 7 of the NT Act), or to reserve bills for the Governor-General's pleasure (section 8) but it does not appear that these powers have ever been used.

47 See Department of Regional Australia, Regional Development and Local Government, answers to questions on notice, received 29 March 2011.

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broader issues than those encapsulated by the Bill. For example, he called for an amendment to section 8 of the ACT Act to permit the ACT Legislative Assembly to determine the number of its members.48 The Canberra Liberals also strongly supported a process of consultation and review.

3.57 In this context, the committee notes that there have already been two joint Commonwealth-ACT reviews of the ACT Act *in 1993 and in 1997-1998. The 1993 review led to the introduction of the Arts, Environment and Territories Legislation Amendment Bill 1993 by the then Labor Government. That bill proposed,

among other things, to provide the ACT Legislative Assembly with the power to decide the number of its MLAs. However, the committee understands that provision was omitted during consideration by the Senate.

3.58 A second Commonwealth-ACT review *the Pettit Review *was conducted from November 1997 until April 1998.49 It led to a four-year process in the ACT Legislative Assembly, which included the setting up of a select committee. In 1999, that select committee recommended a detailed review of the ACT Act.50 In December 2001, the ACT Legislative Assembly Standing Committee on Legal Affairs began a further inquiry into the number of ACT MLAs, and reported in June 2002.51

3.59 During the current inquiry, a departmental officer informed the committee that the Federal Government has advised the ACT Government that a review of the ACT Act could be undertaken by the ACT Government of its own volition. The Department provided information to the committee which suggests that the Department and, indeed, the Minister would welcome any advice relating to the results of a review undertaken by the ACT Government. The committee understands that such results would be given due consideration.52 Noting the strong desire for a comprehensive review in the ACT and the agreement between the ACT Chief

48 Committee Hansard, 16 March 2011, p. 23. However, the committee notes in this regard that, while the Commonwealth may change the number of members of the ACT Legislative Assembly, this can only occur if a motion to that effect has been passed by the Legislative Assembly itself: ACT Act, subsection 8(3). It does not appear that this provision has ever been

triggered. A notice of motion was given by the ACT Chief Minister, Mr Stanhope, on 25 September 2002 for the number of members to be increased to 25, but the motion was not moved, and lapsed at the calling of the following ACT election.

49 P. Pettit, T. Ready and B. Blick, Review of the Governance of the Australian Capital Tenitory [Pettit Review], Chief Minister *s Department, Canberra, April 1998.

50 Legislative Assembly for the Australian Capital Tenitory, Report of the Select Committee on the Report of the Review of the Governance, June 1999, p. 7.

51 For a summary of the various review processes that have taken place in the ACT, see Mark McRae, ed., Companion to the Standing Orders of the Legislative Assembly for the Australian Capital Territory, ACT Legislative Assembly, Canberra, 2009, pp 47-48.

52 Committee Hansard, 21 March 2011, p. 4; see also Department ofRegional Australia, Regional Development and Local Government, answers to questions on notice, received 29 March 2011.

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Minister and the Minister in November 2010, the committee strongly encourages the ACT Government to commence such a review.

Northern Territory

3.60 In the Northern Territory, the move towards statehood and, in particular, the proposed Constitutional Convention to be held later this year, make the process of review somewhat different than for the ACT. As was noted during this inquiry, the population of the NT is now greater than that of some of the original states in 1901

and, given that the NT also constitutes some 10 per cent of the land mass of

continental Australia, the committee considers that a move towards statehood makes good sense. Of course, statehood would ultimately remove the NT from the purview of section 122 of the Constitution.

3.61 The committee places on record its strong support for statehood in the NT, and encourages the NT Government and the NT Legislative Assembly to pursue initiatives for progression towards statehood as soon as practicable. The committee would also welcome any opportunity to work cooperatively with the NT Legislative Assembly Standing Committee on Legal and Constitutional Affairs towards achieving that goal.

Amendments to the Bill

3.62 Notwithstanding its support for the Bill's objectives in relation to the ACT and the NT, the committee considers that some amendments are necessary to address certain concerns it has with respect to the Bill as currently drafted.

Objects clause

3.63 Specifically, the committee notes evidence suggesting that clause 4 of the Bill, as well as the proposed amendments to clause 4, contain a significant misstatement of the law in providing that one of the objects of the Bill is to ensure that the legislative assemblies of the territories have 'exclusive legislative authority and responsibility for making laws' for their respective territory.

3.64 Although the objects clause does not have any impact on the actual

amendments to be effected by the Bill, the committee is of the view that it should be as accurate as possible. By virtue of section 122 of the Constitution, the 53

53 Professor George Williams, Committee Hansard, 16 March 2011, pp 32-33. In September 2010, the population of the NT was estimated to be 230,200; in 1901, Western Australia and Tasmania had populations of 184,124 and 172,475 respectively (Australian Bureau of Statistics, 3101.0 Australian Demographic Statistics, September 2010, http://www.abs.gov.aU/ausstats/abs@.nsf/mf/3101.0; 00 1901 Australian Snapshot. Table 1.

1901 Population Counts for States, 2001, http://www.abs.gov.au/websitedbs/D3110124.NSF/24e5997b9bf2ef35ca2567fb00299c59/c4ab dlfac53e3df5ca256bd8001883ec!OpenDocument#Tab]e%20I.%201901%2QPopulation%20Co unts%20f.

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Commonwealth has overriding responsibility for the territories, and the Bill will not change this situation. The committee believes that amendments are necessary to remove any statement about legislative authority from clause 4, and to ensure that the objects clause simply refers- *accurately *to the effect of the amendments it is making. The committee notes in this context that Senator Brown has signalled his intention to amend the objects clause.54

3.65 Clause 4 as currently drafted (and as proposed to be amended) also suggests that the Governor-General can amend any enactment of the territory legislatures, in addition to his or her power to disallow an enactment. In fact, the current provisions give the Governor-General a power to recommend amendments, either to the Legislative Assembly for the ACT or to the administrator for the NT (and Norfolk Island). Again, the committee recommends that this inaccuracy be addressed prior to the Bill proceeding.

Recommendation 1

" removal of references in clause 4 to providing the relevant territory legislatures with *exclusive legislative authority and responsibility for making laws'; and

" amendment of clause 4 to more accurately reflect the current power of the Governor-General to recommend amendments to territory laws.

Recommendation 2

3.67 The committee recommends that the proposed amendments to the Norfolk Island Act 1979 with respect to removing the Governor-General *s power to disallow Norfolk Island legislation should not proceed until further evidence is provided that clearly supports a need for change.

Senator Trish Crossin

Chair

54 Committee Hansard, 16 March 2011, p. 17.

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DISSENTING REPORT BY LIBERAL SENATORS

1.1 Liberal Senators express their strong concerns about both the Bill and the further proposed amendments circulated by Senator Bob Brown. Liberal Senators note that Senator Brown has shown, by his legislative track record, an equal capacity to both champion and override territory rights. We note, for example, that he has been happy to defend the right of the Northern Territory to legislate for euthanasia but

equally willing to quash its right to legislate for minimum mandatory sentences. It is hard to resist the conclusion that Senator Brown and the Australian Greens see legislation of this kind primarily as a vehicle to promote pet policies such as

euthanasia and same-sex marriage, rather than a genuine effort to enhance the democratic rights of Australia's self-governing territories.

1.2 In particular, Liberal Senators note previous bills introduced in 2006 and 2009 by Senator Brown which related to the Governor-General's power to disallow laws in the Australian Capital Territory. Those bills did not have general application to all the self-governing territories; and, in the view of Liberal Senators, they were deliberately

designed to advance the Greens' agenda in the ACT rather than coherently improve the legislative powers of the territory parliaments.

1.3 Liberal Senators also note that the current Bill, as originally drafted, would have had application only to the ACT. The omission of the other self-governing territories from the original Bill serves to evidence the point even further: the circumstances of the Northern Territory and Norfolk Island appear to have been considered merely as an after-thought. Liberal Senators believe that it is highly inappropriate to make changes to existing legislation for purely political purposes.

1.4 In particular, Liberal Senators are of the view that piecemeal amendments do not in any way represent good legislative practice. As the majority report points out, there may well be serious flow-on effects arising from a patchwork approach to legislative change. In the case of the Bill and the proposed circulated amendments, Liberal Senators note that the objects clause is inaccurate as drafted and demonstrably requires amendment. There were several problematic aspects of the various selfâ government enactments to which attention was drawn during this inquiry, issues which this Bill does nothing to address.

1.5 The process by which the Australian territories move towards greater legislative independence, consistent with the overall framework of the Australian Federation, should continue, but Liberal Senators consider that a more systematic and comprehensive approach is to be preferred. To this effect, Liberal Senators consider that the committee should follow its own recommendation and urge the Senate to commend a systematic and holistic review of self-government arrangements in the ACT and the NT. This would ensure that all relevant constitutional and selfâ determination issues in the territories are given proper and thorough consideration before any legislative proposals are brought forward.

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Senator Guy Barnett Deputy Chair

Senator the Hon George Brandis SC

Senator Russell Trood

Senator Stephen Parry

Senator Gary Humphries

238

ADDITIONAL COMMENTS BY

SENATOR MICHAEL FORSHAW AND

SENATOR STEPHEN HUTCHINS

Introduction

1.1 This Bill should not be passed in its current form. It is flawed. It will not achieve its stated objects. If enacted, this Bill will produce disparities between the legislation governing each of the territories and with the Commonwealth and the States.

1.2 The Bill is short comprising only four clauses. The original Bill proposed by Senator Brown only related to the Australian Capital Territory. Amendments have since been proposed that would extend the Bill's operation to the Northern Territory and Norfolk Island.

1.3 It has been argued by those supporting the Bill that it is a simple amendment to the self government legislation applying to the territories that will remove the current power of the Governor General to disallow or amend any Act passed by the territory legislatures.

1.4 According to the Hon Paul Henderson, Chief Minister of the Northern Territory, '(t)his Bill is about restoring in part democracy to the Northern Territory through the elected Parliament' and 'for the Commonwealth executive arm of Government to have the power, essentially at the stroke of a pen, to make a recommendation to the Governor-General to disallow a law in the Territory undermines democracy in the Northern Territory'.1

1.5 Similarly, Mr Stanhope, Chief Minister Australian Capital Territory stated that the Bill will 'remove an unnecessary constraint on the democratic rights of the people of the ACT' as they are '...not being accorded the same rights to the same extent and to the same level as other Australians'.2

1.6 However this is not a simple issue. This Bill will not simplify the current constitutional arrangements applicable to the territories. Nor will it achieve the claimed purposes referred to in the Chief Ministers' statements. Rather, it will produce anomalies between the territories as the consequences on each are not consistent.

1 Committee Hansard, 16 March 2011, p. 2.

2 Committee Hansard, 16 March 2011, pp 17 & 19.

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The Bill

1.7 The Bill seeks to change the current constitutional arrangements that exist between the Commonwealth and the Territories which were the subject of detailed debate and consideration when self government was originally extended to the territories. Any such changes should therefore also be subject to proper consideration of all of the consequences.

1.8 In particular such changes should consider the relevance of, and the impact on, other sections of the legislation governing each territory. That has been a major failure in the drafting and promotion of this Bill and its subsequent consideration by the Committee.

Northern Territory

1.9 The Bill proposes to repeal Section 9 of the Northern Territory (Self Government) Act 1978 (NT Act). Section 9 states:

9 Disallowance of enactments

(1) Subject to this section, the Governor-General may, within 6 months after the Administrator's assent to a proposed law, disallow the law or part of the law.

(2) The Governor-General may, within 6 months after the Administrator's assent to a proposed law, recommend to the Administrator any amendments of the laws of the Territory that the Governor-General considers to be desirable as a result of his or her consideration of the law.

(3) Where, as a result of his or her consideration of a law, the Governor- General so recommends any amendments of the laws of the Territory, the time within which the Governor-General may disallow the law, or a part of the law, is extended until the expiration of 6 months after the date of the Governor-General's recommendation.

(4) Upon publication of notice of the disallowance of a law, or part of a law, in the Government Gazette of the Territory, the disallowance has, subject to subsection (5), the same effect as a repeal of the law or part of the law.

(5) If a provision of a disallowed law, or a provision of a disallowed part of a law, amended or repealed a law in force immediately before the

commencement of that provision, the disallowance revives the previous law from the date of publication of the notice of disallowance as if the

disallowed provision had not been made.

1.10 What is significant however is that laws passed by the Northern Territory Assembly are subject to the assent of the Administrator of the NT or the

Governor-General pursuant to the provisions of Section 6 (Legislative power) and Section 7 (Assent to proposed laws) and Section 8 (Signification of pleasure on proposed law reserved):

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6 Legislative power

Subject to this Act, the Legislative Assembly has power, with the assent of the Administrator or the Governor-General, as provided by this Act, to make laws for the peace, order and good government of the Territory.

7 Assent to proposed laws

(1) Every proposed law passed by the Legislative Assembly shall be presented to the Administrator for assent.

(2) Upon the presentation of a proposed law to the Administrator for assent, the Administrator shall, subject to this section, declare:

(a) in the case of a proposed law making provision only for or in

relation to a matter specified under section 35:

(i) that he or she assents to the proposed law; or

(ii) that he or she withholds assent to the proposed law; or

(b) in any other case:

(i) that he or she assents to the proposed law;

(ii) that he or she withholds assent to the proposed law; or

(iii) that he or she reserves the proposed law for the Governor- General's pleasure.

(3) The Administrator may return the proposed law to the Legislative Assembly with amendments that he or she recommends.

(4) The Legislative Assembly shall consider the amendments recommended by the Administrator and the proposed law, with those or any other

amendments or without amendments, may be again presented to the Administrator for assent, and subsection (2) applies accordingly.

8 Signification of pleasure on proposed law reserved

(1) Where the Administrator reserves a proposed law for the Governor- General's pleasure, the Governor-General shall, subject to this section, declare:

(a) that he or she assents to the proposed law;

(b) that he or she withholds assent to the proposed law; or

(2) The Governor-General may return the proposed law to the

Administrator with amendments that he or she recommends.

(3) The Legislative Assembly shall consider the amendments recommended by the Governor-General and the proposed law, with those or any other amendments or without amendments, may be again presented to the

Administrator for assent, and subsection 7(2) applies accordingly.

(4) Where the Governor-General makes a declaration in respect of a proposed law in accordance with subsection (1), the Administrator shall, as

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soon as practicable after the declaration is made, cause to be published in the Government Gazette of the Territory a notice of the declaration.

(5) The assent of the Governor-General to a proposed law or part of a

proposed law is of no effect until notification of the Governor-General's declaration in respect of the proposed law is published in the Government Gazette of the Territory.

1.11 These sections are not repealed by this Bill.

1.12 Hence the current powers of the Administrator and the Governor-General to withhold assent to, or to recommend changes to, a proposed law of the Northern Territory will remain even if this Bill is passed.

1.13 It follows that the argument in support of the Bill, and as defined in the proposed Objects of the Bill, namely that it will remove the Governor-General's power to disallow or amend any enactment of the Legislative Assembly of the Northern Territory is clearly wrong. That power will remain as provided in Sections 6, 7 and 8.

1.14 Senator Forshaw raised this anomaly with the departmental witnesses during the Inquiry:

Senator FORSHAW * ...Can you tell me what is the effect of deleting section 9 of the Northern Territory legislation on the other provisions in the Northern Territory legislation which refer to the power of the Administrator not to assent to a bill?

Mr Yates *Senator, you will appreciate I cannot actually give you legal advice on that side of it. My understanding is that removing the

disallowance of power, which is proposed through the territories rights bill, does not have any effect on those provisions.

Senator FORSHAW * So the provisions would still continue to exist whereby the chief administrator of the Northern Territory could decide not to assent to a bill that is presented to him having been passed by the

Northern Territory legislature?

Mr Yates *That is my understanding, Senator.

Senator FORSHAW *That is not dissimilar to what a state governor could do with respect to a state parliamentary law or, in theory, what a Governor-General could do to a federal parliamentary law. That power includes referral back if, for instance, the administrator or the state governor or the Governor-General in each of those situations wanted to put points of view forward to the respective governments, they have that authority in each case.

Mr Yates *That is my understanding.3

3 Committee Hansard, 21 March 2011, p. 6.

242

Australian Capital Territory

1.15 The Bill proposes to repeal Section 35 of the Australian Capital Territory (Self Government) Act 1978 (ACT Act). Section 35 states:

35 Disallowance of enactments

(1) In this section:

enactment includes a part of an enactment.

(2) Subject to this section, the Governor-General may, by legislative instrument, disallow an enactment within 6 months after it is made.

(4) The Governor-General may, within 6 months after an enactment is made, recommend to the Assembly any amendments of the enactment, or of any other enactment, that the Governor-General considers to be desirable as

a result of considering the enactment.

(5) Where the Governor-General so recommends any amendments, the time within which the Governor-General may disallow the enactment is extended for 6 months after the date of the recommendation.

(6) Upon publication in the Commonwealth Gazette of notice of the disallowance of an enactment, the disallowance has, subject to

subsection (7), the same effect as a repeal of the enactment.

(7) If a provision of a disallowed enactment amended or repealed an enactment that was in force immediately before the commencement of that provision, the disallowance revives the previous enactment from the date of publication of the notice of disallowance as if the disallowed provision had not been made.

(8) For the puiposes of this section, an enactment shall be taken to be made when it is notified in the Territory Gazette under this Part,

1.16 Unlike the Northern Territory (and also the Commonwealth and the States) bills passed by the ACT are not subject to a process of executive or royal assent. Rather they become law following notification in the ACT Legislation Register.

1.17 If passed this Bill will remove the power of disallowance by the

Governor-General for laws made by the ACT Legislative Assembly.

1.18 This will produce the illogical, and unintended, situation where the Governor-General will continue to have the power to disallow proposed laws of the Northern Territory but no longer of the Australian Capital Territory.

Norfolk Island

1.19 The Bill proposes to repeal Section 23 of the Norfolk Island Act 1979 (NI Act). That section is virtually identical to Clause 9 in the NT Act.

1.20 The Norfolk Island Act also provides for an Administrator in similar terms, and with similar disallowance powers, to the NT Act. In particular Section 21 (Presentation of proposed laws) and Section 22 (Signification of pleasure on proposed

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law reserved) provide for the Administrator to withhold assent to a proposed law or refer it to the Governor-General.

1.21 These, and other relevant sections (eg Section 27 - Legislative powers of the Governor-General), are not repealed or amended by this Bill. The outcome therefore will be identical to that in the Northern Territory as detailed above.

1.22 We note that the majority report does not support, without further evidence, the proposed amendment in the Bill with respect to Norfolk Island.

Commonwealth and States

1.23 If the Bill is passed the situation becomes even more anomalous because bills passed by the Commonwealth Parliament require royal assent and, in accordance with the Australian Constitution, are subject to disallowance by the Governor General or the Queen.

1.24 Sections 58, 59 and 60 of the Australian Constitution state:

58 Royal assent to Bills

When a proposed law passed by both Houses of the Parliament is presented to the Governor-General for the Queen's assent, he shall declare, according to his discretion, but subject to this Constitution, that he assents in the Queen *s name, or that he withholds assent, or that he reserves the law for the Queen's pleasure.

Recommendations by the Governor-General

The Governor-General may return to the house in which it originated any proposed law so presented to him, and may transmit therewith any

amendments which he may recommend, and the Houses may deal with the recommendation.

59 Disallowance by the Queen

The Queen may disallow any law within one year from the Governor- General's assent, and such disallowance on being made known by the Governor-General by speech or message to each of the Houses of the Parliament, or by Proclamation, shall annul the law from the day when the disallowance is so made known.

60 Signification of Queen's pleasure on Bills reserved

A proposed law reserved for the Queen's pleasure shall not have any force unless and until within two years from the day on which it was presented to the Governor-General for the Queen's assent the Governor-General makes known, by speech or message to each of the Houses of the Parliament, or by Proclamation, that it has received the Queen's assent.

1.25 Whilst it is now accepted that the Queen, or her representative the Governor- General, would not refuse assent, or would not act to disallow a law, the provisions nevertheless continue to exist. They can only be removed by a successful referendum to amend the Constitution. They cannot be ignored when considering this Bill.

1.26 The situation in each of the States is similar where the State Governor exercises the executive powers.

1.27 If this Bill is passed then the ACT Legislative Assembly will not, unlike the Commonwealth, States and the other two territories, be subject to any legislated or constitutionally prescribed executive authority.

1.28 It is not surprising that this Bill is technically flawed. Both this bill, and a previous bill proposed by Senator Brown in 2006, originally applied only to the ACT. They are clearly a reaction to the Howard Government *s decision to use Section 35 of the ACT Act to disallow the ACT Civil Union's Bill. The proposed amendments to

include the NT and Norfolk Island appear to have been an afterthought without any consideration of the consequences detailed above.

1.29 We note the majority committee's comments at 3.54 and 3.55:

desirable. A more thorough approach would have ensured that no

unintended consequences arise from implementation of the Bill, and that any necessary consequential amendments could be made.

3.55 Further, an approach which fails to look at the broad range of issues affecting the autonomy of the ACT and the NT may not be the most

appropriate way of addressing outstanding self-determination matters in those territories, and may not ultimately represent the most considered solution. The committee believes that a systematic and holistic review of self-government arrangements in the ACT and the NT holds merit, and would help to address some of the specific issues raised during this inquiry.

1.30 We agree completely with these comments. We therefore find it disappointing that the majority report recommends that the Senate pass the Bill with respect to the ACT and the Northern Territory 'notwithstanding the view expressed in paragraph 3.55'. Such a conclusion is inconsistent.

1.31 We believe that any changes to the territories self-government legislation should be based on a 'systematic and holistic review of self-government arrangements in the ACT and the NT' as suggested in the majority report and supported by many witnesses during the inquiry.

1.32 The Bill should be either withdrawn or not passed by the Senate.

Other issues

1.33 A range of related issues were canvassed during the inquiry. We make the following brief comments.

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Section 122 o f the Constitution

1.34 It has been argued in support of the Bill that the repeal of the proposed sections will not affect the Federal Parliament's constitutional power pursuant to Section 122 of the Constitution to override Territory laws.

1.35 Whilst that is correct it should be noted that currently any decision by the Governor General to disallow a proposed law of a territory may be in turn be disallowed by the Federal Parliament.

Self-government for the territories

1.36 During the inquiry the NT Chief Minister expressed support for the Bill as it would be a '...small but significant step towards statehood.'4

1.37 This is not the expressed intention of the Bill. Any move toward statehood should be approached in a serious and considered manner not piecemeal nor as a reaction to a particular decision.

Do the citizens of the ACT and NT have less democratic rights than other Australians?

1.38 The territory Chief Ministers and other representatives argued that their citizens have less democratic rights than other Australians. We disagree. The differences between the powers of the respective legislatures and the executive are functions of our system of government.

1.39 The territories are not states. The ACT, as the seat of the national capital, can probably never become one.

1.40 It is not uncommon for the different levels of government, state, territory and local to complain that their decisions, and the views of their constituents, have been overridden by decisions of ministers. Indeed it is an inherent feature of the different levels of government within our democracy.

Recommendation

1.41 We recommend that the Bill not be passed.

Senator Michael Forshaw Senator Stephen Hutchins

4 Committee Hansard, 16 March 2011, p. 2.

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APPENDIX 1

SUBMISSIONS RECEIVED

Submission Number Submitter

1 Professor George Williams

2 Mr Sean Parnell

3 Mr Michael Moore

4 The Hon Jane Aagaard MLA

5 Mr Malcolm Mackerras AO

6 Mrs Chris Knight

7 Mr Greg Cornwell AM

8 Dr Charlie Carter

9 Mr Peter Phillips

10 Ms Rita Joseph

11 Associate Professor Thomas Faunce

12 Ms Saan Ecker

13 Mr Matthew Christie

14 Mr Peter Rose

15 Mr Matthew Clarke

16 Mr Stephen Bates

17 Ms Anne-Maree Althaus

18 Mr Stephen Brown

19 Ms Linda Steadman

20 Mr Jon Stanhope MLA

21 The Hon Paul Henderson MLA

22 Mr Marshall Perron

23 Mr Mark McRae

24 Australian Christian Lobby

25 Civil Liberties Australia

26 Australian Marriage Equality

27 Mr Jamie Allen

28 Mr Stuart Baanstra

29 Mr Shane Rattenbury MLA

30 FamilyVoice Australia

31 Mr Peter Maywald

32 Mr Raymond Montalban

33 Ms Penelope Webb

34 Mr Anthony Batchelder

35 Ms Kathleen Woolf

36 Law Council of Australia

37 Law Society of the Northern Territory

38 Anglican Deaconess Ministries Limited

39 Canberra Liberals

247

40 41 42 43 44 45 46 47

48 49 50 51

52 53 54 55 56 58 59 60 61 62 63 64 65 66 67 68

69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86

Mr Peter Dolan Social Issues Executive Mr Geoffrey Mongan Australian Family Association (SA Branch) Mr Peter Gately Castan Centre for Human Rights Law Ms Cheryl Saunders AO ACT Greens Ms Anne Cahill Lambert Ethical Rights Equal Love Canberra Mr Gerard Calilhanna Professor John Williams Mrs June Henderson Ms Ursula Bennett Mrs Precious Tomayo Ms Gai Brodtmann MP and Dr Andrew Leigh MP Ms Nicole Power Australian Federation for the Family Ms Tara Mclnnes Ms Jody Matich Mr Mark Parham Mr Joe Lopez Mr Craig Freeman Professor Geoffrey Lindell Fr Michael Grace Mr Edward 'tHart Mrs Clair Freeman Mr Brandon Appleton Mr Jason Lee Ms Stephanie Mitchell Mr Kevin Sargeant Ms Julie Seeto Mr Frank Leong Family Council of Victoria

Ms Gian Sechi Canberra Business Council Mr Barry Steffens Mr Peter Allard Ms Mandy Chapman Ms Kellie Derham Mr John RL Neil Mr Kevin Seaman Mr Colin Stollery Mr Gary Pesavento Mr and Mrs John and Jane Gresser

248

87 88 89 90 91 92 93 94 95 96 97 98 99

100 101 102 103 104 105 106 107 108

109 110 111

112 113 114 115 116 117 118 119 120 121

122 123 124 125 126 127 128 129 130 131

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Ms Donna Harrison Mr Ian Gowland Ms Linda Pienaar Mr Bernard Richards Ms Amy Metcalfe Ms Dalrene Pompeus Mr JD O *Reilly Ms Loyola McKinlay Mr and Mrs Allen and Dolores Fredericks Ms Mary Haddow Mr Peter Stokes, Salt Shakers Inc Ms Jessica Brown Mr Brett Murray Dr Ray W Robinson Mr Roger Latham Mr Darryl Stewart

Mr Matt Grocott Mr Frank Burgess Ms Geraldine Roelink Mr Peter Nathan Ms Aurea Mendoza-Martin

Mr David Olsen Ms Anita Montagna Quiddington Ms Norlie Dooma Mrs Patricia A Steffens

Mrs Jennifer Kellaway Mr Michael Casanova Mrs Karlie Rice

Ms Anne Cameron Ms Suzanne Zelenak Miss Elena Batchelder Miss Sally Guest Mr Graham Jones Name Withheld Ms Gail Musch Name Withheld Name Withheld

Mr Peter Kentley Name Withheld Name Withheld Name Withheld Name Withheld

Name Withheld Name Withheld Name Withheld

Name Withheld

249

133 134 135 136 137 138 139 140 141 142 143 144 145 146 147 148 149 150 151 152 153 154 155 156 157 158 159 160 161 162 163 164 165 166 167 168

169 170 171 172 173 174 175 176 177 178

Name Withheld Name Withheld Name Withheld Name Withheld Name Withheld Name Withheld National Association of Catholic Families Fatherhood Foundation Mr Peter Allard

Ms Coral Belrost Ms Cynthia Taylor Mr Ross Stewart Ms Carolyn Parker

HOPE: preventing euthanasia and assisted suicide Ms Delphine Hattingh Ms Karen Evans Mr Darijo Cakarun Mr David McDonald Ms Gillian Tierney Mr Patrick Neville Ms Sarah Wheeley Mr Philip Cosgrove Ms Vicki Cosgrove Mr John Von Dinklage Ms Anne Kirkwood Mr James Pryor Ms Michelle King Mr Johan Hattingh Mr Michael Tome Mr Bill Fraser Mr Alexander Robertson Ms Helen Gordon Ms Elin Thomson Ms Catherine Sullivan Mr Andrew Gwynne

Confidential Australian Family Association (Victorian Branch) Mr David Cahill Mr David and Mrs Carmel Haire Name Withheld Ms Caroline Batchelder Ms Penelope Sechi Mr and Mrs Les and Marie Gapps Mr Wayne Roberts Ms Sylvia Pons Mrs Roslyn Owens

250

179 180 181 182

183 184 185 186 187 188 189 190 191 192 193 194 195 196 197 198 199 200 201 202 203 204 205 206 207 208 209

Page 49

Mr Alan Lucas Mr and Mrs Anthony and Olga Deppe Ms Marguerite Feeney Mr Rob Feeney Mr Callum Rae Ms Kelly Small Name Withheld Name Withheld Name Withheld Name Withheld Name Withheld

Name Withheld Name Withheld Name Withheld Name Withheld

Ms Joanne Sam Ms Steff Dirkis Mr Angus OMeara, Ms Maddie Fraser and Ms Lauren Hogarth

Ms Imogen Dadswell, Mr Joshua Beer, and Mr William O'Neill Ms Anne Hansen Ms Tahlia Makunde Ms Micaela Ferrmgton and Ms Kayla Smurthwaite

Mr Jasper Bell Mr Jordan Rodgers Mr Markus Otting

Mr Thomas Downes Ms Dawn Williams Streetlaw Weston Creek Sub-Branch, Australian Labor Party, ACT Branch Mr and Mrs Hugo and Nell Vandenbos Australian Family Association, ACT Branch

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ADDITIONAL INFORMATION RECEIVED

1 Answer to Question on Notice provided by Mr Zed Seselja, Leader of the Opposition in the Australian Capital Territory, on 17 March 2011

2 Additional Information provided by the Hon Jane Aagaard MLA, Speaker of the Legislative Assembly of the Northern Territory, on 17 March 2011

3 Letter from President of the Senate tabled by Senator Crossin, Chair of the Legal and Constitutional Affairs Legislation Committee, at public hearing on 21 March 2011

4 Answers to Questions on Notice, provided by Department of Regional Australia, Regional Development and Local Government, on 29 March 2011

252

APPENDIX 2

WITNESSES WHO APPEARED BEFORE THE COMMITTEE

Canberra, 16 March 2011

AAGAARD, the Hon. Jane ML A, Speaker of the Northern Territory Legislative Assembly; Chair of the Northern Territory Legislative Assembly Standing Committee on Legal and Constitutional Affairs

CHANDLER, Mr Peter, MLA, Member for Brennan, Northern Territory Legislative Assembly Standing Committee on Legal and Constitutional Affairs

DUNCAN, Mi- Tom, Clerk of the Legislative Assembly, Australian Capital Territory Legislative Assembly

HENDERSON, The Hon. Paul, MLA, Chief Minister for the Northern Territoiy

PURICK, Ms Kezia, MLA, Member for Goyder, Northern Territory Legislative Assembly Standing Committee on Legal and Constitutional Affairs

RATTENBURY, Mr Shane, Speaker of the Legislative Assembly, Australian Capital Territory Legislative Assembly

SESELJA, Mr Zed MLA, Leader, Canberra Liberals

STANHOPE, Mr Jon, MLA, Chief Minister of the Australian Capital Territory

WILLIAMS, Professor George, Professor of Law, Gilbert + Tobin Centre of Public Law, University of New South Wales

Canberra, 21 March 2011

CLAY, Mr Stephen, Acting Assistant Secretary, Territories East, Territories Division, Department of Regional Australia, Regional Development and Local Government

YATES, Mr Julian, First Assistant Secretary, Territories Division, Department of Regional Australia, Regional Development and Local Government

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The Senate

Legal and Constitutional Affairs

Legislation Committee

Australian Transaction Reports and Analysis Centre Supervisory Cost Recovery Levy Bill 2011 [Provisions]

Australian Transaction Reports and Analysis Centre Supervisory Cost Recovery Levy (Collection) Bill 2011 [Provisions]

Australian Transaction Reports and Analysis Centre Supervisory Cost Recovery Levy (Consequential Amendments) Bill 2011 [Provisions]

June 2011

255

Â© Commonwealth of Australia

ISBN: 978-1-74229-474-2

This document was printed by the Senate Printing Unit, Department of the Senate, Parliament House, Canberra.

256

MEMBERS OF THE COMMITTEE

Members

Senator Patricia Crossin, Chair, ALP, NT

Senator Guy Barnett, Deputy Chair, LP, TAS

Senator Mark Fumer, ALP, QLD

Senator Scott Ludlam, AG, WA

Senator Stephen Parry, LP, TAS

Senator Louise Pratt, ALP, WA

Secretariat

Ms Julie Dennett

Mr Shon Fletcher

Ms Sandra Kennedy

Ms Hana Jones

Committee Secretary

Inquiry Secretary

Principal Research Officer-

Administrative Officer

Suite SI.61 Telephone: (02) 6277 3560

Parliament House Fax: (02) 6277 5794

CANBERRA ACT 2600 Email: legcon.sen@aph.gov.au

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257

258

TABLE OF CONTENTS

MEMBERSHIP OF COMMITTEE

CHAPTER 1..........................................................................................................1

INTRODUCTION......................................................................................................1

Background...............................................................................................................1

Scrutiny of Bills report............................................................................................ 2

Conduct of the inquiry..............................................................................................3

Acknowledgement.................................................. .3

Scope of the report....................................................................................................3

Note on references..., ............................................................. 3

CHAPTER 2................................................................................... 5

KEY ISSUES...............................................................................................................5

Introduction ...................... 5

Key provisions of the bills ...................................... 6

Issues raised ...................... 11

Committee view......................................................................................................20

ADDITIONAL COMMENTS BY LIBERAL SENATORS ......................... 23

Overview................................................. 23

Concerns.................................................................................................................23

APPENDIX 1...................................................................................................... 27

SUBMISSIONS RECEIVED.................................................................................. 27

APPENDIX 2...................................................................................................... 29

AUSTRALIAN GOVERNMENT COST RECOVERY GUIDELINES - 14 KEY PRINCIPLES .................. 29

259

260

CHAPTER 1

INTRODUCTION

Background

1.1 The Australian Transaction Reports and Analysis Centre Supervisory Cost Recovery Levy Bill 2011, the Australian Transaction Reports and Analysis Centre Supervisory Cost Recovery Levy (Collection) Bill 2011, and the Australian Transaction Reports and Analysis Centre Supervisory Cost Recovery Levy (Consequential Amendments) Bill 2011 were introduced into the House of Representatives on 12 May 2011 by the Hon Brendan O'Connor MP, Minister for Home Affairs and Justice (minister).1 On the same day, on the recommendation of the

Selection of Bills Committee, the Senate referred the provisions of all three bills to the Legal and Constitutional Affairs Committee (committee) for inquiry and report by 16 June 2011.2 3 On 16 June 2011, the Senate granted an extension of time for reporting until 20 June 2011.

The bills

1.2 This suite of bills will give effect to a 2010-11 Federal Budget announcement that the Australian Transaction Reports and Analysis Centre (AUSTRAC) would be given the authority to recover the costs of its business-as-usual regulatory activities, including the regulation of activities to ensure compliance with the Anti-Money Laundering and Counter-Terrorism Financing Act 2006? That announcement detailed

that the fees would be imposed from 1 July 2011. It is expected that the introduction of the supervisory levy will collect $118.3 million over the forward estimates period (2011-15).4

1.3 The introduction of a supervisory levy to recover the costs of these activities follows consultation with industry concerning how AUSTRAC should recover its regulatory costs.5 A discussion paper on the proposed cost recovery model was released for public comment on 12 November 2010.6 An exposure draft of the Cost Recovery Impact Statement (CRIS) for the measure was released on

1 House of Representatives Hansard, 12 May 2011, p. 11.

2 Selection of Bills Committee, Report No. 6 of 2011, p. 1.

3 Department of the Treasury, Federal Budget 2010-11, Budget Paper 2, May 2010, p. 95.

4 Explanatory Memorandum (EM), p. 1.

5 The Hon. Brenda O'Connor MP, Minister for Justice, Australian Transaction Reports and Analysis Centre Supervisory Cost Recovery Levy Bill 2011, Second Reading Speech, May 2011,p.3.

6 54 submissions were received in response to the release of the consultation paper.

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11 February 2011.7 In response to concerns raised as a result of the consultation undertaken, AUSTRAC amended the CRIS and released the current (final) CRIS on 12 May 2011, the day on which the bills were introduced into parliament.

1.4 As a result of that consultation, the formula for recovering costs has changed significantly from the proposal in the 2010-11 budget papers. As a result, the levy will not be paid by around half of the businesses regulated by AUSTRAC. Those exempt from the levy will include micro businesses, small remitters (eg post office agents and newsagents) and gaming venues with a small number of gaming machines.

1.5 On introducing the bills the Minister explained the need for a levy citing that:

[i]t is appropriate that industry meet the costs of regulatory systems that ensure the integrity of their operating environment.8

1.6 The AUSTRAC levy measures contained in the bills are consistent with past practice and the need for cost recovery to protect Australia's financial system.

Scrutiny of Bills report

1.7 The Scrutiny of Bills Committee (Scrutiny Committee) released its Alert Digest No. 5 of 2011 on 15 June 2011. In that Digest the Scrutiny Committee made comment in respect of both the Levy Bill and the Collection Bill. They made no comment on the Consequential Amendments Bill.

1.8 In respect of the Levy Bill, the Scrutiny Committee has raised a concern that although assurance is given that over-collection will be adjusted in future years that assurance is not reflected in the legislation. As a result the committee has sought the Minister's advice:

...as to whether consideration has been given to including a safeguard in the legislation to provide that any over-collection will be adjusted.9

1.9 The Scrutiny Committee also drew attention to the retrospective application of Clause 7 in the Collection Bill which provides that cost recovery will apply from the 2011-12 financial year. In respect of this provision the Scrutiny Committee notes that:

[t]he clear intention of the bill is that a levy imposed may be charged to cover a period that precedes the commencement of the relevant

legislation.10

1.10 Concerning this matter, the Scrutiny Committee recommends that:

the appropriateness of this provision be left to the Senate as a whole. 11

7 27 submissions were received in response to the exposure draft of the CRIS.

8 EM, p. 1.

9 Scrutiny of Bills Committee, Alert Digest No. 5 of 2011, pp 12-13.

10 Scrutiny of Bills Committee, Alert Digest No. 5 of 2011, p. 10.

262

Conduct of the inquiry

1.11 The committee advertised the inquiry in the national press (77?e Australian ) on 25 May 2011, and on its website; and also wrote to a number of stakeholders inviting submissions. Details of the inquiry, the bill and associated documents were made available on the committee's website.

1.12 The committee received 12 submissions, which are available on the committee's website. A list of submitters to the inquiry is set out in Appendix 1. There were no public hearings for this inquiry.

Acknowledgement

1.13 The committee thanks all those organisations who made submissions to the inquiry.

Scope of the report

1.14 Chapter 2 provides an outline of the bills, their key provisions and discusses the issues raised in submissions received by the committee.

Note on references

1.15 References in this report are to individual submissions as received by the committee, not to a bound volume. 11

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11 Scrutiny of Bills Committee, Alert Digest No. 5 of 2011, p. 10.

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CHAPTER 2

KEY ISSUES

Introduction

2.1 The Australian Government is committed to protecting the Australian community and businesses from the social and economic impacts of organised crime, estimated to cost the community $15 billion a year. Organised crime is a significant

national security threat, and a growing challenge.

2.2 Through the Commonwealth Organised Crime Strategic Framework the government is ensuring that Commonwealth intelligence, policy, regulatory and law enforcement agencies are working together to prevent, disrupt, investigate and

prosecute organised crime. Tracking money flows, the life-blood of organised crime, is critical.

2.3 AUSTRAC is at the forefront of the fight against transnational organised crime. AUSTRAC provides information about potentially criminal activity to law enforcement agencies, which put it together with other intelligence to detect people smuggling, drug importations, black market weapons trade, and other serious and

violent crimes. AUSTRAC intelligence is used to detect drug and chemical precursor transactions, people smuggling, corruption, card skimming, Ponzi scams, tax evasion and fraud. In the 2009-10 financial year AUSTRAC information contributed to:

" more than 3,700 cases conducted by the Australian Federal Police and other partner agencies;

" more than 1,800 cases conducted by the Australian Taxation Office, resulting in recovery of evaded taxes in excess of $272 million; and

" more than 1,200 cases involving Centrelink, leading to total more than $7 million in savings per year.

2.4 AUSTRAC achieves its purpose of protecting the integrity of the financial system and contributing to the administration of justice through its two interdependent functions as both a regulator and an intelligence unit.1 As a regulator, AUSTRAC supervises the compliance of reporting entities with their obligations under the Antiâ Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act).2

2.5 The introduction of this suite of three bills will enable AUSTRAC to recover the costs of its regulatory activities - including its business as usual supervisory

1 Explanatory Memorandum (EM), p. 1.

2 EM, p. 1.

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activities and additional revenues to support small business compliance, the legal costs of enforcement and implementation and administration costs.3

Key provisions of the bills

2.6 The three related bills introduce the supervisory levy, establish a framework for collection and amend the AML/CTF Act to ensure that enrolment as a registered entity requiring AUSTRAC regulation is mandatory.

The first bill: Australian Transaction Reports and Analysis Centre Supervisory Cost Recovery Levy Bill 2011 (the Levy Bill)

2.7 The Levy Bill creates the liability to the levy.4 5 The explanatory memorandum (EM) explains that the amount of the levy will be determined by a legislative instrument made by the minister.3 The levy will be payable as a single annual charge and the amount of charge to be paid will be determined each year on 'census day'.67 7

2.8 Clause 9 of the Levy Bill specifies that if the levy payable for a financial year is less than the 'statutory minimum' for a financial year (defined in Clause 7 of the bill as $100 for the 2011-12 financial year) there will be no liability to the levy.8

2.9 On introducing the bills into the House of Representatives, the minister explained that the levy would be comprised of three components:

1. a base component;

2. a large entity component; and

3. a component for transaction reporting entities.9

3 EM, p. 1.

4 EM, p. 2.

5 EM, p. 2.

6 The Hon. Brendan O'Connor MP, Minister for Home Affairs and Justice, Second Reading Speech, House of Representatives Hansard , 12 May 2011, pp 12-13. The 'census day' for the 2011-12 financial year (the first financial year in which the levy applies) will be the day determined by the AUSTRAC Chief Executive Officer, for every year thereafter, the 'census day' will be 1 July or another such day as specified by the AUSTRAC CEO. Source: Second Reading Speech, House of Representatives Hansard, 12 May 2011, pp 12-13.

7 The Hon Brendan O'Connor MP, Minister for Home Affairs and Justice, Australian Transaction Reports and Analysis Centre Supervisory Cost Recovery Levy Bill 2011, Second Reading Speech, House of Representatives Hansard, 12 May 2011, p. 5.

8 Australian Transaction Reports and Analysis Centre Supervisory Cost Recovery Levy Bill 2011, Clauses 7, 9, pp 4 (line 18-23), 5 (line 28-31).

9 The Hon Brendan O'Connor MP, Minister for Home Affairs and Justice, Australian Transaction Reports and Analysis Centre Supervisory Cost Recovery Levy Bill 2011, Second Reading Speech, House of Representatives Hansard, May 2011, 12 May 2011, p. 13.

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The base component

2.10 The base component will relate to the costs incurred by AUSTRAC in regulating all businesses. This component will be the same across organisations liable to pay the levy.10 The draft ministerial determination that has been published for consultation by AUSTRAC11 identifies that the base component for the 2011-12

financial year will be $284.12

2.11 The draft determination also identifies that there will be exclusions from the levy - a reporting entity that, at the census date, has fewer than five employees and a nil large entity component will be exempt from liability to the levy.13 This reduces compliance costs for small business.

2.12 The Levy Bill also prescribes a statutory upper limit for the levy liability. In the 2011-12 financial year the upper limit is $33 million. This limit will increase in subsequent financial years as an indexation factor will be applied.14 15

The large entity component

2.13 The large entity component will be paid by businesses with high earnings to recover the costs incurred by AUSTRAC in relation to regulating larger businesses. This component will be determined based on a business's earnings - i.e. the higher its earnings, the higher the large entity component will be.13 The committee notes that following the release of an exposure draft CR1S for consultation, the large entity definition was changed in response to stakeholder concerns.16

2.14 The large entity component is set out in the draft ministerial determination as:

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10 The Hon Brendan O'Connor MP, Minister for Home Affairs and Justice, Australian Transaction Reports and Analysis Centre Supervisory Cost Recovery Levy Bill 2011, Second Reading Speech, House of Representatives Hansard , May 2011, p. 5.

11 The draft ministerial determination can be accessed via AUSTRAC's website: http://w\vw.austrac.gov.au/files/scrl determ3.pdf. (accessed 30 May 2011).

12 The Hon. Brendan O'Connor MP, Minister for Home Affairs and Justice, Draft Australian Transaction Reports and Analysis Supervisory Cost Recovery Levy * Determination 2011, 12 May 201 l,Item 5, p. 4.

13 The Hon. Brendan O'Connor MP, Minister for Home Affairs and Justice, Draft Australian Transaction Reports and Analysis Supervisory> Cost Recovery Levy * Determination 2011, 12 May 2011, Item 5, p. 4.

14 EM, p. 2.

15 The Hon Brendan O'Connor MP, Minister for Home Affairs and Justice, Australian Transaction Reports and Analysis Centre Supervisory Cost Recovery Levy Bill 2011, Second Reading Speech, House of Representatives Hansard , May 2011, *Â°â 5.

16 Australian Transaction Reports and Analysis Centre, Cost recovery for AUSTRAC's regulatory functions -further consultation regarding an alternative definition of a large entity>, httu://www.austrac.gov.au/files/large entity consultation! 10324.pdf (viewed 1 June 2011), p. 1.

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Large entity component

(1) The large entity component for a leviable entity is:

(a) for a leviable entity that is not a part of a group of leviable entities - the relevant amount in the second column of the table below; or

(b) for a leviable entity that is part of a group of leviable entities - the

relevant amount in the second column of the table below divided by the number of leviable entities in the group.

If the earnings for a leviable entity, or the total earnings for a group of leviable entities, is ...

... the relevant amount below

Equal to or greater than $5,000,000,000 $425,000

Equal to or greater than $500,000,000 but less than $1,000,000,000 $70,000

Equal to or greater than $200,000,000 but less than $500,000,000 $35,000

Equal to or greater than $100,000,000 but less than $200,000,000 $14,000

Less than $100,000,000 nil

(2) For the purposes of sub item (1), where a leviable entity is a foreign company only the earnings of that entity which are derived from operations in Australia is to be taken into account in determining the earnings of that entity, or the total earnings of the group of leviable entities of which the entity is a member.

(3) Despite sub item (1), where:

(a) a leviable entity is a foreign company or a subsidiary of a foreign

company; and

(b) the earnings of that leviable entity which are derived from operations in Australia is less than $100,000,000; and

(c) the total earnings of that leviable entity and its related bodies corporate is equal to or greater than $100,000,000;

then the large entity component for that leviable entity is $14,000.17 * 12

17 The Hon. Brendan O'Connor MP, Minister for Home Affairs and Justice, Draft Australian Transaction Repoi~ts and Analysis Supervisory Cost Recovery Levy Determination 2011, 12 May 2011, Item 6, pp 4-5.

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The transaction reporting component

2.15 The transaction reporting component is to be determined by a formula, as set out in the draft ministerial determination. The formula calculates this component on both volume and value of a reporting entity's transactions.18

2.16 In the first year of the levy, the volume element will be fixed at one cent per leviable transaction and the value element at $0.0005066 per cent of the value of the transaction to which the leviable report relates.19

2.17 This component of the levy will recover AUSTRAC's costs of regulating businesses that lodge large numbers of transaction reports and/or transactions relating to large amounts of money.20

The second bill: Australian Transaction Reports and Analysis Centre Supervisory Cost Recoveiy Levy (Collection) Bill 2011

2.18 The second bill, the Collection Bill, enables AUSTRAC to recover the supervisory levy from businesses by establishing the framework for administering the levy. The Collection Bill does this by dealing with matters relating to collection, the issuing of notices of assessment and late payments.21

2.19 AUSTRAC expects that the first financial year in which the levy will be payable is the 2011-12 financial year.22

2.20 Businesses liable to pay the levy will be issued with a notice of assessment. Notices of assessment will specify the business day on which the levy becomes payable. The bill provides that the due date for payment must be at least 30 days after

the notice of assessment is given.23 Overdue payments will incur a late payment penalty. A late payment penalty will accrue on a monthly basis.24

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18 The Hon. Brendan O'Connor MP, Minister for Home Affairs and Justice, Draft Australian Transaction Reports and Analysis Supervisoiy Cost Recoveiy Levy * Detennination 2011, 12 May 2011, Item 7, p. 5.

19 The Hon. Brendan O *Connor MP, Minister for Home Affairs and Justice, Draft Australian Transaction Reports and Analysis Supervisory Cost Recoveiy Levy * Detennination 2011, 12 May 2011, Item 7, p, 5.

20 The Hon Brendan O'Connor MP, Minister for Home Affairs and Justice, Australian Transaction Reports and Analysis Centre Supervisory Cost Recovery Levy Bill 2011, Second Reading Speech, House of Representatives Hansard, 12 May 2011, p. 5.

21 EM, p. 2.

22 EM, p. 2.

23 Australian Transaction Reports and Analysis Centre Supervisory Cost Recoveiy Levy (Collection) Bill 2011, p. 4 (line 6-14).

24 EM, pp 2-3.

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2.21 The Collection Bill also provides the AUSTRAC Chief Executive Officer (CEO) with the discretion to waive a levy or late payment penalty, in part or in full, if the CEO considers it appropriate.25 Circumstances that may be considered appropriate include where recovery would be inequitable or cause ongoing hardship. A waiver cannot, however, extend to administrative error in relation to the issuing of invoices. In exercising the waiver discretion, the AUSTRAC CEO is required to provide a decision in writing to the applicant. Waiver decisions are reviewable decisions.26

The third bill: Australian Transaction Reports and Analysis Centre Supervisory Cost Recoveiy Levy (Consequential Amendments) Bill 2011 [Provisions]

2.22 The third bill in the suite of bills, the Consequential Amendments Bill, will amend the AML/CTF Act to make mandatory the enrolment of reporting with AUSTRAC.27 Under the existing legislation, enrolment is not mandatory; however, mandatory enrolment is considered necessary as AUSTRAC moves to a cost recovery environment as it ensures transparency, efficiency and effectiveness. Mandatory enrolment will also enable AUSTRAC to issue infringement notices for a failure to enrol.28

2.23 The Consequential Amendments Bill sets out the administrative procedures for enrolment and maintenance of the Reporting Entities Roll as well as penalties for failure to enrol or maintain the record.29

2.24 The Consequential Amendments Bill will amend the AML/CTF Act to require businesses regulated by AUSTRAC to enrol within 28 days of providing or commencing to provide a designated service, or within 28 days of commencement of the relevant provisions of the bill.30 The amendments require that once enrolled, businesses must keep their details up to date. Failure to enrol or keep details up to date will attract a civil penalty.31

2.25 The Consequential Amendments Bill will, however, introduce provisions that enable reporting entities to request the AUSTRAC CEO to remove their name/details

25 EM, p. 10.

26 EM, p. 10.

27 EM, p. 13.

28 The Hon Brendan O'Connor MP, Minister for Home Affairs and Justice, Australian Transaction Reports and Analysis Centre Supervisory Cost Recovery Levy Bill 2011, Second Reading Speech, House of Representatives Hansard , 12 May 2011, p.l.

29 EM, p. 13.

30 Australian Transaction Reports and Analysis Centre Supervisory Cost Recovery Levy (Consequential Amendments) Bill 2011, pp 4 (line 17-28), 5 (line 1-7).

31 The Hon Brendan O'Connor MP, Minister for Home Affairs and Justice, Australian Transaction Reports and Analysis Centre Supervisory Cost Recovery Levy Bill 2011, Second Reading Speech, House of Representatives Hansard, 12 May 2011, p.l.

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from the Reporting Entities Roll. It will also introduce a new section 51G into the AML/CTF Act that will direct the AUSTRAC CEO, when considering such a request, to take into consideration a number of factors:

" whether the business has discharged its reporting obligations,

" whether the entity has ceased to provide designated services, and

" the likelihood that the entity will provide a designated service in the financial year following the request.32

Issues raised

2.26 The introduction of the three related bills follows a targeted consultation period. The committee received 12 public submissions in response to its inquiry into the bills.

2.27 Although submissions received by the committee acknowledged appreciation of the consultation that has preceded these reforms, they did raise concerns in relation to some specific areas:

(i) the appropriateness of the application of cost recovery to AUSTRAC's activities;

(ii) the methodology for determining the levy; and

(iii) other issues.

2.28 In addition to these specific concerns, the committee also notes the concern raised by a number of submitters, that the introduction of the cost recovery supervisory levy will have unintended consequences for smaller reporting entities when the second tranche of AML/CTF reforms are implemented.33

32 Australian Transaction Reports and Analysis Centre Supervisory Cost Recovery Levy (Consequential Amendments) Bill 2011, pp 6 (line 16-32), 7 (line 1-5).

33 The second tranche of reforms will amend the definition of designated services as is currently defined in section 6 of the AML/CTF Act - providers of designated services are required to be regulated. The aim of the tranche two reforms is to extend regulatory obligations to specified transactions conducted by a range of businesses and professions, including dealers in precious metals and stones, lawyers, accountants, real estate agents and trust and company service providers. Draft legislative provisions which will amend the AML/CTF Act to implement the second tranche of reforms were publicly released in August 2007.

The Government is currently considering the implementation process for the second tranche of reforms. The implementation process will include further consultation with the representatives of affected businesses. The tranche two reforms are not within the scope of the bills currently before parliament which propose the introduction of a supervisory levy. Attorney-General's Department, Second Tranche of Reforms, http://www.ag.gov.au/www/agd/agd.nsf/Page/Anti-

monevlaundering SecondTrancheofReforms (accessed 2 June 2011).

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The appropriateness of cost recovery to AUS TRAC's activities

2.29 The Australian Government's Cost Recovery Guidelines identify that cost recovery is appropriate to recover fees and charges related to the provision of goods and services, including regulation, to the private and non-government sectors.34 The

Guidelines set out 14 key principles for agencies to follow when designing cost recovery mechanisms.35

2.30 The Explanatory Memorandum to the bills explains that:

Reporting entities provide services that are vulnerable to exploitation for money laundering and terrorism financing purposes, creating the need for regulation by AUSTRAC. It is appropriate that industry meet the costs of regulatory systems that ensure the integrity of their operating

environment.36

2.31 Submitters to the inquiry however, question this view. For example, CPA Australia argued:

CPA Australia understands the principle of imposing cost recovery levies where a regulated entity receives a direct economic benefit from such regulation (such as tax agents being licensed to offer tax advice when those

unregistered cannot); however being regulated under this regime confers no direct benefit or rights to those regulated. We therefore do not accept the contention in the Explanatory Memorandum that 'It is appropriate that industry meet the costs o f regulatory systems that ensure the integrity of their operating environment.' The entire community, including the government, benefits from the integrity of the financial system.

The direct beneficiaries from the imposition of this Act is AUSTRAC and other law enforcement agencies (because of the intelligence reporting entities provide them), and not reporting entities. Given this, we cannot support the imposition of a cost recovery levy, particularly when complying with the Act already imposes ongoing costs on reporting entities.37

2.32 Stakeholders are critical of the government's decision to recover the costs of its regulatory activities given that, in their view, the result of those activities is in fact a public benefit:

It needs to be borne in mind that AUSTRAC reporting entities, particularly large entities, are part of the allied industry collaborative apparatus combating money laundering and terrorism financing activities. Reporting entities are providing intelligence gathering services to the Government for

34 Department of Finance and Deregulation, Australian government cost recovery guidelines , July 2005, p. 2.

35 The 14 key principles of the Australian Government *s cost recovery guidelines are set out in Appendix 2.

36 EM, p. 1.

37 CPA Australia, Submission 3, p. 1.

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free, which is of benefit to the Australian community as a whole. The value of these services provided by the financial services industry to the Australian community is not acknowledged in the Cost Recovery Impact Statement (CRIS).

The imposition of a levy on AML/CTF reporting entities would fall outside the Australian Government's own Cost Recovery Guidelines and on that basis the merits of the proposals contained in the Bills should be

reconsidered and an alternative approach adopted.38 39 40 41

2.33 The Australian Financial Markets Association challenge the assertion that businesses benefit from AUSTRAC's regulatory activities. They are of the view that:

AUSTRAC supervision provides no commensurate benefit to reporting entities individually, in contrast to financial services regulation which provides systemic, prudential and market integrity value to market . . 39

participants.

2.34 CPA Australia suggest that government should bear the costs of educating industry participants:

It is the responsibility of government to provide information and education material to help the community comply with the law, and hence such costs should be paid for from consolidated revenue, not directly by reporting .... 40

entities.

2.35 It was suggested that it would be more appropriate for government to recover the costs of AUSTRAC's regulatory activities from consolidated revenue:

...the benefits of the AML/CTF regime should be viewed as broad public policy outcomes that are more appropriately characterised as 'public goods' in an economic sense. The benefits derived are not restricted to reporting entities alone. This fact is important in the context of assessing whether or not the regulatory costs should be met from consolidated government

revenues.

Committee comment

2.36 The committee notes the criticism of the government's decision to impose a supervisory cost recovery levy. The committee however draws attention to the government's cost recovery guidelines (principle 5) which clearly identify regulatory activities as a cost that should appropriately be recovered.42

38 ICAA, Submission 4, p. 1.

39 AFMA, Submission 6, p. 3.

40 CPA Australia, Submission 3, p. 2.

41 ICAA, Submission 4,p. 1.

42 http://www.fmance. gov.au/publications/ftn ance-circulars/2005/docs/Cost Recovery Guidelines.pdf (accessed 17 June 2011)

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2.37 The committee emphasises the fact that it is the policy of recent governments that entities which have created the need for government regulation bear the costs of that regulation. Other regulators, such as the Australian Prudential Regulation Authority, already recover the costs of their regulatory activities from the entities which they regulate. The AUSTRAC bills propose nothing new or different in terms of cost recovery application to an industry.

2.38 Businesses that provide services that are vulnerable to exploitation for money laundering and terrorism financing purposes create the need for regulation by AUSTRAC. It is entirely appropriate therefore that they meet the costs of the regulatory systems that ensure the integrity of their operating environment.

2.39 The committee takes the view that cost recovery in these circumstances is not only appropriate and accords with the government's guidelines, but also strengthens and improves the integrity of Australia's financial system.

The levy methodology

2.40 Submitters to the committee's inquiry also raised concerns regarding the proposed levy calculation methodology.

2.41 One submitter, Citigroup, raised concerns that the levy will not be applied equally to all services regulated by AUSTRAC and that it will place financial institutions operating in Australia at a 'substantial' competitive disadvantage compared to other businesses operating in the Asia Pacific but doing so outside of Australia.43

2.42 They take the view that implementation of the levy, in accordance with the methodology that has been proposed, will have unintended consequences.44

The levy calculation methodology currently proposed by the Minister will place Australia and its financial institutions at a competitive disadvantage to other countries and financial institutions in the Asia-Pacific region. The proposed methodology heavily weights the levy disproportionately to those

financial institutions in Australia that provide high value cross border payments and settlement flows;

Financial institutions that run pan-Asia custody hubs, regional processing centres and/or payments and trade service centres all process significant and high value cross-border payments and settlement flows for legitimate business reasons. The proposed levy will therefore discourage financial institutions from establishing and maintaining these financial services hubs

in Australia given the significant cost increase imposed by this levy;

Established hubs located in Australia, will equally have no incentive to grow or expand their business model given any increase in cross border payment and settlement flows will mean an increase in the levy...45

43 Citigroup, Submission 1, p. 1.

44 Citigroup, Submission 1, p. 2.

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2.43 The Australian Financial Markets Association (AFMA) was also of the view that the levy's calculation is not equitable. They drew attention to the burden that will be placed on large entities and challenged the assumption that such entities are more prone to risks of money laundering and/or terrorism financing:

It is not correct to assume that a financial intermediary which has more customers is exposed to a higher level of money laundering risk. Indeed, the clients that AFMA members typically deal with are institutional and wholesale clients who, in turn, are likely to be reporting entities themselves and regulated under the AML/CTF Act, or under an AML regime in a

comparable jurisdiction. These types of clients are, we suggest, at much lower risk of being engaged in money laundering and terrorism financing activities...the mere fact that a large entity may operate over multiple jurisdictions is not something for which AUSTRAC has supervisory

responsibility, and is not a basis to justify a level of cost recovery that is out of proportion to the money laundering risk posed by the financial

intermediary's legitimate activities.45 46

2.44 In addition to concerns being raised in relation to large entities, CPA Australia also raised concerns that the levy would have onerous implications for micro businesses and that the exclusion of entities from liability to the levy with less than five employees did not go far enough. As an alternative they suggested that the

definition of small business used to determine the base component in the legislative instrument (Item 5, p. 4 of the draft legislative instrument sets out the definition of small business for determining the base component of the levy) be changed and that the Australian Bureau of Statistics definition of small business be used instead:

We recommend that should the Bill proceed, the method by which most micro businesses (under five employees) are effectively removed from having to pay the levy (removing such businesses from the base

component) be extended to all small business as defined by the Australian Bureau of Statistics (a business employing less than 20 employees).47

Committee comment

2.45 The committee acknowledges concerns that have been raised in relation to the levy's methodology. The committee however draws attention to the safeguard that the government has announced - the commitment to review the calculation methodology after five years or earlier if there are material changes to the AUSTRAC operating environment.48

45 Citigroup, Submission 7, p. 2

46 AFMA, Submission 6, p. 5.

47 CPA Australia, Submission 3, p. 1.

48 The Hon Brendan O'Connor MP, Minister for Home Affairs and Justice, Australian Transaction Reports and Analysis Centre Supervisory Cost Recovery Levy Bill 2011, Second Reading Speech, House of Representatives Hansard, 12 May 2011, p. 6.

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2.46 The committee also notes AUSTRAC's commitment to monitor the cost recovery approach on an ongoing basis.

Other issues

2.47 Submissions from Burnings, Coles Liquor, Coles Express, Target and the Australian National Retailers' Association49 expressed concern about the operation of the Anti-money Laundering and Counter-Terrorism Financing Rules Instrument 2010 (No.3) (Rules). The Rules are made under the Anti-Money Laundering and Counterâ

Terrorism Financing Act 2006\ these rules (contained in Schedule 3 of the instrument) commence on 1 October 2011.

2.48 The large retailers are concerned that under the Rules, when they conduct cash pick-up or receive cash deliveries with secure cash collection entities such as ArmaGuard, those collection agencies will request:

personal information from employees and contractors who despatch or receipt cash to a reporting entity on behalf of a corporate entity whose identity is known.

In our view, these measures

" increase risks of security breaches;

" are confronting to our staff and contractors;

" raise additional operational issues;

" increase the burden of compliance; and

" increase costs to the business;

without effectively adding to the prevention of anti-money laundering or counter terrorism measures when compared with the information regarding threshold transactions that is already being recorded and reported to AUSTRAC under the existing rules...

The proposed legislation requires reporting entities to solicit the following information from individuals who are involved in transactions on behalf of their employers from 1 October 2011:

" Full name (and any other names that they may be known by)

" Date of birth

" Residential address

" Postal address (if different)

" Phone number

" Occupation

49 Coles Liquor, Submission 7, pp 1-2; Runnings Group Ltd, Submission 8 , p. 1; Coles Express, Submission 9, pp 1-2; Target, Submission 10, pp 1-2; Australian National Retailers' Association, Submission 11, pp 1-2.

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" Methodology for verifying the individuals' identity.50

2.49 Coles make the point in their submission that the provision of employee personal information to AUSTRAC does not contribute to the detection of offences under the AML/CTF legislation and leads only to additional costs to business.51 Coles suggests that this issue could be addressed by excluding the requirement to report the personal information of employees and agents where:

...the identity of the corporate entity is known.52

2.50 The committee notes that these Rules reflect:

...changes to TTR requirements arise as a result of Rules made by the

AUSTRAC CEO under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006. AUSTRAC consulted extensively with reporting entities on these Rules during 2010 and the final Rules were made on 17 December 2010. The Rules are disallowable legislative instruments. These new obligations will commence on 1 October 2011.53

AUSTRAC's response

2.51 The submissions from Bunnings, Coles Liquor, Coles Express, Target and the Australian National Retailers' Association link the Rules and the Levy Bills. After these issues were raised with the committee, AUSTRAC provided advice explaining

that the concerns of these stakeholders do not correctly relate to the bills currently before parliament:

[the] submissions relate to requirements for reporting entities [such as cash collection entities] regulated by the Australian Transaction Reports and Analysis Centre (AUSTRAC) to collect and report to AUSTRAC additional details within threshold transaction reports (TTRs)...

Contrary to statements made in the submissions, these new obligations are not related to measures contained in the three AUSTRAC Supervisory Cost Recovery Bills currently being considered by the Committee.

Rather, changes to TTR requirements arise as a result of Rules made by the AUSTRAC CEO under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006. AUSTRAC consulted extensively with reporting entities on these Rules during 2010 and the final Rules were made on 17 December 2010. These new obligations will commence on 1 October

2011...

[T]hese new requirements will mean that reporting entities, such as cash carriers, will be required to capture basic identification information about

50 Coles, Submission 5, p. 1.

51 Coles, Submission 5, pp 4-5.

52 Coles, Submission 5, p. 5.

53 Australian Transaction Reports and Analysis Centre (AUSTRAC), Submission 12, p. 1.

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the person conducting a transaction, if that person is not the customer of the reporting entity.

Some cash carrying firms have interpreted this to mean that they have to collect the details of their customers * staff members every time they pick up cash in excess of $10,000 under the terms of a standard contract. If this were the case, this would have an operational impact on large retailers such

as those which have made submissions to the Committee.

AUSTRAC's view is that this obligation should not require the capture of staff details in such circumstances.54

Committee comment

2.52 The committee notes the concerns of some of the large reporting entities, and is pleased by AUSTRAC's reassurance that:

In light of the concerns raised, AUSTRAC will consult further with the cash carrying industry to make it clear that for cash carriers, it is not necessary for staff details to be collected where cash is collected from a customer's premises under a standing arrangement.55

2.53 The committee has confidence that the concerns of these stakeholders will be addressed given AUSTRAC's further commitment to consider 'whether the wording of the [AML/CTF] Rules needs to be changed to make this position clear', and to conduct further stakeholder consultation in relation to any proposed changes to the Rules.56 57 58

Consultation

2.54 Although concerns were raised with the committee in relation to the application of the levy and the method by which it will be determined, stakeholders such as CPA Australia and the Institute of Chartered Accountants of Australia did acknowledge their appreciation of the consultation process which has taken place.37

We would like to thank AUSTRAC for consulting with us and the broader community on the detail of the Government's cost recovery policy in relation to the Anti-Money Laundering regime.5

The Institute of Chartered Accountants in Australia (the Institute) welcomes the opportunity to present to the Senate Legal and Constitutional Affairs Committee our views on the above Bills currently being considered as part of this inquiry... the Institute continues to unequivocally support the policy

54 AUSTRAC, Submission 12, pp 1-2.

55 AUSTRAC, Submission 12, p. 2.

56 AUSTRAC, Submission 12, p. 2.

57 An overview of the consultation process AUSTRAC has undertaken is set out in Chapter 1.

58 CPA Australia, Submission 3, p. 1.

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objectives of the Act, and the implementation of the Financial Action Taskforce (FATF) Revised 40 Recommendations...59

A broader concern

2.55 Submitters expressed concern over how the tranche two reforms would interact with the amendments contained in the levy bills:

Successive governments have failed to introduce Tranche 2 as promised at the time the AML/CTF regime was implemented. There are a significant number of entities that would become reporting entities under Tranche 2

and would therefore be subject to cost recovery, which would reduce the cost recovery burden on existing reporting entities.60

2.56 Although this suite of bills will assist the government's announced reforms to the regulatory environment by introducing a levy to fund AUSTRAC's supervisory activities, they do not implement the breadth of changes that the government foreshadowed would occur under the tranche two reforms. Submitters are therefore of the view that the implementation of the supervisory levy before the introduction of the changes that will extend the scope of regulation, will have negative implications for entities that, at this point in time do not fall within the regulatory regime but will do so following passage of the broader reforms:

...the Law Council notes that it is the Government's longstanding intention to introduce a second tranche of AML/CTF reforms, which would expand the current regulatory regime to a range of so-called "gate-keeper"

industries, including the legal profession. Should this occur, the Law Council would be quite concerned if legal practices, in addition to incurring the substantial compliance costs associated with the regime, were also required to pay a direct fee to be regulated. The combined effect of such an impost may prove prohibitive for smaller practices and result in the withdrawal of certain services or an increase in the cost of such services.61

At an overarching level, the Institute is concerned that the proposed cost recovery levy model set out in the above Bills will serve as the basis for a similar approach being adopted in respect of Tranche 2 reporting entities in the future. The adoption of such an approach would, in our view, place an unreasonable burden on small to medium sized professional accounting

practices across Australia... In relation to Tranche 2 reporting entities, approximately 95 percent of our members * practices are made up of five partners or less. As to be expected, such small practices have limited capacity and resources to bear high compliance and regulatory costs.62

59 ICAA, Submission 4, p. 1.

60 Australian Financial Markets Association (AFMA), Submission 6, p. 7.

61 Law Council of Australia, Submission 2, pp 1-2.

62 Institute of Chartered Accountants in Australia (ICAA), Submission 4, pp 1-2.

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We recommend that AUSTRAC clarify whether it intends to impose the cost recovery levy on entities caught within the second tranche. It is suggested that those second tranche entities that would have to pay the levy once the second tranche is enacted, be given an exemption from the levy during the transition to the full implementation of the second tranche, in recognition of the costs incurred in becoming compliant.63

Committee comment

2.5*Ã¤ The committee acknowledges these concerns and recognises that further consultation occur between the government and Tranche Two entities. The committee recommends that this consultation occur prior to any expansion of the AML/CTF regime.

Committee view

2.58 The committee acknowledges AUSTRAC's important role to protect the integrity of Australia's financial system, and recognises that AUSTRAC contributes to the administration of justice through its role as Australia's financial intelligence unit

and anti-money laundering/counter terrorism financing regulator.64 65

2.59 AUSTRAC's activities of providing information about potentially criminal activity to law enforcement agencies and working with other intelligence agencies to detect people smuggling, drug importations, black market weapons trade and other serious and violent crimes ensures it delivers these important outcomes in accordance with its statutory objectives.

2.60 The committee is of the view that the introduction of the supervisory levy will ensure that AUSTRAC can continue to provide a regulatory environment that maintains community confidence in financial flows and minimises risks to business of exploitation for money laundering or terrorism financing.63 The introduction of a levy will ensure these activities are given the funding priority they deserve.

2.61 On introducing the bills, the minister explained that regulation of businesses by AUSTRAC is necessary as:

...businesses regulated by AUSTRAC can facilitate financial flows that provide opportunities for others to disguise the true origin or eventual use

63 CPA Australia, Submission 5, p. 2.

64 Australian Transaction Reports and Analysis Centre Supervisory Cost Recovery Levy Bill 2011, Australian Transaction Reports and Analysis Centre Supervisory Cost Recovery Levy (Collection) Bill 2011, Australian Transaction Reports and Analysis Centre Supervisory Cost Recovery Levy (Consequential Amendments) Bill 2011, Explanatory Memorandum, May 2011, p. 1.

65 The Hon Brendan O'Connor MP, Minister for Home Affairs and Justice, Australian Transaction Reports and Analysis Centre Supervisory Cost Recovery Levy Bill 2011, Second Reading Speech, House of Representatives Hansard, 12 May 2011, p. 7.

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of funds...businesses that operate internationally actually benefit from operating in a jurisdiction [i.e. Australia] that meets international standards for combating money laundering and terrorism financing.66

2.62 The importance therefore of ensuring continued and robust regulation cannot be emphasised enough and although the committee acknowledges the concerns raised by submitters that question the appropriateness of applying cost recovery to AUSTRAC's activities, the committee points out that reporting entities do in fact benefit from being regulated by AUSTRAC. By complying with the requirements of the AML/CTF Act, the risk of an entity being used for money laundering of terrorism financing purposes is reduced.

2.63 The committee takes the view that cost recovery in these circumstances is not only appropriate and accords with the government's guidelines, but also strengthens and improves the integrity of Australia's financial system. The committee emphasises that cost recovery is common among federal regulatory bodies and what is being proposed is consistent with past practice.

2.64 The CR1S Guidelines are a robust gate keeping instrument to ensure cost recovery is applied in a targeted manner and complies with the cost recovery guidelines. In these circumstances, the committee therefore takes the view that requiring the entities that are regulated by AUSTRAC to assist in funding these activities is necessary and appropriate.

2.65 In recognition of the unease shared by those stakeholders that made submissions, the committee does, however, encourage AUSTRAC to commence monitoring the levy in the first year of its operation to ensure the government intent is being met and unintended consequences minimised.

Recommendation 1

2.66 The committee recommends that the Australian Government give further consideration to the concerns raised by stakeholders in relation to how the imposition of a supervisory levy will interact with the tranche two reforms.

Recommendation 2

2.67 In giving further consideration to the issues specified in Recommendation 1, the committee recommends that the Australian Government specifically examine the concerns of larger corporate entities in relation to their reporting obligations under the proposed mandatory enrolment requirements of the AML/CTF regime.

66 The Hon Brendan O'Connor MP, Minister for Home Affairs and Justice, Australian Transaction Reports and Analysis Centre Supervisory Cost Recovery Levy Bill 2011, Second Reading Speech, House of Representatives Hansard, 12 May 2011, p. 2.

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Recommendation 3

2.68 Notwithstanding Recommendations 1 and 2, the committee recommends that the Senate pass the Australian Transaction Reports and Analysis Centre Supervisory Cost Recovery Levy Bill 2011, the Australian Transaction Reports and Analysis Centre Supervisory Cost Recovery Levy (Collection) Bill 2011, and the Australian Transaction Reports and Analysis Centre Supervisory Cost Recovery Levy (Consequential Amendments) Bill 2011.

Senator Trish Crossin Chair

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ADDITIONAL COMMENTS BY LIBERAL SENATORS

Overview

1.1 Liberal senators support the majority report and the objectives of the Australian Transaction Reports and Analysis Centre Supervisory Cost Recovery Levy Bill 2011, the Australian Transaction Reports and Analysis Centre Supervisory Cost Recovery Levy (Collection) Bill 2011, and the Australian Transaction Reports and Analysis Centre Supervisory Cost Recoveiy Levy (Consequential Amendments) Bill 2011 (the AUSTRAC package of bills).

1.2 Liberal senators recognise the importance of ensuring that AUSTRAC can continue to provide a regulatory environment that maintains community confidence in financial flows and minimises the risks to business of exploitation for money laundering or terrorism financing. The Coalition thus acknowledges the importance of introducing a supervisory levy to enable AUSTRAC to recover the costs of its

supervisory activities.

Concerns

Possible over-collection - le\y methodology

1.3 Liberal senators note the concerns raised by the Scrutiny of Bills Committee in their Alert Digest No. 5 of 2011. In that Digest, the Scrutiny Committee drew attention to the potential for AUSTRAC to over-collect its regulatory costs.1 The potential for this to occur is of particular concern to the Liberal senators. Pending the

advice of the Minister, the Coalition considers that this situation should be closely monitored. Liberal senators take the view that the current safeguard that has been proposed by the government of reviewing the calculation methodology after five years is inadequate; a five year review period is too long.

Recommendation 1

1.4 The Coalition recommends that the operation of the legislation and the levy calculation methodology be reviewed in two years or sooner, depending on industry feedback. Industry feedback should be sought on an ongoing basis following passage of the bills.

1 Scrutiny of Bills Committee, Alert Digest No. 5 of 2011, pp 12-13.

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Recommendation 2

1.5 Given the unknown impact that the introduction of the levy will have on small and micro businesses, Liberal senators recommend that, in that initial review, the government investigate the impact of the legislation on these businesses and in particular, its effects on the costs to them of complying with regulation and red-tape.

Recommendation 3

1.6 Should the initial review suggest that the cost to small and micro businesses outweighs the benefits of regulation, Liberal senators recommend that consideration be given to amending the definition of small business that is to be used (of under five employees) to the definition of small business currently used by the Australian Bureau of Statistics (a business employing less than 20 employees).

Short lead time until implementation - inadequate consultation

1.7 Liberal senators note that the first year in which the levy will be collected is the 2011-12 financial year. Given that the bills are therefore due to commence on 1 July 2011, the Liberal senators are concerned that inadequate consultation and education has preceded the measure.

Recommendation 4

1.8 To address this shortcoming, the Coalition recommends that an urgent education, information and awareness campaign designed to advise those affected entities of their new obligations be rolled out immediately.

1.9 Liberal senators consider that an education, information and awareness campaign should be coupled with a six month moratorium on any late payment fees that would otherwise be payable as a result of passage of the Collection Bill. Such a moratorium would provide an appropriate transitional period during which entities can

enrol and commence paying their levy bills. A moratorium of this nature will be of even more importance if passage of the bills is delayed and the legislation has retrospective application.

Recommendation 5

1.10 A moratorium on any late payment fees should be implemented for six months following passage of the legislation.

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Recommendation 6

1.11 Liberal senators recommend that, subject to the consideration of the issues that have been raised here, as well as those within the majority report, the AUSTRAC package of bills is passed.

Senator Guy Barnett Senator Stephen Parry

Deputy Chair

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APPENDIX 1

SUBMISSIONS RECEIVED

Submitter

Citigroup

Law Council of Australia

CPA Australia

The Institute of Chartered Accountants in Australia

Coles Group Limited

Australian Financial Markets Association

Coles Liquor

Runnings Group Ltd

Coles Express

Target Australia Pty Ltd

Australian National Retailers Association

Australian Transaction Reports and Analysis Centre

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APPENDIX 2

AUSTRALIAN GOVERNMENT COST RECOVERY GUIDELINES - 14 KEY PRINCIPLES

In December 2002 the Australian Government adopted a formal cost recovery policy to improve the consistency, transparency and accountability of Commonwealth cost recovery arrangements and promote the efficient allocation of resources.

The policy applies to all Financial Management and Accountability Act 1997 (FMA Act) agencies and to relevant Commonwealth Authorities and Co?npanies Act 1997 (CAC Act) bodies that have been notified, under sections 28 or 43 of the CAC Act, to apply the cost recovery policy. These entities are collectively referred to as *agencies * for the purposes of these guidelines. The policy applied immediately in respect of new or significantly amended cost recovery arrangements and will be phased in for all existing arrangements over a period not exceeding five years (to 2007-08).

For the purposes of this policy, *cost recovery * broadly encompasses fees and charges related to the provision of government goods and services (including regulation) to the private and other non-government sectors of the economy.

The Australian Government's policy adopts the following key principles:

1. Agencies should set charges to recover all the costs of products or services where it is efficient to do so, with partial cost recovery to apply only where new arrangements are phased in, where there are government endorsed community service obligations, or for explicit government policy purposes.

2. Cost recovery should not be applied where it is not cost effective, where it is inconsistent with government policy objectives or where it would unduly stifle competition or industry innovation.

3. Any charges should reflect the costs of providing the product or service and should generally be imposed on a fee-for-service basis or, where efficient, as a levy.

4. Agencies should ensure that all cost recovery arrangements have clear legal authority for the imposition of charges. 5

5. Costs that are not directly related or integral to the provision of products or services (e.g. some policy and parliamentary servicing functions) should not be recovered. Agencies that undertake regulatory activities should generally include administration costs when determining appropriate charges.

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6. Where possible, cost recovery should be undertaken on an activity (or activity group) basis rather than across the agency as a whole. Cost recovery targets on an agency-wide basis are to be discontinued.

7. Products and services funded through the budget process form an agency *s *basic information product set * and should not be cost recovered. Commercial, additional and incremental products and services that are not funded through the budget process fall outside of an agency *s *basic product set * and may be appropriate to cost recover.

8. Portfolio Ministers should determine the most appropriate consultative mechanisms for their agencies * cost recovery arrangements, where relevant.

9. Cost recovery arrangements will be considered significant ( *significant cost recover}7 arrangements *) depending on both the amount of revenue and the impact on stakeholders. A *significant cost recovery arrangement * is one where:

a. an agency *s total cost recovery receipts equal $5 million or more per annum - in this case every cost recovery arrangement within the agency is considered, prima facie, to be significant, regardless of individual activity totals; or

b. an agency's cost recovery receipts are below $5 million per annum, but stakeholders are likely to be materially affected by the cost recovery initiative; or

c. Ministers have determined the activity to be significant on a case-by-case basis.

10. Agencies with significant cost recovery arrangements should ensure that they undertake appropriate stakeholder consultation, including with relevant departments.

11. All agencies with significant cost recovery arrangements will need to prepare Cost Recovery Impact Statements (CRIS). A CRIS will not be required where a Regulation Impact Statement (RIS) that also addresses cost recovery arrangements against these guidelines has been prepared.

a. The chief executive, secretary or board must certify that the CRIS complies with the policy and provide a copy to the Department of Finance and Administration.

b. Agencies must include a summary of the CRIS in their portfolio budget submissions and statements. 12

12. Agencies are to review all significant cost recovery arrangements periodically, but no less frequently than every five years.

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13. Agencies will need to separately identify all cost recovery revenues in notes to financial statements - to be published in portfolio budget statements and annual reports consistent with the Finance Minister *s Orders.

14. Portfolio Ministers are responsible for ensuring that the cost recovery arrangements of agencies within their portfolios comply with the policy and will report on implementation and compliance in portfolio budget submissions.

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-H, AUSTRALIA, A-

THE SENATE

LEGAL AND CONSTITUTIONAL AFFAIRS LEGISLATION COMMITTEE

19 May 2011

Senator the Hon John Hogg President of the Senate

INQUIRY INTO THE PROVISIONS OF THE CHILD SUPPORT (REGISTRATION AND COLLECTION) AMENDMENT BILL 2011

REPORT

Pursuant to Senate Standing Order 38(7), I present to you the report of the Senate Legal and Constitutional Affairs Legislation Committee in relation to the provisions of the Child Support (Registration and Collection) Amendment Bill 2011. The Senate referred this bill to the committee on 12 May 2011, for inquiry and report by 7 July 2011.

The committee has considered the provisions of the bill and, by unanimous decision, has determined that there are no substantive matters that require examination.

The committee reports accordingly,

Senator Trish Crossin Chair

PO Box 6100, Parliament House Canberra ACT 2600 Tel: (02) 6277 3560 Fax: (02) 6277 5794 Email: legcon.sen(5>aph.gov.au Internet: http://www.aph.gov.au/senate

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The Senate

Legal and Constitutional Affairs

Legislation Committee

Civil Dispute Resolution Bill 2010 [Provisions]

December 2010

Â© Commonwealth of Australia

ISBN: 978-1-74229-401-8

This document was printed by the Senate Printing Unit, Department of the Senate, Parliament House, Canberra.

MEMBERS OF THE COMMITTEE

Members

Senator Patricia Crossin, Chair, ALP, NT

Senator Guy Barnett, Deputy Chair, LP, TAS

Senator Mark Fumer, ALP, QLD

Senator Scott Ludlam, AG, WA

Senator Stephen Parry, LP, TAS

Senator Louise Pratt, ALP, WA

Secretariat

Ms Julie Dennett

Ms Christine McDonald

Mr Owen Griffiths

Ms Kyriaki Mechanicos

Mr Hugh Griffin

Ms Kate Middleton

Committee Secretary

Inquiry Secretaiy

Principal Research Officer

Senior Research Officer

Administrative Officer

Suite S1.61 Telephone: (02) 6277 3560

Parliament House Fax: (02) 6277 5794

CANBERRA ACT 2600 Email: legcon.sen@aph.gov.au

iii

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Table of Contents

MEMBERS OF THE COMMITTEE ................................................................... in

ABBREVIATIONS...................................................................................................vii

RECOMMENDATIONS .......................................................................................... ix

Chapter 1.......................................................................................

Introduction................................................................................ .

Purpose of the Bill....................................................................

Conduct of the inquiry..............................................................

Acknowledgement................................................................... .

Scope of the report....................................................................

Note on references....................................................................

Chapter 2 .......................................................................................

Overview of the Bill ................................................................... .

Meaning of'genuine steps'......................................................

Obligation to take 'genuine steps' ............. ..............................

Powers of the court...................................................................

Categories of proceedings excluded from the Bill's operation

Rules of Court and Regulations...............................................

Chapter 3

Key issues..........................................

Introduction ..................................

The 'genuine steps' obligation .......

'Genuine' versus 'reasonable' steps

Exemptions...................................

Disclosure of information .............

..1

..2

..3

..5

..7

..8

,.8

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Impact on disadvantaged groups ............................... 23

Consultation............................................................................................................ 25

Conclusions.............................................................................................................26

ADDITIONAL COMMENTS BY LIBERAL SENATORS ........................... 29

APPENDIX 1...............................................................................................................31

SUBMISSIONS RECEIVED...................................................................................31

Additional information received.............................................................................31

APPENDIX 2 ...............................................................................................................33

WITNESSES WHO APPEARED BEFORE THE COMMITTEE ................... 33

APPENDIX 3 ...............................................................................................................35

LIST OF ADDITIONAL EXCEPTIONS PROPOSED BY THE FEDERAL COURT..................................................................................35

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ABBREVIATIONS

ADR Alternative dispute resolution

EM Explanatory Memorandum

Federal CourtFederal Court of Australia

HPLC PILCH Homeless Persons' Legal Clinic

HRLRC Human Rights Law Resource Centre

Law Council Law Council of Australia

NADRACNational Alternative Dispute Resolution Advisoiy Council

Vll

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RECOMMENDATIONS

Recommendation 1

1.61 The committee recommends that the Bill be amended to provide for an inclusive definition of the word *genuine * to better reflect the intention of the National Alternative Dispute Resolution Advisory Council report.

Recommendation 2

1.64 The committee recommends that the Bill be amended so that the court, when taking into consideration the genuine steps that have been taken by a person when it is exercising its powers or performing its functions, also takes into account the circumstances of disadvantaged litigants.

Recommendation 3

1.66 The committee recommends that the Bill be amended so that information disclosed during the genuine steps obligation cannot be used for any other purpose outside the resolution of the dispute at hand.

Recommendation 4

1.68 The committee recommends that, subject to the recommendations in relation to the definition of the word 'genuine', the consideration of position of disadvantaged litigants and the protection of the privacy of documents, the Senate pass the Bill.

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Chapter 1

Introduction

1.1 On 23 June 2010, the Senate referred the provisions of the Civil Dispute Resolution Bill 2010 (the Bill) to the Legal and Constitutional Affairs Legislation Committee (the committee) for inquiry and report by 30 July 2010. On 23 July 2010 the committee tabled a short report which stated that as a result of the prorogation of Parliament, the committee had resolved not to continue the inquiry into the Bill and noted that if the Bill were reintroduced in the new Parliament, the Senate could again refer it to the committee for inquiry.

1.2 The Bill was reintroduced into the House of Representatives on

30 September 2010 by the Attorney-General, the Hon. Robert McClelland MP. The Senate again referred the provisions of the Bill to the committee on

30 September 2010 for inquiry and report by 22 November 2010. The reporting date was subsequently extended to 2 December 2010.

Purpose of the Bill

1.3 The object of the Bill is to ensure that, as far as possible, people take *genuine steps' to resolve disputes before certain civil proceedings are instituted in the Federal Court of Australia (Federal Court) or the Federal Magistrates Court.1 The overall aims of the Bill, as noted in the Explanatory Memorandum (EM), are:

" to change the adversarial culture often associated with disputes;

" to focus on resolution before parties become entrenched in litigation; and

" to ensure that, where disputes proceed to court, the issues are properly identified, ultimately reducing the time required for the court to determine the matter.2 3

1.4 The EM states that the Bill 'draws on' recommendations of the National Alternative Dispute Resolution Advisory Council (NADRAC) in its report, Tlte Resolve to Resolve: Embracing ADR to Improve Access to Justice in the Federal Jurisdiction.1 * The Attorney-General's second reading speech also indicated that the

1 Clause 3 of the Bill. Some provisions of the Bill qualify this objective: see subclause 6(2) and clauses 15-17 of the Bill.

2 EM, p. 4,

3 EM, p. 2. Also see National Alternative Dispute Resolution Advisory Council, The Resolve to Resolve: Embracing ADR to Improve Access to Justice in the Federal Jurisdiction, September 2009.

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Bill is an initiative formulated in accordance with the strategic framework for access to justice announced by the Australian Government in September 2009.4

Conduct of the inquiry

1.5 The committee advertised the inquiry in The Australian newspaper. Details of the inquiry, the Bill and associated documents were placed on the committee's website. The committee also wrote to 35 organisations and individuals, as well as the Commonwealth and state and territory governments, inviting submissions by 27 October 2010.

1.6 The committee received 11 submissions which are listed at Appendix 1. Submissions were placed on the committee's website for ease of access by the public.

1.7 The committee held public hearings in Melbourne on 4 November 2010 and Canberra on 11 November 2010. A list of witnesses who appeared at the hearing is at Appendix 2, and copies of the Hansard transcript are available through the internet at http://www.aph.gov.au/hansard.

Acknowledgement

1.8 The committee thanks those organisations and individuals who made submissions and gave evidence at the public hearings.

Scope of the report

1.9 Chapter 2 provides a brief outline of the key provisions of the Bill, and Chapter 3 discusses the key issues raised in submissions and evidence.

Note on references

1.10 References in this report are to individual submissions as received by the committee, not to a bound volume. References to the committee Hansard are to the proof Hansard: page numbers may vary between the proof and the official Hansard transcript.

4 The Hon. Robert McClelland MP, Attorney-General, House Hansard, 16 June 2010, p. 5476. Also see Access to Justice Taskforce, Attorney-General's Department, A Strategic Framework for Access to Justice in the Federal Civil Justice System, September 2009.

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Chapter 2

Overview of the Bill

2.1 This chapter provides a brief overview of the purpose and key provisions of the Bill. The key provisions of the Bill include:

" examples of steps that could be taken by a person as part of 'genuine steps' to resolve a dispute with another person;

Â´ the obligation to take 'genuine steps' to resolve certain civil disputes before proceedings are instituted in the Federal Court or the Federal Magistrates Court;

" the powers of the court;

" categories of proceedings excluded from the Bill's operation; and

" rules of court under the Federal Court of Australia Act 1976 and the Federal Magistrates Act 1999.

Meaning of 'genuine steps'

2.2 A key component of the Bill is the concept of 'genuine steps': parties are, as far as possible, to take 'genuine steps' to resolve a civil dispute before proceedings are commenced in the Federal Court or the Federal Magistrates Court. The formulation 'genuine steps' was recommended by National Alternative Dispute Resolution Advisory Council (NADRAC) in preference to formulations of 'genuine effort' and 'good faith'. The Explanatory Memorandum (EM) states that the latter concepts were seen as more subjective and 'may undermine the confidentiality of ADR processes, and, in situations where there is a power or financial imbalance, could lead to injustice by causing some parties to feel they have to make concessions'.1

2.3 The Bill does not prescribe specific steps which must be undertaken. The aim is to provide flexibility so that parties may 'turn their minds to what they can do to attempt to resolve the dispute'.2

2.4 Clause 4 provides a loose definition of 'genuine steps' by way of some examples of what could constitute a 'genuine step' which include:

" notifying the other person of the issues that are, or may be, in dispute, and offering to discuss them, with a view to resolving the dispute;

" responding appropriately to any such notification;

1 EM, p. 4.

2 EM, p. 5.

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" providing relevant information and documents to the other person to enable the other person to understand the issues involved and how the dispute could be resolved;

" considering whether the dispute could be resolved by a process

facilitated by another person, including an alternative dispute resolution (ADR) process;

" if such a process is agreed to:

" agreeing on a particular person to facilitate the process; and

" attending the process;

" if such a process is conducted but does not result in resolution of the dispute, considering a different process; and

" attempting to negotiate with the other person, with a view to resolving some or all the issues in dispute, or authorising a representative to do so.3

2.5 The non-exclusive list allows for other steps to be undertaken as 'genuine steps' and does not prescribe when or how 'genuine steps' must be taken (other than before proceedings are instituted). However, the EM (and clause 4) specifically identifies ADR as a 'genuine step', leading to the conclusion that ADR is a key component of the proposed legislation. The EM states that:

The benefits of ADR include a less adversarial process, early resolution of disputes and identification of issues, ownership of the outcomes for parties, flexible remedies and proportional cost where early resolution is achieved.4

2.6 ADR is an umbrella term for processes, other than judicial determination, in which an impartial person assists those in a dispute to resolve the issues between them or to narrow the issues in dispute. The EM provides an explanation of several ADR processes available to persons in dispute, including:

Mediation: the participants identify the issues in dispute, develop options,

consider alternatives, and endeavour to reach an agreement with the assistance of a mediator. The mediator has no determinative role, but may advise on the process of mediation.

C onciliation: the participants identify the issues in dispute, develop options, consider alternatives, and endeavour to reach an agreement with the assistance of a conciliator (who may have professional expertise in the subject matter). A conciliator advises on the matters in dispute and options for resolution, but does not make a determination.

EM , pp 5-6.

EM , p. 5.

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Expert appraisal: an appraiser, chosen on the basis of their expert

knowledge, investigates the dispute and provides advice on the facts, desirable outcomes, and the means by which these may be achieved.

Early neutral evaluation: the participants present arguments and evidence

to a dispute resolution practitioner who makes a determination on the key issues in dispute and most effective means of resolving the dispute, without determining the facts of the dispute.

Arbitration: arbitration is used where parties have agreed on that method to resolve their dispute. The participants, together with the arbitrator, agree upon the procedures to be used. These are usually more flexible than court proceedings. Participants present arguments and evidence to an arbitrator who makes a determination.5

2.7 According to the EM, the Bill's flexible approach to the definition of'genuine steps' enables parties to focus their attention on resolution of the dispute and identification of the central issues without incurring 'unnecessary upfront costs'.6

Obligation to take 'genuine steps'

2.8 Clause 6 will require an applicant who institutes civil proceedings in the Federal Court or the Federal Magistrates Court to concurrently file a genuine steps statement, specifying:

" the steps that have been taken to try to resolve the issues in dispute; or

" the reasons why no such steps have been taken.

2.9 Subclause 6(2) also provides some reasons why genuine steps may not have been taken, for example urgency of the proceedings or because the safety or security of any person or property would have been compromised.

2.10 Clause 7 will require a respondent, who is given a copy of the applicant's genuine steps statement, to file a genuine steps statement in response before the hearing date specified in the application:

" stating whether the respondent agrees with the genuine steps statement filed by the applicant; or

" specifying which parts of the applicant's genuine steps statement the respondent does not agree with and the reasons why that is the case.

2.11 Under clause 9, a lawyer must advise his or her client of the requirement to file a 'genuine steps' statement and to 'assist the client to comply with the requirement'. The EM states that this duty is important to ensure that parties and their lawyers focus

EM , p. 7.

EM , p. 5.

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on the real issues in dispute and attempt to resolve them as quickly and efficiently as possible.7

2.12 The EM notes that similar provisions in relation to the duties of lawyers to advise clients are currently provided in the Federal Court of Australia Act 1976 (Federal Court Act) (subsection 37N(2)) and the Federal Magistrates Act 1999 (Federal Magistrates Act) (section 24).

2.13 Subclause 10(1) notes that the requirements in Part 2 of the Bill (the obligation to take genuine steps) are in addition to requirements imposed by any other Act, and not instead of those requirements. In addition, subclause 10(2) provides that proceedings are not invalidated by the failure of a person to file a genuine steps statement. It is noted in the EM that this provision ensures that Part 2 operates to enhance prospects for an early resolution of a matter outside of court without imposing a barrier to justice which would disproportionately affect people without access to legal advice or resources. The EM further states that:

If a party fails to provide a genuine steps statement, the court can consider this in the context of its case management of the matter. This is appropriate and avoids satellite litigation about the validity of the proceeding on the basis of whether genuine steps were or were not taken or the sufficiency of those steps. These matters will not become substantial disputes in their own right.8

2.14 The EM states that the obligation to take genuine steps is intended to promote resolution and encourage a move away from an adversarial approach to litigation:

Prospective parties will know that steps they took or did not take will be put before the court if action is ultimately commenced. Importantly, the court will be in a better position to manage the matter using existing case management powers.9

2.15 According to both the EM and the Attorney-General, the Bill does not force parties to abandon legal claims or settle a dispute. Further, the conduct of pre-action steps and the confidentiality of discussions, negotiations or ADR would not be an issue since the requirement to provide a 'genuine steps' statement does not require or

authorise parties to seek to adduce evidence of confidential negotiations. In this context it should be noted that the confidentiality of ADR processes and admissibility of communications was of particular concern to NADRAC in its report.10

7 EM.p. 10.

8 *Ã¯*Ãº,*Â¡. 11.

9 EM, p. 8.

10 EM, p. 8.

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Powers of the court

2.16 Clause 11 provides that the court may, in performing functions or exercising powers in relation to civil proceedings, take into account:

" whether a person who was required to file a 'genuine steps' statement filed such a statement; and

" whether such a person took 'genuine steps' to resolve the dispute.

2.17 The EM notes that the genuine steps statement provides the court with more information about the steps which have been taken by the parties. This allows the court to utilise its existing case management powers where appropriate and its powers of summary dismissal.11

2.18 Where the court is not satisfied that 'genuine steps' have been taken, the court may make orders including:

" referring the dispute or parts of the dispute to mediation, arbitration, or other ADR processes that have not already been undertaken by the parties (with consent where required);

" nominating an ADR practitioner where parties cannot agree on an ADR practitioner;

" setting time limits for the doing of anything or the completion of any part of the proceeding;

" dismissing the proceeding in whole or in part;

" striking out, amending or limiting any part of a party's claim or defence;

" disallowing or rejecting any evidence; and

" ordering a party to produce to it a document in the possession, custody or control of the party.12

2.19 Clause 12 provides that the court, judge, federal magistrate or any other person exercising discretion to award costs in a civil proceeding in the Federal Court or the Federal Magistrates Court may take into account any failure to comply with the obligation to take genuine steps.

2.20 In making an adverse costs order, a lawyer's failure to comply with the obligation under clause 9 may be taken into account (subclause 12(2)), including the imposition of a personal costs order which is not recoverable from the lawyer's client through, for example, contracts about the payment of their fees (subclause 12(3)). According to the EM, the intention of clause 12 is to bring about a cultural change in

11 EM, p. 11.

12 EM, pp 11-12.

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the conduct of litigation so that parties are focused on resolving disputes as early as possible.13

2.21 Clause 13 of the Bill makes it clear that the powers given to the court

proposed in the Bill are in addition to, and not instead of, its existing powers. Further, the power of the court to consider such matters allows the court to be informed of what steps parties have undertaken. Clause 14 provides that confidential settlement negotiations under section 131 of the Evidence Act 1995 are not permitted to be disclosed and the settlement privilege continues to apply.

Categories of proceedings excluded from the Bill's operation

2.22 The Bill applies to all civil law matters in the Federal Court or the Federal Magistrates Court but allows for particular exclusions, which are contained in Part 4 of the Bill.

2.23 Clause 15 excludes certain kinds of proceedings from the operation of the Bill in cases where undertaking 'genuine steps' is either not practicable or appropriate. This includes:

" proceedings brought by or on behalf of the Commonwealth or a

Commonwealth authority for an order connected with a criminal offence or the possible commission of a criminal offence; or a contravention or possible contravention of a civil penalty provision;

" proceedings that relate to a decision of, or a decision that has been

subject to review by certain bodies including the Administrative Appeals Tribunal, Migration Review Tribunal and Veterans' Review Board;

" ex parte proceedings; and

" proceedings to enforce an enforceable undertaking.

2.24 Clause 16 excludes proceedings under certain Acts, for example, the Family Law Act 1975; Fair Work Act 2009; Native Title Act 1993 (which have existing dispute resolution methods); Australian Citizenship Act 2007; and Migration Act 1958 (in which the requirement to file a 'genuine steps' statement is not appropriate because

it is not possible to negotiate to give an applicant a visa if they do not meet certain prescribed criteria).

Rules of Court and Regulations

2.25 Clause 18 enables rules of court made under the Federal Court Act or the Federal Magistrates Act to make provision for:

" the form of 'genuine steps' statements;

" the matters that are to be specified in 'genuine steps' statements; and

13 EM , p. 12.

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2.26

" time limits relating to the provision of copies of 'genuine steps'

statements.

Clause 19 enables regulations to be made in relation to the Bill.

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Chapter 3

Key issues

Introduction

3.1 There was general support in evidence for the intent of the Bill with

recognition of the importance of mechanisms, including alternative dispute resolution (ADR), which assist with the resolution of matters before they proceed to court or provide a means to clarify and narrow issues in dispute. Resolving disputes or clarifying issues reduces costs and delays for all parties.1

3.2 Professor Tania Sourdin commented that the Bill (as well as the Victorian Civil Procedure Act 2010) is part of the shift in how justice, the courts and ADR are perceived and is based on the view that 'justice and effective dispute resolution can be achieved and can occur outside the court system'. It also reflects the maturity and success of existing pre litigation schemes and alternative dispute resolution and 'an eagerness to embrace more developed pre litigation arrangements'.2 Professor Sourdin went on to state:

The draft legislation, drawing on the success of the extensive industry based and other pre litigation ADR schemes adopts this more modern approach to dispute resolution and assumes that the Court is not at the centre of dispute resolution. Rather the Court has an integral and pivotal role in policing obligations and adjudicating, managing and resolving the more intractable disputes.3

3.3 However, some witnesses were of the view that there are significant issues raised by the Bill including the mandatory nature of the genuine steps obligation, the use of the term 'genuine steps' rather than 'reasonable steps', the exemption provisions and the potential impact on disadvantaged litigants and access to justice. For example,

Mr Ben Schokman, Human Rights Law Resource Centre, stated:

...an efficient and cost-effective civil justice system is certainly a very legitimate and important aim, but that needs to be counterbalanced with the fundamental rights of access to justice and the right to a fair hearing.4

1 See for example, National Legal Aid, Submission 5, p. 2; Ms Lucie O'Brien, Federation of Community Legal Centres, Committee Hansard, 4 November 2010, p. 2; Mr John Emmerig, Law Council of Australia, Committee Hansard, 11 November 2010, p. 8.

2 Professor Tania Sourdin, Submission 1, p. 9.

3 Professor Tania Sourdin, Submission 1, p. 11.

4 Mr Ben Schokman, Human Rights Law Resource Centre, Committee Hansard, 4 November 2010, p, 6.

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The *genuine steps * obligation

3.4 A major issue raised by some submitters was that the proposed 'genuine steps' obligation imposed mandatory pre-action protocols. For example, the Law Council of Australia (Law Council) submitted that while it supported early resolution of disputes without recourse to the courts if 'used effectively in the right cases', it had reservations about mandatory pre-action protocols for federal jurisdiction.5 The Law Council considered that the use of pre-action protocols in certain cases resulted in more expensive and time-consuming proceedings 'if not done properly, thus resulting in added costs and denial of, or delay in, access to justice'.6 Mr John Emmerig, appearing on behalf of the Law Council, commented 'if you made it mandatory, people could start playing games with what constitutes genuine steps at the front end of the action'.7

3.5 Mr Emmerig also noted that in some cases the proposed genuine steps obligation is unnecessary as 'in major cases there is always some form of engagement before proceedings are filed'. In addition, the application of the genuine steps obligation for class actions or other major proceedings raised uncertainty as to whether the obligation extends to just the representative party or all members of the class.8 Mr Emmerig concluded that:

...the general thrust of the bill is that, to the extent that pre-action

procedures or protocols of the kind proposed here are being proposed for use in civil litigation, we would suggest to you that experience shows that this one-size-fits-all approach does not tend to be an effective way to

proceed.9

3.6 The Federal Court of Australia (Federal Court) submitted that the proposed protocols are not suitable for much of its work, 'well beyond that excluded by clauses 15 and 16'. Further:

The Court's experience is that ADR is most effective when used in

conjunction with active case management at a time when the parties are in an informed position to properly assess their risk. When that point arises varies from case to case depending on numerous facts and matters including subject matter of the proceedings, the nature and complexity of the issues in dispute and relative strengths of the parties.10

5 Law Council of Australia, Submission 6, p. 8; see also Mr John Emmerig, Law Council of Australia, Committee Hansard, 11 November 2010, p. 8.

6 Law Council of Australia, Submission 6, p. 8; see also Mr John Emmerig, Law Council of Australia, Committee Hansard, 11 November 2010, p. 8.

7 Mr John Emmerig, Law Council of Australia, Committee Hansard, 11 November 2010, p.l 1.

8 Mr John Emmerig, Law Council of Australia, Committee Hansard, 11 November 2010, pp 10â 11.

9 Mr John Emmerig, Law Council of Australia, Committee Hansard, 11 November 2010, p. 8.

10 Federal Court of Australia, Submission 2, p. 3.

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3.7 Mi' Soden, Registrar and Chief Executive Officer, Federal Court, noted that the United Kingdom Costs Review conducted by Lord Justice Jackson (Jackson Review) found that *a general protocol for all civil litigation served no useful purpose because one size does not fit all'.11 The Federal Court went on to provide a list of

actions which it recommended be excluded from the pre-action protocol (exemptions are discussed further at paragraphs 3.38-3.44 below).

3.8 The National Alternative Dispute Resolution Advisory Council (NADRAC) and the Attorney-General's Department (the Department) responded to this evidence. NADRAC noted that it did not recommend the introduction of mandatory ADR in its 2009 Report and the Bill does not introduce mandatory ADR. Further, ADR is simply

an example of one of the steps a party may choose to undertake and 'what amounts to a "genuine step" is not defined, and is up to the parties to determine within the context of their particular dispute'.12

3.9 In relation to concerns about pre-action protocols, the Department commented that the Bill 'is not a pre-action protocol, nor does it mandate ADR, or indeed, any particular steps'. While the Bill requires that parties inform the court about the steps they have taken to resolve the dispute, or if they have not taken steps, failure to lodge a genuine steps statement does not invalidate an application. Parties will be able to take steps which meet the needs of their particular circumstances as the steps contained in the Bill are examples only, not mandatory, and the Bill does not limit what steps a party may consider. The Bill also allows for circumstances where no genuine steps are possible or appropriate.13

3.10 The Department also emphasised strongly drat the purpose of the Bill is to allow for flexibility about what steps, if any, may be taken to accommodate the needs of parties and issues involved in a particular dispute. The Department went on to state:

By allowing parties to determine the most appropriate action to take in their particular case, the Bill directly contrasts with prescriptive mandatory preâ action protocols.14

3.11 The Department noted that the Bill contrasts with the prescriptive general preâ action protocols applying in the UK which were the subject of criticism in the Jackson Review. Mr Matthew Minogue, Attorney-General's Department, stated that 'the proposal that was recommended to government sought to address the concerns that had been raised and the UK experience with prescriptive pre-action protocols'.15

11 Mr Warwick Soden, Federal Court of Australia, Committee Hansard, 11 November 2010, p. 2.

12 National Alternative Dispute Resolution Advisory Council, Submission 10, pp 1-2.

13 Attorney-General's Department, Submission 11, p. 2; see also Mr Matthew Minogue, Attorney- General's Department, Committee Hansard, 11 November 2010, p. 21.

14 Attorney-General's Department, Submission 11, p. 1.

15 Mr Matthew Minogue, Attorney-General's Department, Committee Hansard, 11 November 2010, p. 15.

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3.12 Mr Minogue went on to comment that 'a fair reading of the bill will quickly allay concerns because it is not prescriptive; it is illustrative'.16 Further, this was 'quite a deliberate policy choice':

Because the experience from the UK and from stakeholders like the Federal Court and the Law Council is that prescribing specific steps does not work. It is actually counterproductive. It is far better to leave it to the parties themselves to attempt to resolve their disputes and so the parties themselves can undertake the steps that they deem appropriate to attempt to resolve their dispute. Where the discipline, if you like, comes into it, is where a

matter is filed, if a matter is filed.17

3.13 It was pointed out that 'the bill does not prevent and does not seek to prevent people from accessing a court'.18 However, the government wanted the Bill to have effect and Mr Minogue stated:

We want people to actually undertake genuine steps. But the obligation on them is to file a statement. The reason why it is separated, and the saving is in clause 10 [failure to file a statement does not invalidate proceedings] is that it is a preservation, it is a non-invalidity provision. We do not want people to escape the obligation but what we do say is we do not want this to become a barrier to people accessing courts or pursuing litigation.19

3.14 Mr Minogue also pointed to the benefits of the 'genuine steps' obligation: that it has the effect of turning people's minds to resolution prior to filing. If a matter goes to court, the genuine steps obligation will result in the provision of information that will be of benefit to both the parties and the court in the later case management

function, or may result in a narrowing of the issues in dispute.20 The Attorney- General's Department also noted that the Bill is a continuum of the court's existing powers in relation to case management.21

3.15 Other submitters also supported the Bill's flexible approach to achieving dispute resolution. The Castan Centre for Human Rights Law stated that the Bill 'is merely directing parties to take steps to narrow issues and to endeavour resolution of

16 Attorney-General's Department, Submission 11, p. 2; see also Mr Matthew Minogue, Attorney- General's Department, Committee Hansard, 11 November 2010, p. 15.

17 Mr Matthew Minogue, Attorney-General's Department, Committee Hansard, 11 November 2010, p. 22.

18 Mr Matthew Minogue, Attorney-General's Department, Committee Hansard, 11 November 2010, p. 17.

19 Mr Matthew Minogue, Attorney-General's Department, Committee Hansard, 11 November 2010, p. 16.

20 Mr Matthew Minogue, Attorney-General's Department, Committee Hansard, 11 November 2010, p. 17.

21 Mr Matthew Minogue, Attorney-General's Department, Committee Hansard, 11 November 2010, p. 16.

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disputes prior to resorting to litigation'.22 National Legal Aid saw the obligation to take genuine steps as 'appropriate' and commented that it has 'the potential to improve the early resolution of disputes'.23 The view was supported by the NSW Department of Justice and Attorney General which commented that the measures 'will promote the early resolution of disputes and the narrowing of issues in dispute prior to commencement of proceedings'.24

Costs and delays

3.16 The issues of costs and delays and the impact on access to justice were also taken up by submitters. It was argued that costs and delays may occur because of satellite litigation, interlocutory litigation and disputes as to whether genuine steps

have actually been taken. The Law Council also commented the costs may increase, resulting in 'undesired outcomes'.25

3.17 The Federal Court commented that 'there is the very real likelihood that a legislated genuine steps requirement will increase the cost and time of litigation, contrary to the overarching puipose set out in the Federal Court of Australia Act 1976. Increases in costs would arise from the preparation and filing of additional statements and 'risk being subject to the cost and delay of interlocutory disputes under clause 11 of the Bill that have no bearing on the substantive issues in the litigation'.26

3.18 Mr Soden, Federal Court, also voiced concern about complex cases and the case of querulous litigants. Mr Soden considered that the genuine steps obligation would be 'extremely difficult in the complex cases, and I imagine that the genuine

steps statement could be quite detailed, quite complex, quite long and possibly quite expensive'.27 In relation to querulous litigants, it was submitted that they will focus on a problem with the genuine steps and thereby add to costs and delays. Mr Soden stated that unrepresented querulous litigants:

...are not going to be deterred by the risk of adverse costs orders made in relation to those proceedings. It is our experience that they are unlikely to be in a position to be able to pay those costs, so the burden of that problem will fall to a respondent.28

3.19 In response to these concerns, NADRAC submitted that it has 'carefully considered' concerns about increased costs and it had proposed the genuine steps

22 Castan Centre for Human Rights Law, Submission 4, p. 10.

23 National Legal Aid, Submission 5, p. 2.

24 NSW Department of Justice and Attorney General, Submission 9, p. 4.

25 Mi" John Emmerig, Law Council of Australia, Committee Hansard, 11 November 2010, p.l 1.

26 Federal Court of Australia, Submission 2, pp 2-3; see also Mr Warwick Soden, Federal Court of Australia, Committee Hansard, 11 November 2010, p. 3.

27 Mr Warwick Soden, Federal Court of Australia, Committee Hansard, 11 November 2010, p. 6.

28 Mr Warwick Soden, Federal Court of Australia, Committee Hansard, 11 November 2010, p. 2.

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requirement 'as a flexible, alternative approach to mandatory ADR, that should not incur significant extra costs for parties'.29 Further, NADRAC stated that:

To the extent that additional costs are incurred, they are at the discretion of the parties and would therefore be proportionate to the dispute, and should be reasonable in the circumstances. By narrowing the issues in dispute through a genuine steps process, there should be a reduction in the cost of litigation, and increased efficiency in the disposition of matters by courts. 30

3.20 In relation to possible delays, NADRAC submitted that the measures it recommended 'were to help change the adversarial culture and encourage prospective litigants to turn their minds to resolution before commencing legal proceedings'. In addition, resolving disputes through the genuine steps process will avoid unnecessary litigation and shorten the course of disputes.31

3.21 The Department also responded to concerns about costs and delays. It emphasised that the Bill allows for the parties to determine the genuine steps that they will take. In addition, as noted by NADRAC, even when a matter is not resolved through the genuine steps process, benefits will arise as matters in dispute will be clarified or narrowed thus saving time and decreasing costs when the matter is considered by the court.32

3.22 The Department commented on the specific matters raised. The Department noted that the Bill is designed to minimise the risk of satellite litigation: while a genuine steps statement must be filed, failure to do so does not invalidate proceedings. A failure to take genuine steps does not create rights in the other party and parties cannot litigate whether genuine steps were taken or sufficiently taken.33 This, it was

argued, 'addresses the satellite litigation concern, because all of the issues about the adequacy or otherwise of a statement, or the adequacy or otherwise of the genuine steps that may or may not have been taken, will be exercised by the court's existing case management powers'.34

3.23 In relation to class actions, Mr Minogue commented that 'it would be perfectly permissible and appropriate for the court to say that the lead plaintiff, the one who commences the application, should make the substantive genuine steps statement'.35

As to complex litigation, Mr Minogue responded:

29 National Alternative Dispute Resolution Advisory Council, Submission 10, p. 2.

30 National Alternative Dispute Resolution Advisory Council, Submission 10, p. 2.

31 National Alternative Dispute Resolution Advisory Council, Submission 10, p. 2.

32 Attorney-General's Department, Submission 11, p. 2.

33 Attorney-General's Department, Submission 11, p. 3.

34 Mr Matthew Minogue, Attorney-General's Department, Committee Hansard, 11 November 2010, p. 16; see also Attorney-General's Department, Submission 11, p. 3.

35 Mr Matthew Minogue, Attorney-General's Department, Committee Hansard, 11 November 2010, p. 23.

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Complex litigation that is not a class action is the very situation where it encourages people to attempt to resolve the dispute or narrow the issues, and that is precisely what the bill is encouraging people to do. It is not just the bill saying this or NADRAC saying this. Litigators say this, law reform commissioners say this, chief justices say this. It is not an unusual or difficult proposition.36

3.24 It was also noted that the provisions of clause 18 of the Bill allow the court to take account of a number of matters in relation to genuine steps statements. Thus the Department argued that:

That is an empowering provision that gives the court, in my submission, exactly what it is concerned about. If people are concerned about costs, the court could say: pages should be no more than two pages long; statements should be no more than two pages long. If they are concerned about a

particular jurisdiction, they can particularise that as required for a specific protocol. The concerns, in my submission, are addressed in the bill.37

3.25 The benefits of the genuine steps obligation were also supported by the Castan Centre for Human Rights Law which commented that it saw as unlikely significant costs and delay flowing from the broad, non-prescriptive provisions of the Bill.38 The Centre concluded:

If the reforms have the effect of easing the courts' caseload, then they may facilitate the more timely access to courts for contests incapable of resolution outside the judicial process. Litigation may also be simplified and shortened by the narrowing of issues afforded by pre-litigation steps. Such benefits would in fact enhance the right of access to court

proceedings.39

Federal Court alternative approach

3.26 The Federal Court submitted what it saw as a simpler and less expensive approach to that proposed in the Bill, for consideration by the committee. This approach involves the enactment of legislation requiring a person contemplating litigation to serve on the prospective respondent a short statement of their case which provides adequate description of the factual, and legal claim, and which could stand as

their statement of case in any subsequent litigation. The Federal Court noted that, if that step were taken, the court would be given jurisdiction over any ADR of that

36 Miâ Matthew Minogue, Attorney-General's Department, Committee Hansard, 11 November 2010, p. 23.

37 Mr Matthew Minogue, Attorney-General's Department, Committee Hansard, 11 November 2010, p. 20.

38 Castan Centre for Human Rights Law, Submission 4, p. 9.

39 Castan Centre for Human Rights Law, Submission 4, p. 21.

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'matter' and the parties would be able to access the court-annexed mediation conducted by the registrars in the Federal Court.40

3.27 The Federal Court saw benefits in this approach as the costs of court-annexed mediators is substantially less than external mediators; and court-annexed mediators also have access to the Federal Court's case management powers including powers to order alternative and appropriate forms of ADR and the ability to refer matters to a judge to resolve issues if and when they arise.41 Mr Soden commented:

Our experience is that if we get hold of a matter early and case manage it under our case management provisions, and a matter is referred to ADR as a result of that process, often it will settle. If it does not settle, the issues are refined and the case goes on to hearing in a much more truncated version

than if it is not touched.42

3.28 The committee sought comments from the Law Council in relation to the Federal Court's proposal. The Law Council indicated that, in the time available and on the information available, it was unable to provide a concluded point of view on the proposal. However, the Law Council did support the principle behind the proposal and it recommended that it be given further consideration, and be the subject of proper consultation, by and between the Attorney-General's Department, Federal Court, Law Council and other stakeholders.43

3.29 The Department also commented on the Federal Court's proposal and stated:

Any attempt to simplify pleadings deserves consideration, and while the alternative has a complementary objective to the Bill, the Department does not believe that the Court's proposal is a substitute for it. The Bill is

intended to encourage a greater focus on resolution before parties contemplate litigation. The Federal Court *s proposed alternative approach is to apply to parties already contemplating litigation.44

*Genuine' versus *reasonable * steps

3.30 The Bill proposes that disputants take 'genuine steps' to resolve disputes before commencing litigation before the Federal Court and the Federal Magistrates Court. There was considerable discussion in submissions about the term 'genuine steps' with some submitters noting that the Victorian legislation uses the term 'reasonable steps' as do proposed amendments to existing NSW legislation.45

40 Federal Court of Australia, Submission 2, pp 4-5.

41 Federal Court of Australia, Submission 2, p. 5.

42 Mr Warwick Soden, Federal Court of Australia, Committee Hansard, 11 November 2010, p. 5.

43 Law Council of Australia, Additional Information, p. 3.

44 Attorney-General's Department, Submission 11, p. 4; see also Mr Matthew Minogue, Attorney- General's Department, Committee Hansard, 11 November 2010, p. 18.

45 NSW Department of Justice and Attorney General, Submission 9, p. 2.

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3.31 A number of submitters argued that the use of the word 'genuine' introduces a degree of subjectivity which the word 'reasonable' does not.46 The NSW Department of Justice and Attorney General, for example, commented that the subjective element

introduced by the term 'genuine' makes the meaning of the provisions less clear and compliance more difficult.47 Mr John Emmerig, Law Council, concurred with this view and commented that '"reasonable" allows one to apply well-established principles of objectivity in the assessment'.48 Ms Tania Penovic, Castan Centre for Human Rights Law, commented:

I do prefer the Victorian formulation of reasonable steps. I think it is broader and it is a more meaningful way of gauging the steps that have been taken. Genuine steps may extend to steps that are genuinely taken by parties but may not fall within the threshold of reasonableness.49

3.32 A number of submitters noted that the concept of reasonableness was well known and permeates many areas of the law.30 51

3.33 However, National Legal Aid agreed with the 'flexible approach the legislation adopts in relation to the definition of "genuine steps", because it recognises that what amounts to "genuine steps" will depend upon the circumstances of the i 51

case.

3.34 Mr Minogue, Attorney-General's Department, responded by noting that the NADRAC report went into the reasons it preferred 'genuine' rather than 'reasonable'.52 In its report, NADRAC commented that it was not aware that the term 'genuine steps' had been used before in the law of civil procedure either in Australia or in other

countries. However, NADRAC stated that it 'considers that it is a phrase that can usefully be given its ordinary meaning in the circumstances of any particular dispute'. NADRAC went on to provide the reasoning for its recommendation of the 'genuine steps' requirement rather than other requirements such as 'genuine effort'. NADRAC

considered that the 'genuine effort' formula, contained in the Family Law Rules, was a

46 See for example, Mr Warwick Soden, Federal Court of Australia, Committee Hansard, 11 November 2010, pp 3^4.

47 NSW Department of Justice and Attorney General, Submission 9, p. 2.

48 Mr John Emmerig, Law Council of Australia, Committee Hansard, 11 November 2010, p. 9.

49 Ms Tania Penovic, Castan Centre for Human Rights Law, Committee Hansard, 4 November 2010, p. 3.

50 Ms Tania Penovic, Castan Centre for Human Rights Law, Committee Hansard, 4 November 2010, p. 3; Mr Ben Schokman, Human Rights Law Resource Centre, Committee Hansard, 4 November 2010, p. 7; NSW Department of Justice and Attorney General, Submission 9, p. 4.

51 National Legal Aid, Submission 5, pp 3^4.

52 Mr Matthew Minogue, Attorney-General's Department, Committee Hansard, 11 November 2010, p. 23.

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much more subjective concept and 'may be misinterpreted as applying a standard of conduct to some ADR processes that is inappropriate'.33

3.35 NADRAC also considered that while it is appropriate to take genuine steps to resolve a dispute, 'it is inappropriate (and probably impermissible) to require a person to make concessions or compromise'. NADRAC was of the view that using mechanisms such as 'genuine effort' or 'good faith' requirements may pressure disputants to make concessions in order to avoid later costs penalties. This may arise

in cases where there is a significant power imbalance; one of the parties is financially disadvantaged; or where a party has a very strong case and is justified in not compromising their position.53 54

3.36 In relation to the concept of 'reasonableness', NADRAC commented:

What is reasonable may depend on the capacity of the disputants, the nature of the dispute, the type of process, the skill demonstrated by the ADR practitioner and particular events on the day.55

3.37 The Department also added:

The term 'genuine' has been used as this was the term favoured by

NADRAC in its report, over 'reasonableness'. Genuine is a more

meaningful term to encourage parties to consider what they can do to attempt to resolve the dispute. Courts have tended to say that reasonable means 'not unreasonable', which risks being a minimal standard. Further, the Department notes that the Family Law Rules have required parties to property and parenting disputes in the Family Court to make a genuine effort to resolve disputes since 2004. The Department is not aware that the use of the term 'genuine' has created any difficulty.56

Exemptions

3.38 Clauses 15 and 16 of the Bill provide for a number of exemptions from the operation of the genuine steps obligation. The list was viewed as narrow by some witnesses.57 The Federation of Community Legal Centres-Victoria, for example,

53 National Alternative Dispute Resolution Advisory Council, The Resolve to Resolve - Embracing ADR to improve access to justice in the Federal jurisdiction , September 2009, p. 31.

54 National Alternative Dispute Resolution Advisory Council, The Resolve to Resolve - Embracing ADR to improve access to justice in the Federal jurisdiction, September 2009, p. 31.

55 National Alternative Dispute Resolution Advisory Council, The Resolve to Resolve - Embracing ADR to improve access to justice in the Federal jurisdiction, September 2009, p. 148.

56 Attorney-General's Department, Submission 11, p. 4.

57 See for example, Ms Tania Penovic, Castan Centre for Human Rights Law, Committee Hansard, 4 November 2010, p. 3;

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submitted that there should be an exemption for public interest litigation, while the Law Council commented on the need to exclude a range of other matters including certain bankruptcy matters, interlocutory injunctions, proceedings where expert opinion is required and multi party civil disputes.58

3.39 The Federal Court also provided the committee with a list of the types of cases that should be excluded from pre-action protocols. The list, reproduced in full at Appendix 3, includes administrative law, admiralty, bankruptcy, taxation, and patents.

Mr Soden commented that they are 'examples of where a genuine steps requirement would be a waste of time and money and not necessary '.59 The Law Council, noting the Federal Court's comments, argued that this 'demonstrates again that a "one-size- fits-all" approach is inappropriate'.60

3.40 The NSW Department of Justice and Attorney General also raised the concern that it may not be clear as to whether a particular application is wholly or partly excluded, leading to disputes in some cases. It was argued that to avoid doubt about whether, and on what basis, a party is claiming exemption from the genuine steps requirements, all applicants (other than those excluded pursuant to clauses 15(c) and

16) be required to file a statement.61

3.41 Some submitters commented that bankruptcy matters should be excluded from the operation of the Bill. The Insolvency Practitioners Association of Australia (IPA) submitted that the matters undertaken by practitioners varied and that some did not lend themselves to pre-litigation alternative dispute resolution. However, IPA was of the view that the flexibility provided by the Bill would accommodate the varied circumstances involving insolvency practitioners. In relation to many court actions by insolvency practitioners, for example, the recovery of moneys or assets, IPA stated that the Bill would provide 'a useful regime' and 'assist practitioners to recover moneys for creditors more cost effectively and efficiently'.62

3.42 In relation to the exclusions in the Bill, the Department noted that extensive consultations had been undertaken and 'exclusions to the Bill were made where significant dispute resolution processes were already developed and further genuine steps would not be of assistance'. The Department considered that the Bill is

sufficiently flexible so as not to require express exclusion of additional matters. In addition, incorporating more exclusions may focus parties on how to fit within an

58 Ms Lucie O'Brien, Federation of Community Legal Centres, Committee Hansard, 4 November 2010, p. 4; Law Council of Australia, Submission 6, pp 17-19.

59 Mr Warwick Soden, Federal Court of Australia, Committee Hansard, 11 November 2010, p. 4.

60 Law Council of Australia, Additional Information, p. 2.

61 NSW Department of Justice and Attorney General, Submission 9, p. 2.

62 Insolvency Practitioners Association of Australia, Submission 8, p. 3.

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exclusion, rather than encouraging consideration of what genuine steps can be taken to seek to resolve the matter.63

3.43 The Department also noted that, if required, additional exclusions can be provided for through the regulation making power.64

3.44 The Attorney-General's Department also provided the committee with a detailed response to the Federal Court list of additional exclusions. This is also reproduced in Appendix 3. The Department stated:

...a significant proportion of the matters included in the classes proposed for exclusion by the Federal Court, are more than 12 or 18 months old. Taking genuine steps for such matters would enable more productive attempts at resolution, which even if unsuccessful, would narrow the issues in dispute and provide better information to the court at the commencement of the litigation, thus reducing the length of any subsequent proceedings.65

Disclosure of information

3.45 A matter raised by the Castan Centre for Human Rights Law and the NSW Department of Justice and Attorney General related to the disclosure of information and documents under subclause 4(1 )(c) which offers, as an example of genuine steps, 'providing relevant information and documents to the other person'.

3.46 The Castan Centre for Human Rights Law argued that there may be an interference with a right to privacy if a disputant felt compelled by the genuine steps obligation to reveal private information. In order to overcome this problem, the Centre recommended that the Bill be amended to include the same limitations on the use of documents for purposes extraneous to the dispute at hand as are extended to litigants in the discovery process.66

3.47 The NSW Department of Justice and Attorney General also supported provisions to protect material disclosed and noted that such an amendment would:

...strengthen the Bill by giving parties confidence to disclose sensitive material relevant to settlement negotiations prior to litigation being commenced. Otherwise parties may choose to commence proceedings which might otherwise have resolved by consent merely in order to ensure

certainty regarding the protected status of sensitive documents.67

63 Attorney-General's Department, Submission 11, p. 3.

64 Attorney-General's Department, Submission 11, p. 3; see also Mr Matthew Minogue, Attorney- General's Department, Committee Hansard, 11 November 2010, p. 19.

65 Attorney-General's Department, Submission 11, p. 4; see also Mr Matthew Minogue, Attorney- General's Department, Committee Hansard, 11 November 2010, pp 18-19.

66 Castan Centre for Human Rights Law, Submission 4, pp 11, 21; see also Ms Tania Penovic, Castan Centre for Human Rights Law, Committee Hansard, 4 November 2010, p. 4.

67 NSW Department of Justice and Attorney General, Submission 9, p. 7.

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3.48 The Law Council raised concerns about the provision of documents relating to major cases. Mr Emmerig commented that it is difficult to compile and present relevant information and documents for a major case and it is unrealistic that the other litigant would commence discussions without accessing this information.68

Impact on disadvantaged groups

3.49 A number of submitters voiced concern that the mechanisms proposed in the Bill may result in disadvantaged litigants being unable to participate in the civil justice system on the same basis as other litigants.69 Ms Lucie O'Brien, Federation of Community Legal Centres-Victoria, submitted that, while being broadly supportive of the Bill, there was a need to ensure that people were not inadvertently disadvantaged. Ms O'Brien commented:

...we think that there are some specific issues faced by low-income and socially disadvantaged people in the context of ADR. ADR works very well for most people, but if you suffer from some kind of disadvantage, most obviously the inability to retain a lawyer or to get free legal

representation *also things like language difficulties, age or a general unfamiliarity with the Australian legal system *you can be disadvantaged by ADR, particularly if you are engaged in a dispute with someone who does not suffer from those disadvantages.70

3.50 Mr Schokman, Human Rights Law Resource Centre (HRLRC), also pointed to potential disadvantage through power imbalances that 'perpetuate why the dispute was brought in the first place and why it has ended up being potentially litigious and

also where there may be individuals who do not understand what legal consequences there might be in disclosing information or conceding particular points'.71 In addition, HPLC (PILCH Homeless Persons' Legal Clinic) and HRLRC commented that the

court's discretion to take into account a party's failure to undertake genuine steps may have a significant impact on litigants who are unable to access or afford legal advice and/or representation during pre-trial negotiations.72

3.51 HPLC and HRLRC concluded that the Bill in its current form 'may have potentially adverse affects for some litigants that undermine the fundamental right to a fair hearing' and made recommendations which they saw as ensuring that the Bill

more adequately upholds the right to a fair hearing. These recommendations included:

68 Mr John Emmerig, Law Council of Australia, Committee Hansard, 11 November 2010, p. 11.

69 See for example, National Legal Aid, Submission 5, p. 2; HPLC and HRLRC, Submission 3, p. 4; Federation of Community Legal Centres, Submission 7, p. 1; see also Mr Warwick Soden, Federal Court of Australia, Committee Hansard, 11 November 2010, p. 6.

70 Ms Lucie O'Brien, Committee Hansard, 4 November 2010, p. 2.

71 Mr Ben Schokman, Human Rights Law Resource Centre, Committee Hansard, 4 November 2010, p. 6.

72 HPLC and HRLRC, Submission 3, p. 4.

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" that the efficiency measures encapsulated by the Bill should be balanced by consideration of the fundamental need to ensure that disadvantaged litigants are afforded a fair hearing;

" clarification of how unrepresented and potentially disadvantaged litigants will be assisted to understand their rights and obligations;

" clarification of the cost implications of any failure to take genuine steps to negotiate disputes; and

" the requirement that the court take into account the relative position of the parties in terms of resources and legal representation when considering the consequences of failing to take genuine steps.73

3.52 The Federation of Community Legal Centres-Victoria and National Legal Aid also supported the need for the court to take into account the relative positions of parties when considering the genuine steps undertaken and exercising its discretion to

award costs.74 75 The Federation of Community Legal Centres-Victoria submitted that the Bill should provide more guidance to the court to ensure that discretion is exercised more appropriately.73 On this point, National Legal Aid suggested that considerations, similar to those in unfair dismissal laws in relation to differences in the circumstances of parties, would be appropriate in relation to the powers of the court concerning these matters.76

3.53 HPLC and HRLRC also recommended that access to legal advice and representation be required for all potential litigants who are required to undertake preâ trial negotiations to ensure that they have access to justice, equality before the law and

a fair hearing. The Federation of Community Legal Centres-Victoria went one step further and submitted that if people could not obtain legal representation, then they should be exempt from the genuine steps obligation.77

3.54 The Department commented that it appreciated the concerns that litigation disadvantages people from low income backgrounds but went on to state that "because the Bill is flexible, rather than disadvantaging such people, it has been designed to better enable them to resolve disputes from a more equal position'.78 In addition, the

73 HPLC and HRLRC, Submission 3, pp 7-8.

74 Ms Lucie O'Brien, Committee Hansard, 4 November 2010, p. 2; National Legal Aid, Submission 5, p. 2.

75 Federation of Community Legal Centres-Victoria, Submission 7, p. 2.

76 National Legal Aid, Submission 5, p. 3.

77 Federation of Community Legal Centres-Victoria, Submission 7, p. 2.

78 Attorney-General's Department, Submission 11, p. 1.

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government has increased legal assistance funding as part of the Access to Justice measures.79 Mr Minogue provided the committee with additional comments:

There are several matters in response to that: the bill not being rolled out on its own but being part of the comprehensive access to justice reforms; the substantial increase in legal assistance funding, as I have referred to; the specific obligations on legal assistance providers to give greater effect to

early intervention, more advice and upfront assistance; and better referral to appropriate legal and non-legal support services. So that fills that gap.80

3.55 NADRAC also commented on the view that where a party is disadvantaged in some way, they can only get justice from a court. NADRAC stated that it understood the reasons for this view but did not support it. NADRAC noted that ADR

practitioners carefully assessed the disputants and provided, or referred people to, processes that were appropriate to then* needs. In addition, NADRAC submitted that disadvantaged litigants may be better served by a process which resolved their disputes in a quick, inexpensive and safe process rather than in lengthy, stressful and

costly court proceedings.^1

Consultation

3.56 The committee questioned the Department about the extent of the

consultations undertaken in relation to the Bill. Mr Minogue responded that NADRAC undertook extensive consultation in the preparation of its report and went on to state:

The content [of the legislation] is the NADRAC recommendation. By raising the fact that the government was going to legislate to implement the recommendation, people were aware that that was going on. In particular, the Federal Court was consulted since the beginning of this year.82

3.57 Mr Minogue indicated that the Department had consulted government agencies including Customs and the Australian Taxation Office. In addition, the Federal Court had been provided with drafting instructions in March and more detailed proposals in April. Formal transmission of the draft Bill was provided in May. When questioned about the Chief Justice's response to the draft, Mr Minogue

79 Mr Matthew Minogue, Attorney-General's Department, Committee Hansard, 11 November 2010, pp 13, 24.

80 Mr Matthew Minogue, Attorney-General's Department, Committee Hansard, 11 November 2010, p. 24.

81 National Alternative Dispute Resolution Advisory Council, Submission 10, p. 3.

82 Mr Matthew Minogue, Attorney-General's Department, Committee Hansard, 11 November 2010, p. 14.

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commented that the Chief Justice's response to the draft bill was not inconsistent with his submission to the committee.83

Conclusions

3.58 The committee notes that the Civil Dispute Resolution Bill 2010 is part of the government's moves to improve access to justice. It also reflects a cultural shift in how the position of the courts is perceived in the justice system. Through the 'genuine steps' obligation, the Bill aims to support the resolution of certain civil disputes in the Federal Court and the Federal Magistrates Court before litigation is commenced. The committee considers that the introduction of this obligation is an important initiative in ensuring that there is a focus on resolving a matter before costly and time consuming litigation is undertaken. Even when matters are not resolved, there will be a benefit to parties as the issues in dispute will be clarified and narrowed.

3.59 The committee has carefully considered arguments that the Bill introduces mandatory pre-action protocol. The committee is satisfied that this is not the case. Rather, while it is obligatory to provide a genuine steps statement, the Bill provides flexibility to the parties to determine the steps that they wish to take to resolve their

dispute and allows for circumstances when genuine steps cannot be undertaken. The Bill provides examples of genuine steps but does not mandate those that should be taken. This is the case with ADR: although witnesses focused on mandatory ADR, the Bill only provides ADR as an example of a genuine step, not a mandated step.

3.60 However, the committee believes that the Bill would benefit from the addition of an inclusive definition of 'genuine' to better reflect the intention of the NADRAC report and to provide guidance to the parties involved.

Recommendation 1

3.61 The committee recommends that the Bill be amended to provide for an inclusive definition of the word 'genuine' to better reflect the intention of the National Alternative Dispute Resolution Advisory Council report.

3.62 The committee has also considered the extensive discussion in evidence in relation to the exclusions to the genuine steps obligation. The committee is satisfied that the list of exclusions is appropriate and that, as indicated by the Department, should the need arise, further additions to the list can be made through regulation.

3.63 In relation to disadvantaged litigants, the committee has noted the comments by the Attorney-General's Department and NADRAC that disadvantaged litigants may benefit from less stress, cost and delay through the genuine steps obligation. In

addition, disadvantaged litigants will benefit from the additional resources provided by the Australian Government through its Access to Justice measures. However, the

83 Mr Matthew Minogue, Attorney-General's Department, Committee Hansard, 11 November 2010, p. 15.

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committee considers that the Bill should be amended to ensure that disadvantaged people benefit from the proposed regime and are not further disadvantaged or denied access to justice by ensuring that the court, in considering the genuine steps taken by a person when it is exercising its powers or performing its functions, takes into account

the circumstances of disadvantaged litigants.

Recommendation 2

3.64 The committee recommends that the Bill be amended so that the court, when taking into consideration the genuine steps that have been taken by a person when it is exercising its powers or performing its functions, also takes into account the circumstances of disadvantaged litigants.

3.65 The committee has also noted the concerns raised by the Castan Centre for Human Rights Law and the NSW Department of Justice and Attorney General in relation to the disclosure of information and the possible interference with a right to privacy. The committee considers that the Bill would be improved if it contained provisions to ensure that information disclosed cannot be used for any puipose outside

the resolution of the dispute at hand.

Recommendation 3

3.66 The committee recommends that the Bill be amended so that information disclosed during the genuine steps obligation cannot be used for any other purpose outside the resolution of the dispute at hand.

3.67 As a final matter, the committee was concerned about the comments made in evidence in relation to the consultation undertaken by the Department before the Bill was introduced. While many stakeholders contributed to the NADRAC report, the committee considers that the Department would have been well served by engaging more thoroughly with stakeholders before the Bill was introduced in the Parliament.

Recommendation 4

3.68 The committee recommends that, subject to the recommendations in relation to the definition of the word 'genuine', the consideration of position of disadvantaged litigants and the protection of the privacy of documents, the Senate pass the Bill.

Senator Trish Crossin

Chair

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ADDITIONAL COMMENTS BY

LIBERAL SENATORS

1.1 Liberal senators support the intention of the Civil Dispute Resolution Bill 2010 and two of the three recommended amendments to the Bill made in the majority report. However, Liberal senators consider that there were persuasive arguments raised in the evidence for the term 'reasonable steps' to be used rather than 'genuine

steps'. For example, Mr John Emmerig, Law Council of Australia, considered that 'genuine' was not the best way forward and that the term 'reasonable' allows 'one to apply well-established principles of objectivity in the assessment' of the steps taken. 'Genuine' was seen to introduce a subjective element.1 In addition, submitters commented that the term 'reasonable' is well understood and used in many areas of the law.2

1.2 Liberal senators also note that the teim 'reasonable' is used in the Victorian Civil Procedure Act 2010 and is proposed for amendments to the NSW Civil Procedure Act 2005. This was noted by submitters3 with the Federal Court commenting that it was concerned that 'any difference in terminology is likely to lead

to arid disputes in inteipreting comparative legislative provisions'.4 Liberal senators are also concerned that the use of different terms will undermine consistency between jurisdictions.

1.3 Liberal senators conclude that the temi 'reasonable steps' should be used instead of'genuine steps' as this teim has a well understood meaning, does not contain a subjective element and, importantly, would ensure legislative consistency across jurisdictions.

Recommendation 1

1.4 Liberal senators support the Chair's report and the intentions of the Bill, however, recommend that the Civil Dispute Resolution Bill 2010 be amended to remove the word 'genuine' and to insert the term 'reasonable'.

Senator Guy Barnett Deputy Chair

1 Mr John Emmerig, Law Council of Australia, Committee Hansard, 11 November 2010, p. 9.

2 NSW Department of Justice and Attorney General, Submission 9, p. 4.

3 Law Council of Australia, Submission 6 , p. 10; NSW Department of Justice and Attorney General, Submission 9, p. 2.

4 Federal Court of Australia, Submission 2, p. 3.

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APPENDIX 1

SUBMISSIONS RECEIVED

Submission Number Submitter

1 Professor Tania Sourdin

2 Federal Court of Australia

3 Human Rights Law Resource Centre and

PILCH Homeless Persons' Legal Clinic

4 Castan Centre for Human Rights Law

5 National Legal Aid

6 Law Council of Australia

7 Federation of Community Legal Centres - Victoria

8 Insolvency Practitioners Association (IPA)

9 NSW Department of Justice and Attorney General

10 National Alternative Dispute Resolution Advisory Council (NADRAC)

11 Attorney-General *s Department

ADDITIONAL INFORMATION RECEIVED

Documents tabled at public hearing by Federal Court of Australia on Thursday 11 November 2010

Answers to Questions on Notice provided by PILCH Homeless Persons' Legal Clinic on 10 November 2010

Answers to Questions on Notice provided by Law Council of Australia on 18 November 2010

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APPENDIX 2

WITNESSES WHO APPEARED BEFORE THE COMMITTEE

Thursday, 4 November 2010 (Melbourne)

Federation of Community Legal Services - Victoria O'BRIEN, Ms Lucie, Policy Officer

Castan Centre for Human Rights Law PENOVIC, Ms Tania, Associate

PILCH Homeless Persons' Legal Clinic POVEY, Mr Chris, Senior Lawyer

Human Rights Law Resource Centre SCHOKMAN, Mr Ben, Director, International Human Rights Advocacy

Thursday, 11 November 2010 (Canberra)

Federal Court of Australia SODEN, Mr Warwick, Registrar and Chief Executive Officer

Law Council of Australia EMMERIG, Mr John, Federal Litigation Executive PARMETER, Mr Nick, Director, General Policy

Attorney-General's Department MINOGUE, Mr Matthew, Acting First Assistant Secretary, Justice Policy Branch, Access to Justice Division BERESFORD-WYLIE, Ms Serena, Acting Assistant Secretary, Justice Policy Branch, Access to Justice Division

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APPENDIX 3

LIST OF ADDITIONAL EXCEPTIONS PROPOSED BY THE FEDERAL COURT1 Types of cases that should be excluded from pre-action protocol

Type of case Reasons why pre-action protocol not appropriate Administrative Law Review of an administrative decision which applicant wants overturned.2

Admiralty " Action in rem - more often than not neither the operator nor the charterer in Australia. " Cargo claims - insurer and reinsurer unknown, usually offshore and in multiple jurisdictions. Bankruptcy Sequestration orders - nearly always based on failure to comply with a

bankruptcy notice which is based on a dispute dealt with by another court resulting in a judgment debt in favour of the applicant.

Corporations " Actions by liquidators, receivers etc under the Corporations Act 2001 (Cth) subject to statutory obligations concerning investigation and information gathering. When does protocol apply? " Actions by ASIC under the Corporations Act 2001 (Cth) and the ASIC Act subject to statutory obligations concerning investigation and infonnation gathering. When does protocol apply? " Winding up applications - statutory demand served and not complied with. Statutory demand often based on the dispute having been dealt with another court which has resulted in a judgment debt in favour of the plaintiff.

HREOC

Complaint filed in HREOC. Complaint subject of conciliation and negotiation at HREOC.

Intellectual property

Urgent applications for injunctions to stop alleged infringing conduct from continuing. The effect of the pre-action protocols is that applicants will always move ex parte to avoid the Bill. Part IV TP A

(Competition) " Proceedings often issued by regulators such as the ACCC and involve penalties, injunctions and whistle blowers.3 " Actions by regulators (including the ACCC) subject to statutory obligations concerning investigation and information gathering. When does protocol

apply?

Patents Intensive case management often required to prepare for mediation and trial because factual issues usually complex (involving science, medicine, engineering etc) requiring expert evidence.

Taxation Prior to FCA proceedings, the taxpayer is usually extensively audited, an objection to an assessment is lodged with the ATO and subjected to review resulting in a decision on the objection.

1 Federal Court of Australia, Committee H ansard , 11 November 2010, p. 2. 2 The 'genuine steps' provided for [in] the Civil Dispute Resolution Bill 2010 (the Bill) do not need to be taken in relation to proceedings that are excluded proceedings. Proceedings that relate to a decision of, or a decision that has been subject to review by, the AAT (and other Tribunals) are excluded proceedings. 3 Proceedings for an order imposing a pecuniary penalty for a contravention of a civil penalty provision are

excluded proceedings.

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A TTOR N EY -GEN ER A L'S D EPA R TMEN T R ESPON SE TO FED ER A L C OU R T OF

A U STR A LIA 'S LIST OF A D D ITION A L EX C EPTION S

Type of case Reason why m atter should not be excluded

Administrative Law Most administrative law cases go through the Administrative Appeals Tribunal, which falls under an already excluded category in the Bill (si 5(c)). Other matters involving judicial review are suited to pre-action attempts at resolution. This is supported in Lord Justice Jackson's Review of Civil Litigation Costs, (p 352) Admiralty In his final report on the Review of Civil Litigation Costs, Lord Justice

Jackson states that admiralty matters are suited to resolution guidance prior to commencing proceedings in court, (p 346) Bankruptcy NADRAC consulted broadly on mandatory ADR and pre-action protocols. Its genuine steps recommendations addressed concerns about

those approaches. This flexible approach leaves considerable discretion to the parties/the judge as to what steps (if any) are appropriate. As noted by the IP A in its submission, the Bill would accommodate the varied circumstances involving insolvency practitioners. For similar reasons, it is sufficiently flexible to accommodate different bankruptcy matters.

Corporations Based on consultation, it was concluded that the application of the Bill to certain corporations matters would be of value. If there was a particular case where genuine steps were not appropriate, those consulted advised that lodging a genuine steps statement outlining the reasons why would be a simple process.

Australian Human Rights Commission Following consultation, it was concluded that the application of the Bill to human rights matters would be of value. Where there are reasons in a

particular case for not taking genuine steps in relation to a particular issue, this can be reflected in the genuine steps statement. Intellectual property In circumstances where urgency is the only reason for genuine steps not being undertaken, this would remain within the scope of the Bill and

parties could cite the urgent nature of the matter as a reason why steps were not undertaken (clause 6(2)(b)).

Part IVA TP A (Competition) Proceedings for an order imposing a pecuniary penalty for a contravention of a civil penalty provision are already excluded.

In relation to other trade practices matters, if there was a particular case where genuine steps were not appropriate, those consulted advised that lodging a genuine steps statement outlining the reasons (such as urgency) would be a simple process. Patents These disputes may include complex factual and technical issues. Some

issues may benefit from attempts at discussion and resolution (genuine steps). Where there are reasons in a particular case for not taking genuine steps in relation to a particular issue, this can be reflected in the genuine steps statement.

Taxation Most taxation cases go through the Administrative Appeals Tribunal, which falls under an already excluded category in the Bill (si5(c)). However, other taxation matters may be amendable to pre-trial discussion of the facts and issues in dispute (genuine steps).

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The Senate

Legal and Constitutional Affairs

Legislation Committee

Combating the Financing of People Smuggling and other Measures Bill 2011 [Provisions]

March 2011

ISBN: 978-1-74229-433-9

This document was printed by the Senate Printing Unit, Department of the Senate, Parliament House, Canberra.

342

MEMBERS OF THE COMMITTEE

Members

Senator Patricia Crossin, Chair, ALP, NT

Senator Guy Barnett, Deputy Chair, LP, TAS

Senator Mark Fumer, ALP, QLD

Senator Scott Ludlam, AG, WA

Senator Stephen Parry, LP, TAS

Senator Louise Pratt, ALP, WA

Participating Members

Senator the Hon. George Brandis SC, LP, QLD

Secretariat

Ms Julie Dennett Committee Secretaiy

Mr Owen Griffiths Principal Research Officer

Ms Kate Middleton Administration Officer

Suite S1.61 Telephone: (02) 6277 3560

Parliament House Fax: (02) 6277 5794

CANBERRA ACT 2600 Email: legcon.sen@aph.gov.au

iii

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344

Table of Contents

MEMBERS OF THE COMMITTEE...................................................................iii

RECOMMENDATIONS.........................................................................................vii

CHAPTER 1 ..................................................................................................................1

INTRODUCTION......................................................................................................1

Background...............................................................................................................1

Conduct of the inquiry................................................................ 3

Acknowledgement....................................................................................................3

Scope of the report................................................................................ 3

Note on references....................................................................................................3

CHAPTER 2 ................................................................................................................. 5

OVERVIEW OF THE BILL .................................................................................... 5

Key provisions of the Bill ........................................................................................ 5

CHAPTER 3 ..................................................................................................................9

KEY ISSUES................................................ 9

Title of the Bill.........................................................................................................9

Enhanced regulation of remittance sector...............................................................9

Sharing of AUSTRAC intelligence ....................................................................... 14

Electronic identity verification ..... ............................. 15

Committee view......................................................................................................16

ADDITIONAL COMMENTS BY LIBERAL SENATORS ........................... 19

Introduction............................................................................................................19

Title of the Bill.......................................................................................................19

Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) Rules. 19

AUSTRAC intelligence sharing.............................................................................19

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Regulatory burden..................................................................................................20

Scrutiny of Bills Committee...................................................................................20

APPENDIX 1...............................................................................................................21

SUBMISSIONS RECEIVED...................................................................................21

APPENDIX 2 ...............................................................................................................23

WITNESSES WHO APPEARED BEFORE THE COMMITTEE ................... 23

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RECOMMENDATIONS

Recommendation 1

3.34 The committee recommends that, as a matter of priority, the Australian Transaction Reports and Analysis Centre establish appropriate memoranda of understanding for the sharing of intelligence with the new designated agencies outlined in the Bill.

Recommendation 2

3.35 The committee recommends that the Attorney-General's Department review relevant options with a view to introducing an appropriate oversight mechanism to monitor the handling of credit information for the electronic verification of identity pursuant to the Bill.

Recommendation 3

3.36 The committee recommends that the Senate pass the Bill, noting recommendations 1 and 2.

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348

CHAPTER 1

INTRODUCTION

Background

1.1 The Combating the Financing of People Smuggling and Other Measures Bill 2011 (Bill) was introduced into the House of Representatives on 9 February 2011 by the Hon Brendan O'Connor MP, Minister for Home Affairs and Justice (minister).1 On 3 March 2011, the Senate referred the provisions of the Bill to the Legal and Constitutional Affairs Legislation Committee (committee) for inquiry and report by 21 March 2011.2

The Bill

1.2 The Bill was developed following announcements by the minister on the proposed reforms and consultation processes conducted by the Attorney-General's Department (department) and the Australian Transaction Reports and Analysis Centre (AUSTRAC) in April and July 2010.3 On 11 November 2010, the minister released an exposure draft of the Bill. In a foreword to the exposure draft, the minister stated:

Australian law enforcement agencies have identified international cash transfer services provided by remittance dealers as the primary method used to pay the organisers of people smuggling ventures.

People smuggling is profit-driven. We must ensure that remittance dealers * which many people use to send money overseas to family and friends - are not misused to give people smugglers the funds they need to organise

illegal smuggling ventures, or to support other forms of criminal activity.4

1.3 The Explanatory Memorandum (EM) notes that the Bill amends three pieces of legislation: the Anti-Money Laundering and Counter-Terrorism Financing Act

1 House of Representatives Hansard, 9 February 2011, p. 135.

2 Journals of the Senate, 3 March 2011, p. 665,

3 Hon Brendan O'Connor MP, Minister for Home Affairs and Justice, 'Strengthening the fight against money laundering and people smuggling', Media Release, 23 April 2010; Attorney- General's Department (AGD) & Australian Transaction Reports and Analysis Centre (AUSTRAC), 'Enhanced regulation of alternative remittance dealers', Discussion Paper, April 2010; Hon Brendan O'Connor MP, Minister for Home Affairs and Justice, 'Strengthening the fight against money laundering and people smuggling', Media Release, 16 July 2010; AGD and AUSTRAC, Specific proposals for an enhanced AML/CTF registration scheme for the remittance sector, July 2010.

4 Hon Brendan O'Connor MP, Minister for Home Affairs and Justice, Minister's Foreword and Oven>iew, November 2011, p. 1.

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2006 (AML/CTF Act); the Financial Transaction Reports Act 1988 (FTR Act); and the Privacy Act 1988 (Privacy Act).5

1.4 The Bill has a number of key measures:

" it introduces an enhanced regulation scheme for remitters under which remitters applying for registration will be required to provide information relating to their suitability for registration, and the AUSTRAC Chief Executive Officer (CEO) will have the power to refuse suspend, cancel or impose conditions on registration;

" it enables the AUSTRAC CEO to issue infringement notices to remitters as an enforcement mechanism;

" it introduces a new designated service to the AML/CTF Act to extend regulation to businesses that operate a network of remittance dealers;

" it improves information sharing of AUSTRAC financial intelligence, extending the list of designated agencies to include the Department of Foreign Affairs and Trade (DFAT), the Defence Imagery and Geospatial Organisation (DIGO), the Defence Intelligence Organisation (DIO), the Defence Signals Directorate (DSD) and the Office of National Assessments (ONA);

" it enables reporting entities to use credit reporting data to verify the identity of their customers, and introduces a number of privacy safeguards to ensure information is only used for the purpose of verifying identity;

" it establishes offences for unauthorised access to verification

information, obtaining access to verification information by false pretences and unauthorised use or disclosure of verification information; and

" it amends the FTR Act to introduce an exemption power that will enable the AUSTRAC CEO to exempt, by way of written instrument, persons from one or more provisions of the FTR Act.6

1.5 The EM includes a Financial Impact Statement which notes that AUSTRAC will meet the ongoing costs of the measures within existing resources. Also included in the EM is a Regulation Impact Statement which focuses on the enhanced regulation of the remittance sector. This suggests 'a potential net benefit of between $17 million and $ 18 million per year', but includes some caveats regarding the assumptions made regarding the estimates of compliance costs in the remittance sector.7

5 Explanatory Memorandum (EM), p. 1.

6 Second Reading Speech, the Hon Brendan O'Connor MP, Minister for Home Affairs and Justice, House of Representatives Hansard, 9 February 2011, pp 135-137.

7 EM, p. 5.

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Conduct of the inquiry

1.6 The committee advertised the inquiry on the committee's website and wrote to 38 organisations and individuals inviting submissions. Details of the inquiry, the Bill and associated documents were placed on the committee's website.

1.7 The committee received nine public submissions and one confidential submission, which are listed at Appendix 1. Public submissions were placed on the committee's website for ease of access by the public.

1.8 The committee held a public hearing on 16 March 2011 in Canberra. A list of witnesses who appeared at the hearing is at Appendix 2 and copies of the Hansard transcript are available at http://www.aph.gov.au/hansard.

Acknowledgement

1.9 The committee thanks those organisations and individuals who made submissions and gave evidence at the public hearing.

Scope of the report

1.10 Chapter 2 provides an outline of the Bill and its key provisions. Chapter 3 discusses the issues raised in submissions and evidence.

Note on references

1.11 References in this report are to individual submissions as received by the committee, not to a bound volume. References to the committee Hansard are to proof Hansard: page numbers may vary between the proof and the official Hansard transcript.

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CHAPTER 2

OVERVIEW OF THE BILL

Key provisions of the Bill

2.1 The key provisions of the Bill are set out in Schedules 1-4.

Schedule 1 - remittance dealers

2.2 Remittance services facilitate the transfer of funds within and between countries, often outside the formal financial and banking system. The system operates through businesses which enter into agreements to receive money from individuals or businesses in one country and pay funds to individuals or businesses overseas. AUSTRAC estimates there are around 6,400 providers of remittance services in Australia. These include providers of remittance networks, remittance affiliates and independent remittance businesses.1

2.3 The amendments in Schedule 1 build on the regulation of the remittance sector in the AML/CTF Act. This includes a requirement that persons must not provide a designated remittance service unless the person is listed on a register administered by the AUSTRAC CEO.2 Schedule 1 amends the AML/CTF Act to

strengthen the legislative framework of the regulation of remittance dealers, remittance affiliates and the providers of remittance networks.3

2.4 The EM states that the amendments in Schedule 1 will:

" introduce a new designated service into the AML/CTF Act which will extend AML/CTF regulation to businesses that operate as providers of remittance networks;

" require providers of remittance networks and their affiliates, and independent remittance dealers to be registered with AUSTRAC and to reapply for registration every three years;

" introduce a registration scheme which requires a person seeking registration to provide the AUSTRAC CEO with information relevant to their suitability for registration, and to allow the AUSTRAC CEO to obtain information from other persons for the purposes of determining whether the person is suitable to be registered;

1 EM, p. 6.

2 Anti-Money Laundering and Counter-Terrorism Financing Act 2006, Part 6.

3 EM, p. 1.

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" empower the AUSTRAC CEO to refuse, suspend, cancel, or impose conditions on the registration of a provider of a remittance network, remittance affiliate or independent remittance dealer;

" introduce internal and external review mechanisms for registration decisions made by the AUSTRAC CEO;

" introduce enforcement measures, including offences, civil penalty provisions, and an infringement notice scheme to enhance the ability of AUSTRAC to effectively regulate the remittance sector;

" require providers of remittance networks to undertake some AML/CTF Act obligations on behalf of their affiliates; and

" provide for a transition period for the implementation of the new

registration regime to ensure that those operating in the remittance sector have time to comply with the registration requirements introduced by the Bill.

Schedule 2 - amendments relating to designated agencies

2.5 Schedule 2 amends the AML/CTF Act to expand the list of agencies with which AUSTRAC can share financial intelligence.

2.6 In particular, Items 5 and 6 of Schedule 2 amend the existing section 5

definition of 'designated agency', which lists government agencies which have access to AUSTRAC information. The amendments add the following organisations to the list of designated agencies: the Defence Imagery and Geospatial Organisation

(DIGO), the Defence Intelligence Organisation (DIO), the Defence Signals Directorate (DSD), the Office of National Assessments (ONA) and the Department of Foreign Affairs and Trade (DFAT).

Schedule 3 - verification o f identity

2.7 Customer identification and verification of customer identity is one of the key requirements of the AML/CTF Act. Identity verification can be undertaken by inspection of physical documents or by electronic identity verification, through checking specified identity details against information held by other organisations.

Credit reporting agencies maintain databases which offer a source of information for the purposes of electronic identity verification, however the Privacy Act currently places limits on the disclosure and use of this personal information.

2.8 The Australian Law Reform Commission (ALRC) has previously

recommended that, with appropriate privacy protections, '[t]he use and disclosure of credit reporting information for electronic identification purposes...should be authorised under the AML/CTF Act'.4 The EM notes that the government agreed in

4 Australian Law Reform Commission, For Your Information: Australian Privacy Law and Practice, Report 108, May 2008, p. 1929.

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principle to the recommendation and undertook a Privacy Impact Assessment of the proposal, which informed the development of the Bill. ^

2.9 Schedule 3 amends the AML/CTF Act and the Privacy Act to enable reporting entities to use credit reporting data to verify the identity of their customers. In particular, Item 6 of Schedule 3 inserts a new Division 5A into the AML/CTF Act to provide for the use and disclosure of personal information by reporting entities and credit reporting agencies for the purposes of verifying a person's identity.

2.10 The EM states that the amendments in Schedule 3 will:

" permit a reporting entity to disclose personal information to a credit reporting agency for identity verification puiposes with the express consent of the individual whose identity is being verified;

" permit a credit reporting agency to conduct a matching process between personal information provided to it by a reporting entity and the personal information held on its own files, and provide a report to the reporting entity on the outcome of the verification process;

" require reporting entities to notify their customers of unsuccessful attempts to verify identity using credit reporting data;

" require credit reporting agencies and reporting entities to retain information about verification requests for seven years and to delete it at the end of that period;

" require a credit reporting agency to keep information about verification requests separate from the individual's credit information file; and

" create offences to address unauthorised access to, and disclosure of, verification information.5 6

Schedule 4 - amendment o f the FTR Act

2.11 Schedule 4 amends the FTR Act to enable the AUSTRAC CEO, by written instrument, to exempt a specified person from one or more of the provisions of that Act. An exemption may apply unconditionally or may be subject to specified conditions. The EM notes that this will bring the FTR Act into line with the AML/CTF Act and allow the AUSTRAC CEO to provide regulatory relief in circumstances which would otherwise result in unnecessary or unduly onerous obligations being imposed.7

5 EM, p. 4.

6 EM, p. 4.

7 EM, p. 5.

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CHAPTER 3

KEY ISSUES

3.1 Most of the evidence received by the committee during the inquiry broadly supported the measures proposed in the Bill. However, some concerns were raised in relation to: the title of the Bill; enhanced regulation of the remittance sector; sharing of AUSTRAC intelligence with an expanded list of government agencies; and facilitation of electronic identity verification. The committee notes that, in some cases, these concerns duplicate comments made to the department's consultation regarding the exposure draft of the Bill.

Title of the Bill

3.2 Both the Australian Privacy Foundation (APF) and Liberty Victoria (LV) considered that, by highlighting only one offence which may utilise the remittance sector (the financing of people smuggling), the title of the Bill is 'uninformative and misleading' and should be amended to more properly reflect the Bill's intent and content.1 APF considered the title of the Bill to be part of 'a disturbing trend towards emotive and politicised titles of legislation'.2

3.3 When questioned about the title of the Bill at the public hearing, a

departmental officer explained:

[L]aw enforcement agencies are aware that the remittance sector is being used to finance serious criminal activity, including people smuggling but also other serious crime. The policy was announced in early 2010 as part of a broader government package of measures to combat smuggling. It is also relevant that the bill complements laws that were introduced last year that mean people who provide material support to people smugglers now face up to 10 years jail and fines of up to $110,000...[P]eople smuggling and combating people smuggling and complementing the government's broader efforts on that front was a key driver in the development of this policy in the bill.3

Enhanced regulation of remittance sector

N eed fo r measures

3.4 The Australian Crime Commission (ACC) noted that the remittance sector continues to pose major challenges for regulatory and law enforcement agencies and described the sector as 'an intersection point where many critical threats and

1 Australian Privacy Foundation, Submission 2, p. 1; Liberty Victoria, Submission 3, p. 2.

2 Australian Privacy Foundation, Submission 2, p. 2.

3 Mr Anthony Coles, Attorney-General's Department, Committee Hansard, 16 March 2011, p. 8.

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vulnerabilities meet1. The ACC supported the enhanced capacity of AUSTRAC to supervise the activities of the remittance sector. An officer from the ACC expanded upon the perceived benefits of enhanced regulation of the remittance sector:

The fact that there will be a register and some checks in relation to the people who are registering obviously would give us [the ACC] visibility of who is operating in the sector. It would allow us to understand more accurately where risks might lie, and obviously we would be able to better profile the sector. In terms of the ability to remove people from the sector,

that is a step forward. Insofar as the way we disrupt and prevent organised crime, it is not always possible to charge people with money-laundering offences. The thresholds are very high. So as a means of preventing and disrupting organised crime, this would be a very valuable tool.4 5

3.5 However the ACC also commented that, while registration of remitters would be a useful tool for law enforcement, it may also lead to illegitimate remitters becoming more covert. While the ACC was supportive of the enhanced regulatory measures, it also submitted that there could be unintended impacts. In particular, the ACC expressed the view it is was important that, once the new measures are in place,

adequate safeguards are established to protect classified operational intelligence, while balancing the rights of individuals to due process and natural justice. 3

3.6 A differing view on the enhanced regulatory measures for the remittance sector was put forward by the Australian Institute of Criminology (AIC). The AIC outlined the research that it has undertaken about the risks posed by remittance dealers in relation to money laundering, financing terrorism and serious crime. This research found little evidence of remittance dealers being involved in the transfer of the proceeds of crime or financing of terrorism. Although some cash transfer services provided by remittance dealers have been used to pay the organisers of people smuggling ventures and other serious criminal activities, the AIC commented that 'the documented instances of this represent an exceeding small proportion of the total number of transactions'.6

3.7 The AIC research concluded that the introduction of a system in which the suitability of remittance dealers is assessed by a regulator may be unnecessary and ineffective since dealers who seek to act illegitimately may simply remain outside the

regulated sector and continue to act improperly. The AIC also stated the cost of complying with the system could arguably be excessive in comparison with the likely benefits.7 However, an officer from department noted that the AIC research was based on information in the public domain:

4 Mr Michael Outram, Australian Crime Commission, Committee Hansard, 16 March 2011, p. 3.

5 Australian Crime Commission, Submission 6, pp 2-4.

6 Australian Institute of Criminology, Submission 4, p. 2.

7 Australian Institute of Criminology, Submission 4, p. 2.

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The evidence of the ACC and what we know from the AFP [Australian Federal Police] also indicates that the remittance sector poses a risk that we need to address. I think the ACC said in their own submission that there is a risk of further regulation making the black market worse. But the

conclusion we have reached, which is the conclusion they reached, is that that is something for law enforcement, AUSTRAC, to monitor and manage. It is not a reason not to regulate.8

Powers o f the A USTRA C Chief Executive Officer

3.8 The committee notes that the Senate Scrutiny of Bills Committee considered the Bill and raised a number of concerns in relation to which it sought the Attorney- General's response. One of these concerns relates to Items 16 to 18 of Schedule 1 which amend existing section 49 of the AML/CTF Act to extend the powers of the AUSTRAC Chief Executive Officer (CEO) to request further information after a reporting entity has communicated a suspicious matter. Currently this power is limited

to seeking further information from a reporting entity, but the amendments would extend the power to require the production of further information from a reporting entity 'or any other person'. In the view of the Scrutiny of Bills Committee, 'it is appropriate that the extension of the power to issue a notice to produce to "any person" [should] be subject to a requirement that the AUSTRAC CEO fomis a reasonable belief that the person asked to produce further information has knowledge,

or custody or control of documents or information which will assist in the administration of the legislative scheme'.9

3.9 In its submission to this inquiry, Liberty Victoria (LV) considered the proposed provisions for regulation of remittance providers 'well drafted'. However, LV also highlighted concerns with the scope of power granted to the AUSTRAC CEO

in the Bill. LV noted that the AUSTRAC CEO will be given broad powers to deregister or to choose not to register a remittance provider where satisfied they pose 'a significant money laundering, financing terrorism or people smuggling risk' (proposed new subsections 75G(1) and 75C(4), Item 31 of Schedule 1). While

agreeing that this is a necessary power, LV considered that this 'significant risk' should be defined. LV also made a general point, in relation to the notification of affected persons of decisions made by regulators, that the penalties outlined in the Bill 'should only be imposed where there has been an intentional or at least negligent contravention of legislation'.10

3.10 At the public hearing, an officer from the department noted that a response to the Senate Scrutiny of Bills Committee was in the process of being prepared and was

8 Mr Anthony Coles, Attorney General's Department, Committee Hansard, 16 March 2011, p. 12.

9 Senate Committee for the Scrutiny of Bills, Alert Digest, No. 2 of 2011, p. 7.

10 Liberty Victoria, Submission 3, pp 2-3.

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due in the week commencing 21 March 2011. However, the officer offered a broad explanation:

One of the key challenges that the bill is trying to address is the existing 'registration scheme', for want of a better term, that applies to remitters. Effectively, that is a rubber-stamping exercise. Anyone who applies to the AUSTRAC CEO is automatically admitted to the register. There is very little scope for AUSTRAC to take a proactive regulatory approach to the sector. The measures that the Scrutiny of Bills Committee has raised are all measures that were implemented, or proposed to be implemented, to enhance AUSTRAC *s ability to regulate the sector effectively.11

3.11 An officer from AUSTRAC also advised that the decision-making process of the AUSTRAC CEO would be subject to the normal accountability measures which apply to administrative decisions by public servants, such as the common law and the Administrative Decisions (Judicial Review) Act 1977. The AUSTRAC officer also explained that the AML/CTF Rules which will set out the factors to be taken into account by the AUSTRAC CEO are in the process of development and will be released for stakeholder consultation in April 2011.12

3.12 A departmental officer noted that reviewable decisions by the AUSTRAC CEO (which include decisions to refuse, cancel, or impose conditions on registration) are subject to the requirement of written notice to the affected person and can be

subject to internal review (by an officer senior to the original decision maker, who was not involved in the original decision) or external review by the Administrative Appeals Tribunal (AAT).13

3.13 AUSTRAC also advised that its approach to compliance is, first, to educate and seek compliance on a voluntary basis before any significant enforcement action is taken, noting that only in the most serious cases would AUSTRAC seek to deregister remittance service providers.14

Regulatory burden

3.14 LV highlighted that, in the EM, the financial impact of the Bill is assessed as none and the potential net benefit as $17-18 million dollars. LV argued that this fails to take into account the cost of implementing the support systems required, the

ongoing cost of operating the electronic identity verification system and the likely costs of supervision of remittance providers (either to remittance providers or to

11 Mr Anthony Coles, Attorney-General's Department, Committee Hansard, 16 March 2011, pp 8â 9.

12 Ms Liz Atkins, AUSTRAC, Committee Hansard, 16 March 2011, pp 9-10.

13 Mr Anthony Coles, Attorney-General's Department, Committee Hansard, 16 March 2011, p. 12.

14 Ms Liz Atkins, AUSTRAC, Committee Hansard, 16 March 2011, p. 7.

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AUSTRAC). LV commented that 'the potential net benefit is likely to be less than stated in the EM and the financial impact greater than zero'.13

3.15 During the public hearing, officers from the department acknowledged that the Bill would create efficiencies by shifting some regulatory compliance requirements to remittance network providers from the remittance affiliates in their network:

In implementing the three-tier structure and cooperative arrangements between remittance network providers and their affiliates, we have as much as possible tried to reflect current business practice in fact to make it easier for network providers like Western Union and Travelex to work with their very large networks of affiliates and to make it as easy as possible for those

affiliates which are for the most part small businesses *post offices, newsagents et cetera *to draw on the expertise and the resources provided by their network provider.15 16

3.16 In the case of police checks, AUSTRAC explained how the compliance requirements in the Bill would operate between remittance network providers and their affiliates:

The structure of the [A]ct is such that the network provider will be the provider of a designated service. The customer of the network provider will be the affiliate. The network provider will therefore have an AML/CTF program that will require it to do customer due diligence on its customer, which is the affiliate. Regarding its program, it will need to look at the risk around its affiliates and decide what sort of checks need to be done in relation to those affiliates for it to be satisfied that it has done its due diligence, and then that will satisfy us that they have done their due

diligence. In most cases that will require police checks. Our understanding is that the network providers already do police checks on all their

affiliates.17

3.17 An officer from the department noted that there has always been an

acknowledgement that the remittance sector provides an important service to a significant number of people in the Australian community, and the enhanced scrutiny by AUSTRAC would give added confidence in these services.18 The EM states that the details of the reform to the remittance sector will be contained in the AML/CTF Rules 'which will be developed by AUSTRAC in consultation with industry to minimise the impact on business'.19

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15 Liberty Victoria, Submission 3, p. 4.

16 Mr Anthony Coles, Attorney-General's Department, Committee Hansard, 16 March 2011, p. 10.

17 Ms Liz Atkins, AUSTRAC, Committee Hansard, 16 March 2011, p. 11.

18 Mr Anthony Coles, Attorney-General's Department, Committee Hansard, 16 March 2011, p.7.

19 EM, p. 5.

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Sharing of AUSTRAC intelligence

3.18 The Australian Privacy Foundation (APF) considered that the Bill's amendment to expand the list of designated agencies with access to AUSTRAC data 'continues a disturbing trend to periodic expansion of the scope of the financial

monitoring regime - a form of function creep which is a particular concern in relation to the very significant intrusions into individuals' privacy authorized by the AML-CTF Act'.20

3.19 In relation to the sharing of AUSTRAC intelligence, the Office of the Australian Information Commissioner (OIAC) noted that the application of the Privacy Act 1988 (Privacy Act) varies. Sharing of information between AUSTRAC and Department of Foreign Affairs and Trade would need to comply with the

Information Privacy Principles, however the acts and practices of agencies such as the Office of National Assessments, the Defence Intelligence Organisation, the Defence Imagery and Geospatial Organisation and Defence Signals Directorate are exempt from the Privacy Act. While the oversight of these agencies is undertaken by the Inspector-General of Intelligence and Security, the OAIC suggested a privacy framework (including memoranda of understanding) could also be considered to support appropriate information sharing between agencies.21

3.20 AUSTRAC noted at the public hearing that memoranda of understanding (MOUs) are agreed with all designated agencies with whom AUSTRAC intelligence is shared:

[AUSTRAC] always have a memorandum of understanding with a

designated agency which deals with exactly how they can use the

information and with what officers and what numbers of officers can have access to our information. It is not the case that every officer of a

designated agency would have access to our information; it is a limited number. And we ensure that the MOUs have requirements around how the information can be used, how it is collected and how it is stored *all the sorts of things that you would expect an agency like AUSTRAC, which is covered by the Privacy Act, would have in place to deal with its

information.22

3.21 While there are precedents of MOUs for data sharing with other government agencies, AUSTRAC acknowledged that the negotiation of MOUs with the new designated agencies proposed in the Bill could take months and may not be agreed until after commencement of the Bill. AUSTRAC confirmed negotiations for MOUs with the new designated agencies proposed in the Bill had not commenced and

20 Australian Privacy Foundation, Submission 2, pp 3-4.

21 Office of the Australian Information Commissioner, Submission 5 , p. 2-3.

22 Ms Liz Atkins, AUSTRAC, Committee Hansard, 16 March 2011, p. 13.

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AUSTRAC would be taking steps 'in the very near future to get [the] MOUs underway'.23

3.22 In relation to the commencement of MOUs for information sharing between AUSTRAC and the new designated agencies, the department commented:

Under section 126 of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006, AUSTRAC is required to have in place instruments of authorisation before providing access to AUSTRAC information to officials of designated agencies. This instmment of authorisation is an important

safeguard for the protection of AUSTRAC information.

The Department understands that AUSTRAC *s existing practice is to have MOUs in place with designated agencies which support and complement the instruments of authorisation required under section 126 before

providing access to officials of those agencies. AUSTRAC has advised the Committee that it will negotiate MOUs with the proposed designated agencies following passage of the Bill.

The Department supports this approach to satisfy the requirements in section 126.24

3.23 The Australian Institute of Criminology (AIC) indicated its support for the proposed measures to share AUSTRAC information with other agencies within the Australian intelligence community. However, it argued that the AIC and the

Australian Bureau of Statistics (ABS) should also be included on the list of agencies which can access AUSTRAC data. Allowing AIC and the ABS to access AUSTRAC information would benefit 'future policy development in this important field of financial crime and counter-terrorism'.2"

Electronic identity verification

3.24 Several submissions noted that the Bill's measures in relation to electronic identity verification had been discussed in the Australian Law Reform Commission's May 2008 report on privacy law, For Your Information, and had been the subject of a Privacy Impact Assessment. There was broad support expressed in these submissions

for the privacy safeguards which had subsequently been incorporated into the Bill.26

3.25 ING Direct outlined its strong support for the insertion of new Division 5A into the AML/CTF Act which makes provision for the use and disclosure of personal information by reporting entities and credit reporting agencies for the purposes of verifying an individual's identity. ING Direct noted that these changes will benefit

___________________________________________________________________________________________________ Page 15

23 Ms Liz Atkins, AUSTRAC, Committee Hansard, 16 March 2011, p. 13-14.

24 Attorney-General's Department, Answer to question on notice, 19 March 2011.

25 Australian Institute of Criminology, Submission 4, pp 2-3.

26 Australian Privacy Foundation, Submission 2, p. 2; Office of the Australian Privacy Commissioner, Submission 5, p. 2; ING Direct, Submission 1, pp 1-2.

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reporting entities (such as themselves) which operate online business models, and would provide a cost effective mechanism to comply with the existing regulatory framework while increasing competition within the banking sector.27

3.26 The Australian Privacy Foundation welcomed several of the requirements in the Bill intended to address privacy issues, but restated its concern, previously raised during the Privacy Impact Assessment, regarding the Bill's restrictions on the use or disclosure of verification information contained in proposed new sections 35D and 35K (Item 6 of Schedule 3). The APF submitted that it 'may be unrealistic in practice for credit reporting agencies not to use at least some of the information obtained from AML/CTF e-verification requests for other purposes'. This could potentially place credit reporting agencies in an impossible position due to their existing data quality obligations under the Privacy Act.28

3.27 LV also welcomed the privacy safeguards in the Bill regarding electronic identity verification, but commented that 'concern remains that there will be further legislated function creep' in this area. In particular, LV noted that the Privacy Act lacks a requirement for individuals to be notified in the event of a privacy breach, and suggested that proposed new section 35L (Item 6 of Schedule 3) should require reporting entities or credit reporting agencies to notify individuals affected in the case of a significant or serious privacy breach.29

3.28 The OIAC outlined a number of suggestions to improve privacy protections within the Bill. The OAIC preferred a scoring system as opposed to a 'yes/no' response model in relation to confirmations of relevant personal information. The OAIC suggested that the Bill could more explicitly refer individuals to appropriate dispute resolution processes to resolve claims where there is not a sufficient match during electronic verification processes. Finally, the OAIC considered that there may be a need for appropriate oversight mechanisms to monitor the handling of credit information for electronic verification, and canvassed some possible oversight mechanisms which might be considered.30

Committee view

3.29 The committee notes the broad support for the measures contained in the Bill, and commends the department for its comprehensive process of consultation with stakeholders through the release of the discussion paper, the Privacy Impact Assessment and the exposure draft of the Bill.

3.30 However, the committee's consideration of the Bill has been hampered by the unavailability of the AML/CTF Rules which will operate to support the Bill, noting

27 ING Direct, Submission 1, p. 1

28 Australian Privacy Foundation, Submission 2, pp 2-3.

29 Liberty Victoria, Submission 3, p. 3.

30 Office of the Australian Information Commissioner, Submission 5, p. 4-5.

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that the EM states the detail of the reform to the remittance sector will be contained in the AML/CTF Rules which will be developed in the future by AUSTRAC.31 The committee is also disappointed that the department was not able to provide an appropriate response at the public hearing to the important concerns regarding the provisions of the Bill which were raised in the Senate Scrutiny of Bills Committee Alert Digest of 2 March 2011.

3.31 Nonetheless, the committee considers that enhanced regulation of the remittance sector will be an important measure to monitor and administer a sector of the financial services industry which has clearly been associated with serious and organised crime, including people smuggling. In the view of the committee, the Bill

appropriately balances the need for regulation with the interests of the businesses which operate in the remittance sector and the many Australians who legitimately utilise these services to transfer funds.

3.32 The provisions in the Bill will also improve the sharing of AUSTRAC financial intelligence within the Australian intelligence community by expanding the list of 'designated agencies'. However, the committee is concerned that evidence received during the public hearing suggested that there may be a significant delay between the possible commencement of the Bill's measures and the establishment of MOUs for the appropriate sharing of intelligence between AUSTRAC and the new designated agencies. The committee considers that, while establishment of MOUs is not an explicit requirement in the proposed legislation, these agreements are a vital privacy and security safeguard when sensitive information is shared between government agencies. The committee is of the view that MOUs for the sharing of intelligence should be completed as a matter of priority between AUSTRAC and the other relevant government agencies.

3.33 The committee considers the facilitation of electronic identity verification in the Bill to be a measure with benefits for regulators, businesses and consumers. The broad support for the privacy safeguards in the Bill reflects the effectiveness of the Privacy Impact Assessment process in engaging relevant stakeholders. However, the committee also acknowledges that the evidence received during the inquiry indicates

that some privacy concerns continue to exist. This suggests that privacy issues, in the context of the regulatory requirements of the AML/CTF Act, may be an area of policy requiring further scrutiny in the future. In particular, the committee considers that the oversight mechanisms canvassed by the Office of the Australian Information Commissioner to monitor the handling of credit information for electronic verification of identity are worthy of further consideration by the department.

31 EM, p. 5. However, a broad overview of the proposed AML/CTF Rules to support the Exposure Draft of the Combating the Financing of People Smuggling and Other Measures Bill was released as part of the consultation process in late 2010 and is available on the department's website at: http://www.ag.gov.au/www/agd/agd.nsf/Page/Anti-monevlaundering Anti- monevlaundering (accessed 17 March 2011).

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Recommendation 1

Recommendation 2

Recommendation 3

3.36 The committee recommends that the Senate pass the Bill, noting recommendations 1 and 2.

Page 18

Senator Trish Crossin Chair

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ADDITIONAL COMMENTS BY

LIBERAL SENATORS

Introduction

1.1 The key measures in the Combating the Financing of People Smuggling and Other Measures Bill 2011 (Bill) are supported in-principle by Liberal Senators. However this support is deferred until a number of matters, which were raised during the inquiry into the Bill, are addressed.

Title of the Bill

1.2 Liberal Senators are of the view that the title of the Bill does not relate to either its content or intended purpose. While the key measure in the Bill deals with the enhanced regulation of the remittance sector (through the amendment of the AML/CTF Act), the title of the Bill focuses only on one aspect of the possible misuse of the remittance sector, namely the financing of people smuggling. This suggests a cynical use of the prerogative to choose the title of proposed legislation to be introduced into the Parliament. The title of the Bill is clearly uninformative and misleading, and Liberal Senators believe it should be amended to reflect the Bill's actual content and intended purpose.

Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) Rules

1.3 The EM to the Bill notes that the detail of the reform to the remittance sector will be contained in the AML/CTF Rules which will be developed in the future by AUSTRAC. This does not allow stakeholders and others to make an informed judgement as to the merits of these Rules and how they will function together with the

Bill. It is vital that, until all these Rules are made public and available for consideration, the Bill should not commence.

AUSTRAC intelligence sharing

1.4 The importance of memoranda of understanding (MOUs) for appropriate intelligence sharing between government agencies is reflected in the fact that AUSTRAC establishes MOUs with all government agencies. Therefore, it is disappointing that the MOUs between AUSTRAC and the new 'designated agencies' included in the Bill may not be agreed until months after the commencement of the Bill. The Bill should not commence until appropriate MOUs are agreed between AUSTRAC and these agencies.

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Regulatory burden

1.5 The Regulatory Impact Statement included in the EM suggests that the Bill will create some efficiencies for the remittance sector. However, the provisions of the Bill appear intended to merely shift compliance requirements and costs onto the providers of large remittance networks. Important questions remain as to the cost of compliance with the new registration requirements for providers of remittance services. To avoid unnecessary regulatory burdens on businesses, further clarity is required regarding how the new regulatory scheme, and particularly the AML/CTF Rules, will affect existing businesses and whether the new regulatory scheme creates savings or merely shift costs within the remittance sector.

Scrutiny of Bills Committee

1.6 On 2 March 2011, the Senate Scrutiny of Bill Committee released an Alert Digest which included consideration of the Bill. The Committee highlighted a number of areas of concern with the Bill and sought the Attorney-General's response in relation to these issues. Liberal Senators consider that it is more than disappointing

that the Attorney-General's Department could not provide specific responses during this inquiry to the areas of concern which the Senate Scrutiny of Bills Committee has highlighted. Answers to these serious concerns are needed before the Bill is passed.

Recommendation 1

1.7 The Senate should pass the Bill, subject to the following matters being addressed:

" the misleading title of the Bill;

" the public release and consideration of the Anti-Money Laundering and Counter-Terrorism Financing Rules;

" the establishment of appropriate memoranda of understanding for the sharing of intelligence between Australian Transaction Reports and Analysis Centre and the new designated agencies;

" a reassessment of the regulatory burden imposed by the Bill on businesses in the remittance sector and a clarification as to whether the proposed changes create efficiencies or merely shift costs within the sector; and

" the areas of concern highlighted by the Senate Scrutiny of Bills Committee.

Senator Stephen Parry Senator Guy Barnett

Deputy Chair

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APPENDIX 1

SUBMISSIONS RECEIVED

Submission Number Submitter

1 ING Direct

2 Australian Privacy Foundation and Privacy International

3 Liberty Victoria

4 Australian Institute of Criminology

5 Office of the Australian Information Commissioner

6 Australian Crime Commission (ACC)

7 Confidential

8 Victoria Police

9 NSW Police Force

10 Ms Marilyn Shepherd

ADDITIONAL INFORMATION RECEIVED

1 Answer to question on notice provided by the Attorney-General's Department on 19 March 2011

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APPENDIX 2

WITNESSES WHO APPEARED BEFORE THE COMMITTEE

ATKINS, Ms Liz, Executive General Manager, Intelligence, AUSTRAC

COLES, Mr Anthony, Assistant Secretary, Border Management and Crime Prevention Branch, Attorney-General's Department

GOODRICK, Mr Timothy, Director, Financial Crime Section, Attorney-General's Department

JAMIESON, Ms Angela, General Manager, Supervision, AUSTRAC

OUTRAM, Mr Michael, Executive Director, Serious Organised Crime, Australian Crime Commission

ROSS, Mr David, Acting National Manager, Performance and Governance, Australian Crime Commission

SANDS, Mi- Alistair, Director, Intelligence, AUSTRAC

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The Senate

Legal and Constitutional Affairs

Legislation Committee

Commonwealth Commissioner for Children and Young People Bill 2010

May 2011

373

ISBN: 978-1-74229-451-3

This document was printed by the Senate Printing Unit, Department of the Senate, Parliament House, Canberra.

MEMBERS OF THE COMMITTEE

Members

Senator Patricia Crossin, Chair, ALP, NT

Senator Guy Barnett, Deputy Chair, LP, TAS

Senator Mark Fumer, ALP, QLD

Senator Scott Ludlam, AG, WA

Senator Stephen Parry, LP, TAS

Senator Louise Pratt, ALP, WA

Substitute Member

Senator Sarah Hanson-Young, AG, SA, replaced Senator Scott Ludlam for the Committee's inquiry into the Commonwealth Commissioner for Children and Young People Bill 2010

Secretariat

Ms Julie Dennett

Ms Christine McDonald

Ms Kyriaki Mechanicos

Ms Victoria Robinson-Conlon

Mr Hugh Griffin

Suite SI.61

Parliament House

CANBERRA ACT 2600

Committee Secretary

Inquiry Secretary

Senior Research Officer

Research Officer

Administrative Officer

Telephone: (02) 6277 3560

Fax: (02) 6277 5794

Email: legcon.sen@aph.gov.au

iii

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Table of Contents

MEMBERS OF THE COMMITTEE .......................................... iii

ABBREVIATIONS........................................................................................................ix

CHAPTER 1

Introduction................................................................................................................1

Purpose of the Bill....................................................................................................1

Conduct of the inquiiy............................................................................................. 2

Acknowledgement....................................................................................................2

Note on references....................................................................................................2

CHAPTER 2

Overview of the Bill....................................................................................................3

Background....................................................................................... 3

Main provisions of the Bill...................................................................................... 7

CHAPTER 3

Main issues regarding the purpose and general provisions of the Bill .............. 11

Need for a Commonwealth Commissioner for Children and Young People ...... 11

Establishment of the Commission..........................................................................16

Definition of children and young people...............................................................21

Object and principles of the Bill............................................................................24

Australia's international obligations......................................................................26

Interaction with state and territory commissioners and guardians ....................... 27

Independence of the office and reporting requirements........................................32

Other issues 36

CHAPTER 4

Main issues regarding the functions and powers of the Commonwealth Commissioner.............................................................................................................39

Monitoring and examining legislation, policies and programs.............................39

Coordinating functions...........................................................................................41

Intervening in legal cases.......................................................................................42

Promotion and public education.............................................................................44

Engaging children and young people and wider consultation...............................45

A focus on vulnerable children and young people ................................................ 47

Guardianship of unaccompanied minors................................................................54

Reporting and recommendations............................................................................59

Research...................................................................................................................60

Receiving complaints............................................................................................. 60

Other suggested functions......................................................................................62

CHAPTER 5

Committee view and recommendations..................................................................63

The need for a commissioner for children and young people...............................63

Model and structure.................................................................................................63

Definition of children and young people................................................................63

Interaction with state and territory commissioners and guardians ....................... 64

Independence and reporting requirements.............................................................64

Functions and powers ............................................................................................. 65

Conclusion...............................................................................................................67

DISSENTING REPORT BY THE AUSTRALIAN GREENS ....................... 69

Introduction.............................................................................................................69

Concerns with the Bill............................................................................................70

Conclusion...............................................................................................................71

vi 378

APPENDIX 1

Submissions and additional information received by the committee ............... 73

APPENDIX 2

Witnesses who appeared before the committee ................................................... 79

APPENDIX 3

Role of Australian Commissioners for Children and Child Guardians ........... 81

VII

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ABBREVIATIONS

ACCG Australian Children's Commissioners and Guardians

ACCM Australian Council on Children and the Media

ACWA Association of Children's Welfare Agencies

AHRC Australian Human Rights Commission

AHRC Act Australian Human Rights Commission Act 1986

ALSWA Aboriginal Legal Service of Western Australia

AMA Australian Medical Association

ATSILS Aboriginal and Torres Strait Islander Legal Service

ARACY Australian Research Alliance for Children and Youth

AY ACAustralian Youth Affairs Coalition

BillCommonwealth Commissioner for Children and Young People Bill 2010

CAAH Centre for the Advancement of Adolescent Health

CAFWAA Child and Welfare Agencies Association

CAPRA Child Abuse Prevention Research Centre

ChilOutChilOut - Children Out of Immigration Detention

COAG Council of Australian Governments

Commonwealth Commissioner

Commonwealth Commissioner for Children and Young People

CRC Convention on the Rights of the Child

CRPD Convention on the Rights of Persons with Disabilities

CSSA Catholic Social Services Australia

DIACDepartment of Immigration and Citizenship

ECA Early Childhood Australia

EM Explanatory Memorandum

381

FaHCSIA Department of Families, Housing, Community Services and Indigenous Affairs

HRLRC Human Rights Law Resource Centre

IGOC Act Immigration (Guardianship of Children) Act 1946

Law Council Law Council of Australia

LIV Law Institute of Victoria

MYAN Multicultural Youth Advocacy Network

NACLCNational Association of Community Legal Centres

NAPCAN National Association for Prevention of Child Abuse and Neglect

National Framework National Framework for Protecting Australia's Children 2009-2020

NCYLCNational Children's and Youth Law Centre

NDS National Disability Services

NGO Non-government organisation

NIFTeY National Investment for the Early Years

NSWNew South Wales

PIACPublic Interest Advocacy Centre

SNAICCSecretariat of National Aboriginal and Islander Child Care

UK United Kingdom

UN United Nations

UNHCRUnited Nations High Commissioner for Refugees

WEAVEWomen Everywhere Advocating Violence Eradication

YACYouth Advocacy Centre

YACVicYouth Affairs Council of Victoria

YMCA Young Men's Christian Association

2003 BillA Better Future for Our Kids Bill 2003

2008 Bill National Commissioner for Children Bill 2008

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CHAPTER 1

Introduction

Purpose of the Bill

1.1 The Commonwealth Commissioner for Children and Young People Bill 2010 (the Bill), a private senator's bill, was originally introduced into the Senate in the 42nd Parliament on 12 May 2010, by Senator Sarah Hanson-Young. Following the commencement of the 43ld Parliament, Senator Hanson-Young reintroduced the Bill on 29 September 2010. On 30 September 2010, on the recommendation of the Senate

Selection of Bills Committee, the Senate referred the Bill to the Senate Community Affairs Legislation Committee for inquiry and report by the last sitting day in May 2011.

1.2 The Selection of Bills Committee gave the following reason for referral:

To look at implementing a properly-resourced Federal independent statutory body to oversee the rights of young Australians with the powers to ensure recognition of their needs and views.1

1.3 On 26 October 2010, the Senate varied its order of 30 September, to refer the Bill to the Senate Legal and Constitutional Affairs Legislation Committee, with the same reporting date.

1.4 The purpose of the Bill is to establish an independent statutory office of the Commonwealth Commissioner for Children and Young People. The purpose of this office will be to recognise and advocate for the rights and needs of children and young people in Australia, and ensure that Australia's domestic and international human rights obligations are upheld,2

1.5 The Explanatory Memorandum states that the establishment of a

Commonwealth Commissioner for Children and Young People (Commonwealth Commissioner) will 'help move the approach beyond a narrow focus only on neglect and abuse to encompass broader concepts of overall safety and wellbeing for children and young people.' It is intended that the Commonwealth Commissioner will:

" advocate for the needs, rights and views of people under the age of 18, at a national level;

" monitor the development of laws affecting children and young people;

1 Senate Selection of Bills Committee, Report No. 11 of2010, 30 September 2010, Appendix 7.

2 Explanatory Memorandum, Commonwealth Commissioner for Children and Young People Bill 2010 (EM), p. 1; and Senator Sarah Hanson-Young, Senate Hansard, Second Reading Speech, Commonwealth Commissioner for Children and Young People Bill 2010, 29 September 2010, pp 278-279.

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" coordinate related policies, programs and funding; and

" proactively engage children and young people in decisions that affect them.3

1.6 The establishment of the Commonwealth Commissioner is also intended to assist Australia in meeting its obligations under the United Nations Convention on the Rights of the Child by providing clear minimum human rights standards, based in legislation, for the wellbeing of children and young people in Australia.4

1.7 It is estimated that the establishment of the Commonwealth Commissioner will involve a financial cost for administrative purposes.5

Conduct of the inquiry

1.8 The committee advertised the inquiry in The Australian newspaper, and wrote to 121 organisations and individuals, as well as the Commonwealth and state and territory governments inviting submissions by 15 December 2010. Details of the inquiry, the Bill and associated documents were placed on the committee's website.

1.9 The committee received 93 submissions which are listed at appendix 1. Submissions were placed on the committee's website for ease of access by the public.

1.10 The committee held two public hearings in Canberra on

29 and 30 March 2011. A list of witnesses who appeared at the hearings is at appendix 2 and copies of the Hansard transcript are available through the internet at http ://aph. gov.au/hansard.

Acknowledgement

1.11 The committee thanks the organisations and individuals who made submissions and gave evidence at the public hearings.

Note on references

1.12 References in this report are to individual submissions as received by the committee, not to a bound volume. References to the committee Hansard are to the proof Hansard: page numbers may vary between the proof and the official Hansard transcript.

3 EM, p. 1.

4 EM, p. 1.

5 EM, p. 1.

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CHAPTER 2

Overview of the Bill

2.1 This chapter provides a brief background to the Commonwealth

Commissioner for Children and Young People Bill 2010 (the Bill), and then outlines the main provisions of the Bill.

Background

The concept

2.2 The concept of a national commissioner for children and young people is not new *the idea has been canvassed by community organisations and children's advocacy groups for a number of years. The introduction of a commissioner was also a unanimous recommendation arising out of the Senate Community Affairs

References Committee report, Forgotten Australians: A report on Australians who experienced institutional or out-of-home care as children .1

Previous legislation

2.3 A national children's commissioner has also been the subject of two previous pieces of proposed legislation. While neither of the proposed bills proceeded, it is worth noting the purpose of those bills.

2.4 In 2003, the private member's bill, A Better Future for Our Kids Bill 2003 (the 2003 Bill), was introduced into the House of Representatives by Ms Nicola Roxon MP. However, the 2003 Bill did not proceed beyond the first reading. The 2003 Bill provided for the establishment of National Commissioner for Children and Young People. The purpose, objects and functions of the commissioner proposed in the 2003 Bill were similar to those in the current Bill. However, the 2003 Bill

proposed the establishment of an Advisory Committee on Children to advise the commissioner. It also provided two additional functions for the commissioner:

" establishing a 'working with children' check, to apply across Australia where adults had unsupervised care of children; and

" developing a national code for the protection of children.2

1 Senator Andrew Murray, Senate Hansard, Second Reading Speech, National Commissioner for Children Bill 2008, 18 March 2008, p. 1109; Australian Human Rights Commission (AHRC), An Australian Children's Commissioner: Discussion Paper, October 2010, p. 2; and Senate Community Affairs References Committee, Forgotten Australians: A report on Australians

who experienced institutional or out-of-home care as children, August 2004, p. 238.

2 The Hon. Nicola Roxon MP, House Hansard, First Reading Speech, A Better Future for Our Kids Bill 2003, 26 May 2003, p. 14833.

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2.5 In 2008, Senator Andrew Bartlett, introduced a private senator's bill, the National Commissioner for Children Bill 2008 (the 2008 Bill) which proceeded to the second reading stage, but lapsed at the end of the Parliament. The 2008 Bill also provided for the establishment of a National Commissioner for Children and Young People. Again the purpose, objects and functions of the commissioner proposed in the 2008 Bill were similar to those in the current Bill. The 2008 Bill also provided for the establishment of an Advisory Committee on Children and a National Code for the Protection of Children (incorporating a national working with children check), as proposed in the 2003 Bill.3

International obligations

2.6 The United Nations (UN) General Assembly adopted the Convention on the Rights of the Child (CRC) in November 1989. The CRC frames the rights of children and sets minimum standards that governments must meet in providing services and assistance to children.4

2.7 The CRC was ratified by Australia in 1990 and, as a result, Australia has particular obligations regarding children under international law. Since that time, offices of commissioners or guardians for children and young people have been

established in various states and territories.5

2.8 Under the CRC, Australia is required to report to the UN about the state of children's rights every 5 years. This report is usually coordinated by the Commonwealth Attorney-General's Department in consultation with state and territory governments and other relevant Commonwealth departments and agencies.6

2.9 The Australian Human Rights Commission (AHRC) has noted concerns expressed by the United Nations Committee on the Rights of the Child that there is currently no national commissioner to monitor the rights of children in Australia, and there is no dedicated children's rights unit within the AHRC.7

3 Explanatory Memorandum, National Commissioner for Children Bill 2008 (EM), pp 1-2; and Senator Andrew Murray, Senate Hansard, Second Reading Speech, National Commissioner for Children Bill 2008, 18 March 2008, p. 1109.

4 AHRC, An Australian Children's Commissioner: Discussion Paper, October 2010, pp 2-3.

5 AHRC, An Australian Children's Commissioner: Discussion Paper, October 2010, pp 2-3; and Alister Lament and Prue Holzer, Children's commissioners and guardians, National Child Protection Clearing House Resource Sheet, July 2010, p. 1.

6 AHRC, Australia's commitment to children's rights and reporting to the UN, October 2007, pp 2-3.

7 AHRC, An Australian Children's Commissioner: Discussion Paper, October 2010, p. 3.

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___________________________________________________________________________________5_

Children's commissioners and guardians in other jurisdictions

2.10 In Australia, all states and territories have a commissioner or guardian for children and young people. However, the role and responsibility of the commissioner or guardian varies considerably across jurisdictions, as evidenced by the summary table in appendix 3.8

2.11 National commissioners for children have been appointed in other countries around the world, including: Norway, New Zealand, Sweden and the United Kingdom.9

Current responsibility for the protection of children

2.12 Both levels of government have a role in protecting children's rights. The Commonwealth Government is responsible for Australia's obligations under the CRC, and some policies and services within the Commonwealth's remit affect children and young people, such as income support, immigration and family law.10

2.13 Statutory child protection is currently a state and territory government responsibility. States and territories also have responsibility for the provision of services such as health and education.11

National Framework for Protecting Australia's Children

2.14 The National Framework for Protecting Australia's Children 2009-2020 (the National Framework), was endorsed by the Council of Australian Governments (COAG) on 30 April 2010. It was developed by a dedicated Working Group of the

Community and Disability Services Ministerial Advisory Committee, which undertook an extensive consultation process involving the states and territories, nonâ government organisations, academics, child protection practitioners, carers and young people.12

8 AHRC,T/? Australian Children's Commissioner: Discussion Paper, October 2010, p. 8.

9 Senator Sarah Hanson-Young, Senate Hansard, Second Reading Speech, Commonwealth Commissioner for Children and Young People Bill 2010, 29 September 2010, pp 278-279; and AHRC, An Australian Children's Commissioner: Discussion Paper, October 2010, p. 9.

10 AHRC,T?i Australian Children's Commissioner: Discussion Paper, October 2010, pp 5 and 8.

11 Senator Sarah Hanson-Young, Senate Hansard, Second Reading Speech, Commonwealth Commissioner for Children and Young People Bill 2010, 29 September 2010, pp 278-279; AHRC, An Australian Children's Commissioner: Discussion Paper, October 2010, pp 5 and 8; and Australian Government, Protecting Children is Everyone's Business: National Framework for Protecting Australia's Children 2009-2020, 2009, p. 9.

12 Senator Sarah Hanson-Young, Senate Hansard, Second Reading Speech, Commonwealth Commissioner for Children and Young People Bill 2010, 29 September 2010, pp 278-279; and National Framework for Protecting Australia's Children 2009-2020, Factsheet 1: Understanding the approach, p. 1, http://www.childsafetv.qld.gov.au/cbild-protection/national- ffamework.html (accessed 24 March 2011).

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2.15 The National Framework is a national approach to protecting children, and recognises that the protection of children is more than a statutory child protection service. The Framework states that 'Australia needs to move from seeing "protecting children" merely as a response to abuse and neglect to one of promoting the safety and wellbeing of children *. The National Framework suggests that a public health model approach with a focus on early intervention is appropriate.13

2.16 The National Framework recognises that the protection of children is a shared responsibility across parents, families, communities, non-government organisations, business and all levels of government. The Commonwealth Government has worked

closely with states and territories in developing the Framework. While it is envisaged that the National Framework will deliver an integrated response, it is not intended that the responsibilities of governments will change. State and territory governments will retain responsibility for statutory child protection, and the Commonwealth Government will retain responsibility for income support payments.14

2.17 As part of the National Framework, the government is exploring the potential role of a National Children's Commissioner. The National Framework will be implemented through a series of three-year action plans. The first three-year action plan, 2009-2012, identified twelve national priorities, including 'advocating nationally for children and young people'. This national priority is about exploring the potential to establish an Australian Commissioner for Children and Young People.15 Progress

on this priority was reported on in the Annual Report to the Council of Australian Governments 2009-10 * Protecting Children is Everyone's Business: National Framework for Protecting Australia's Children 2009-2020, as follows:

The Commonwealth Department of Families, Housing, Community Services and Indigenous Affairs has continued to consult with key stakeholders, including existing State and Territory commissioners and guardians, state and territory governments, and the community, particularly children themselves, on the potential for an Australian Commissioner for Children and Young People. In early 2010, the department concluded consultations and provided advice to the Commonwealth Government for consideration.16

13 Australian Government, Protecting Children is Everyone's Business: National Framework for Protecting Australia's Children 2009-2020, 2009, pp 5-9.

14 Australian Government, Protecting Children is Eveiyone's Business: National Frameworkfor Protecting Australia's Children 2009-2020, 2009, pp 5-9.

15 Senator Sarah Hanson-Young, Senate Hansard, Second Reading Speech, Commonwealth Commissioner for Children and Young People Bill 2010, 29 September 2010, pp 278-279; and National Framework for Protecting Australia's Children 2009-2020, Factsheet 1: Understanding the approach, p. 2, http://www.childsafetv.ald.gov.au/child-protection/national- framework.html (accessed 24 March 2011).

16 Australian Government, Annual Report to the Council of Australian Governments 2009-10 * Protecting Children is Everyone *s Business: National Framework for Protecting Australia *s Children 2009-2020, 2010, pp 28 and 31.

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___________________________________________________________________________________________ 7

Main provisions of the Bill

2.18 The main provisions of the Bill are outlined below.17

Part 1 - Preliminary

2.19 Part 1 provides for the date of commencement, the object and underlying principles, definition of terms, and the extent of the application of the legislation.

2.20 The object of the Bill is for provided for in clause 3: to establish a

Commonwealth Commissioner for Children and Young People (Commonwealth Commissioner) as an independent statutory office. In summary, clause 3 states that the Commonwealth Commissioner will:

" advocate for the needs, views and rights of people under the age of 18, at a national level;

" monitor the development and application of laws affecting children and young people;

" at a national level, coordinate relevant policies, programs and funding; and

" proactively engage children and young people in decisions which affect them.

2.21 Clause 3 also specifies that the establishment of the Commonwealth Commissioner is intended to assist Australia in meeting is obligations under the UN CRC, particularly identifying the following articles of the CRC:

" Article 2: non-discrimination in the applicability of children's rights;

" Article 4: the primacy of the consideration of the child's best interests;

" Article 6(1): the child's right to survival and development; and

" Article 12: the child's right to participation in decision-making.

2.22 Clause 4 identifies the particular principles of the CRC which apply to the Commonwealth Commissioner in exercising powers and undertaking duties as Commissioner. These include: supporting the family as having the primary responsibility for raising children and then development; valuing children as members of society; children's right to be protected from abuse, exploitation and discrimination, and to form and express views and have these taken into account; and having a child's best interest as a primary concern when making decisions.

2.23 Clause 5 provides that the term 'children and young people' includes all people below the age of 18 years.

17 The information in this section is taken largely from the Explanatory Memorandum to the Bill, and the Bill itself. See EM and Commonwealth Commissioner for Children and Young People Bill 2010.

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2.24 Clause 6 and 7 provide that the Act is not intended to 'exclude or limit' the operation of similar state or territory legislation which can operate concurrently with the Act, and that the Act will apply to all external territories.

Part 2 - Office o f the Commonwealth Commissioner for Children and Young People

2.25 Part 2 provides for the establishment of the Office of the Commonwealth Commissioner for Children and Young People, as well as the functions, powers and operation of the Commonwealth Commissioner.

2.26 Clause 8 provides that the office will be constituted as a statutory agency, and will consist of the Commonwealth Commissioner, a Deputy Commissioner if necessary and staff as provided for in Part 3.

2.27 The functions and powers of the Commonwealth Commissioner are provided for in clause 9, and relate to all children and young people in Australia regardless of their citizenship or residency status. In addition to the objects outlined under clause 3, some of the key functions of the Commonwealth Commissioner include:

" reviewing existing laws, proposing new policies, conducting research, undertaking inquiries and reporting to Parliament;

" promoting and protecting the rights of children and young people in immigration detention, and where appropriate, acting as the legal guardian of unaccompanied minors who arrive in Australia without the requisite visa;

" promoting public education programs about, and investment in, early childhood development; and

" intervening in legal cases involving the rights of children and young people.

2.28 Clause 10 provides that in carrying out the aforementioned functions, the Commonwealth Commissioner must:

" consult with children and young people, their parents and guardians, educators, relevant Commonwealth agencies, state and territory bodies and other organisations;

" adopt work practices which ensure that the office is accessible to children and young people and encourages their participation;

" take into consideration the concerns, views and wishes of children and young people; and

" refer any individual matters to the appropriate authority.

2.29 The independence of the Commonwealth Commissioner is provided for under clause 11, which specifies that the Commonwealth Commissioner is not under the

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control or direction of the minister, and may report to Parliament on any matter related to his or her functions.

2.30 Clause 12 provides that the Commonwealth Commissioner is to work cooperatively with other Commonwealth agencies which provide or manage services, on issues affecting children and young people. The clause also specifies that the Commonwealth Commissioner must consult with state and territory governments to develop agreements regarding the cooperation and interaction of the office of the Commonwealth Commissioner and the relevant state and territory bodies.

Part 3 -Appointments and staffing for the Office o f the Commissioner

2.31 Part 3 provides for the appointment of the Commonwealth Commissioner and one or more Deputy Commissioners, as well as the engagement of required staff and consultants.

2.32 Clauses 13-21 provide that the Commonwealth Commissioner is appointed by the Governor-General, and that the Commissioner's term of office must not exceed five years. The terms and conditions of the Commonwealth Commissioner's employment are also specified in these clauses, and provision is made for the appointment of an Acting Commissioner in the absence of the Commonwealth

Commissioner, or in the event of vacancy of the position.

2.33 The Governor-General may appoint one or more Deputy Commissioners to assist the Commonwealth Commissioner under clause 22.

Part 4 - Other Matters

2.34 Part 4 outlines the Commonwealth Commissioner's reporting obligations as well as the protections afforded to the Commonwealth Commissioner, and provides for a review of the Act's operation, and for the making of regulations.

2.35 Clause 25 stipulates that the Commonwealth Commissioner is responsible for preparing reports on behalf of Australia to the United Nations Committee on the Rights of the Child. In preparing the report, the Commonwealth Commissioner is to consult with Commonwealth agencies, state and territory bodies and non-government

organisations. The Commonwealth Commissioner is to provide the report to the minister, who must transmit it to the Secretary-General of the United Nations as soon as practicable. The clause also states that nothing prevents the minister from preparing

and submitting other reports to the UN Committee on the Rights of the Child on behalf of Australia.

2.36 Under clause 26 the Commonwealth Commissioner must prepare an annual report on the operations of the office for that year which must be presented to the minister and tabled in Parliament.

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2.37 Clause 27 requires that a review of the Act be undertaken two years after the Act commences. A written report regarding the review must be prepared and tabled in Parliament.

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CHAPTER 3

Main issues regarding the purpose and general provisions of the Bill

3.1 This chapter examines the main issues canvassed during the committee's inquiry regarding the purpose of the Commonwealth Commissioner for Children and Young People Bill 2010 (the Bill), and its general provisions. The principal matters raised in the evidence regarding these issues concerned:

" whether there is a need for a Commonwealth Commissioner for Children and Young People (Commonwealth Commissioner), and if the Bill addresses any such need;

" how the Commission should be established;

" how children and young people should be defined;

" the object and principles underlying the Bill;

" Australia's international obligations regarding children's rights;

" how the Commonwealth Commissioner might interact with state and territory commissioners and guardians;

" the independence of the Commonwealth Commissioner and the

reporting requirements specified in the Bill.

3.2 Issues raised regarding the functions and powers of the Commonwealth Commissioner (principally matters arising under clauses 9 and 10), are discussed in chapter 4.

Need for a Commonwealth Commissioner for Children and Young People

3.3 The majority of submissions supported the establishment of a Commonwealth Commissioner. While numerous submitters raised issues with the Bill itself, and suggested a series of amendments, submitters widely endorsed the creation of a Commonwealth Commissioner for reasons ranging from the need to protect vulnerable children, to requirements under international obligations.

3.4 Many submitters expressed support for the establishment of a Commonwealth Commissioner due to concerns about the rights and treatment of vulnerable children. Submitters noted that the establishment of a Commonwealth Commissioner would

ensure recognition of, and play a role in protecting, the needs and rights of all

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children, enhance service delivery, and provide a much needed advocate for children and young people, who are limited in their ability to advocate for themselves.1

3.5 The Human Rights Law Resource Centre (HRLRC) explained that the need for a Commonwealth Commissioner is evidenced by :

...the fact that children and young people often lack the ability to effectively advocate for themselves or to independently engage with the political or legal system. They cannot vote for their political representatives, are not usually well resourced and are often not consulted in the formulation of

laws or policies, even those that directly affect them.2

3.6 Submitters also noted that there is a continuing need to ensure accountability of the services to vulnerable children and young people, particularly those in out-ofâ home care, in the child protection system, and those in detention. The Ombudsman Victoria explained that in 2010 he had tabled three reports regarding the failure of public bodies to act in compliance with the Charter of Human Rights and Respo77sibilities Act 2006 in relation to vulnerable children and young people. As a result of his investigations in each case, he found that accountability is lacking in relation the services provided to vulnerable children and young people.3

3.7 Many submitters were of the view that a Commonwealth Commissioner is required, as responsibility for a number of the issues affecting the wellbeing of children and young people lie within the Commonwealth's jurisdiction. For example in the areas of family law, immigration, indigenous affairs and social security, state and territory children *s commissioners and guardians have limited influence. Submitters also noted that Commonwealth oversight is required as 'responsibility for policy development, law reform and service delivery is divided across federal, state and local government as well as between government and community sectors.'4

3.8 Ms Anna Schulze from Save the Children Australia, acknowledged the role played by existing state and territory commissioners and guardians, however put the view that an overarching Commonwealth Commissioner is needed:

Whilst a number of our states and territories already have a form of children *s commissioner or guardian, they vary in their roles and powers. They do not have the mandate to deal with children *s issues at a federal or

1 See for example: Mallesons Stephen Jaques Human Rights Law Group, Submission 80, pp 4-6; South Australian Child and Family Health Nurses Association, Submission 73, pp 1-2; Humanist Society of Victoria, Submission 37, pp 2-3; St Vincent de Paul Society, Submission 31, pp 1-3; Mr Thomas Colley, Submission 2, p. 1; Ms Grace Gorman, Submission 3, p. I; Mr George Winston AM, Submission 5, p. 1; Ms Jean Jordan, Submission 6, p. 1; Mr Rodney Selden, Submission 7, p. 1; Ms Sue Hoffman, Submission 8, p. 1; and Australian Human Rights Commission (AHRC), Submission 50, p. 1.

2 Human Rights Law Resource Centre (HRLRC), Submission 51, p. 2.

3 Ombudsman Victoria, Submission 11, pp 1-2; and AHRC, Submission 50, p. 7.

4 Mallesons Stephen Jaques Human Rights Law Group, Submission 80, p. 6.

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international level and they have no coordinating body or authority to drive national consistency. Most significantly, they do not cover all children, notably those in immigration detention.5

3.9 In addition to arguments that a Commonwealth Commissioner will assist in addressing gaps in the human rights of children in Australia and will assist in meeting our international obligations under the United Nations (UN) Convention on the Rights of the Child (CRC), submitters suggested that the establishment of a Commonwealth Commissioner will provide national leadership and improve coordination across jurisdictions.6

3.10 Submitters observed that many inquiries have recommended the establishment of a children's commissioner, and that the establishment of a commissioner has been advocated for by various stakeholders. Families Australia further commented that the establishment of a Commonwealth Commissioner will bring Australia 'into line with practice in many other countries, such as New Zealand, Norway, Sweden and

England'.7

3.11 It was noted that the Australian Human Rights Commission (AHRC) has 'specific legislative functions and responsibilities for the protection and promotion of human rights, and monitoring Australia's compliance with its international human rights obligations via public education, inquiries and complaints', and considers obligations under the CRC. However, the AHRC is not specifically resourced for a

focus on children and young people.8

3.12 Further, submitters commented that the UN Committee on the Rights of the Child has noted the absence of a national commissioner for children in Australia.9 As the AHRC explained:

5 Ms Anna Schulze, Director, Policy Research and Advocacy, Save the Children Australia, Committee Hansard, 30 March 2011, p. 1.

6 See for example: HRLRC, Submission 51, p. 3; Children's Hospitals Australasia, Submission 41, pp 1-2; Mr Tony Arch, Submission 1, pp 1-2; Ivanhoe Group of Amnesty International Australia, Submission 29, p. 1; Salvation Army, Submission 23, pp 3-4; Law Council of Australia, Submission 78, pp 6-7.

7 Families Australia, Submission 17, p. 6. See also: The Royal Australasian College of Physicians, Submission 77, p. 1; HRLRC, Submission 51, p. 3; Mission Australia, Submission 56, pp 4-5; Novita Children's Services, Submission 93, pp 3-4; Multicultural Youth Advocacy Network (MYAN), Submission 84, p. 3; and Australian Medical Association (AMA), Submission 88, p. 3. Such inquiries include: Australian Law Reform Commission, Seen and Heard: priority for children in the legal process', and Senate Community Affairs References Committee, Forgotten Australians: A report on Australians who experienced institutional or out-of-home care as children.

8 Youthlaw, Submission 27, p. 3.

9 See for example: Mission Australia, Submission 56, p. 4; The Benevolent Society, Submission 38, p. 3; Blind Citizens Australia, Submission 49, p. 2; Mallesons Stephen Jaques Human Rights Law Group, Submission 80, pp 4-6; and AHRC, Submission 50, pp 1 and 6.

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The United Nations Committee on the Rights of the Child has expressed concern that there is no national commissioner with a specific mandate for monitoring children *s rights in Australia. The Committee has also noted that despite the valuable work of the Australian Human Rights Commission

in the area of children *s rights there is no unit devoted specifically to children's rights at the Commission. Establishing a Commonwealth Commissioner for Children and Young People would be an important step towards meeting Australia's international obligations to protect and promote the rights of children in Australia.10 11

3.13 At the committee's public hearing, Ms Cate McKenzie, of the Department of Families, Housing, Community Services and Indigenous Affairs (FaHCSIA), informed the committee that the Government is currently considering the role of a National Children's Commissioner as a priority project under the first three-year

implementation plan for the National Framework for Protecting Australia's Children, which was agreed to by the Council of Australian Governments (COAG). Ms McKenzie noted that the first three-year period will end in September 2012, and it

is expected that the issue would 'have been resolved over the period of those three years'."

Adequacy o f the Bill

3.14 Despite support for the establishment of a Commonwealth Commissioner, some submitters questioned whether the framework provided in the Bill was appropriate. A number of submissions suggested amendments to the Bill to 'strengthen' and 'enhance' the operation, functions and powers of the Commonwealth Commissioner.12 Others suggested that further consultation on the Bill is required before it is passed, and that consultation with children in particular must be undertaken.13

3.15 It was contended by some submitters that while in their view the

establishment of a Commonwealth Commissioner is important, the proposed model

10 AHRC, Submission 50, p. 1.

11 Ms Cate McKenzie, Group Manager, Women and Children's Policy Group, Department of Families, Housing, Community Services and Indigenous Affairs (FaHCSIA), Committee Hansard, 30 March 2011, pp 30-31.

12 Australian Youth Affairs Coalition (AYAC)/ State and Territory Youth Peaks/ MYAN/ Centre for the Advancement of Adolescent Health (CAAH)/ headspace/ Inspire Foundation, Submission 86, p. 7; HRLRC, Submission 51, p. 1; Families Australia, Submission 17, p. 13; Law Council of Australia, Submission 78, p. 3; and National Children's and Youth Law Centre (NCYLC)/ Australian Research Alliance for Children and Youth (ARACY)/ UNICEF Australia/ National Association of Community Legal Centres (NACLC), Submission 79, p. 4.

13 See for example: Catholic Social Services Australia (CSSA), Submission 42, p. 2; Ms Gillian Calvert AO/ National Foundation for Australian Women/ National Investment for the Early Years (NIFTeY), Submission 24, p. 8; Save the Children Australia, Submission 57, p. 5; and NSW Government, Submission 91, pp 2-5.

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for the Commonwealth Commissioner outlined in the Bill should not proceed. These submitters argued that the role and functions provided in the legislation appear limited and are unlikely to provide the Commissioner with the required capacity, independence or scope to enable them to effectively carry out the proposed functions and secure the rights of children and young people in practice. As a result one submitter commented that the Bill remained 'symbolic rather than practical. That is,

it *s primary purpose seems to be compliance with UN charters as opposed to the provision of genuinely effective powers'.14 15

3.16 Some submitters did not support the Bill, claiming that some of the functions outlined in the Bill are not appropriate and potentially conflict with the powers provided in the Bill.13 Berry Street further noted:

The breadth of proposed functions and powers outlined in Division 2 Section 9 require independence of government, a requirement to represent and act on behalf of the government of the day...These distinct roles should

not be located with the one position.16

3.17 FamilyVoice Australia expressed concern that the overall approach of the Bill treats children as 'autonomous individuals', who are detached from the families they live with. In FamilyVoice Australia's view, this, in conjunction with the Commissioner's role in facilitating Australia's compliance with international obligations could mean that 'the Bill would potentially create a powerful government body that could act to undermine parental efforts to supervise the upbringing of their own children according to their best judgement'.17

3.18 The Humanist Society of Victoria espoused a different view, suggesting that a Commonwealth Commissioner:

...could oversee the formulation of universal guidelines which protect the rights of parents to bring up their children in ways which conform to their beliefs or traditions, while also protecting children against any harm.18

3.19 Notably a joint submission by the Australian Children's Commissioners and Guardians (ACCG), supported the creation of 'a national rights-based advocate for children and young people', on the condition that such an advocate would not

duplicate the roles and functions of state and territory commissioners and guardians.

14 Child Abuse Prevention Research Australia (CAPRA), Submission 35, pp 2 and 9. See also Berry Street, Submission 74, p. 2.

15 Ms Calvert AO/ National Foundation for Australian Women/ NIFTeY, Submission 24, p. 2; Australian Children's Commissioners and Guardians (ACCG), Submission 20, pp 1-3; Queensland Jurisdictional Response (Queensland Commission for Children and Young People and Child Guardian), Submission 58, pp 1-2; and Berry Street, Submission 74, pp 2-3.

16 Berry Street, Submission 74, pp 2-3.

17 FamilyVoice, Australia, Submission 18, pp 1-3. See also Australian Christian Lobby, Submission 65, pp 1-2.

18 Humanist Society of Victoria, Submission 37, p. 2.

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However, while noting the benefits such a role could have at a national level, the ACCG did not support the Bill, due to concern with some of the proposed functions, discussed further in chapter 4.19

Establishment of the Commission

Model

3.20 Submitters expressed a number of differing opinions on the best model for the Commonwealth Commissioner. Ms McKenzie of FaHCSIA explained to the committee that the types of model vary:

...we understand that you can look at various positions along the continuum from it being a rights based model right the way through to it being a public health and wellbeing based model. And you get different advantages and

disadvantages out of the various models.20

3.21 Some submitters argued that the Commonwealth Commissioner should take a rights-based approach rather than a welfare model approach which is predominantly concerned with child protection.21 The AHRC explained that a human rights

framework empowers children and young people as rights-holding citizens who can make a meaningful contribution and participate, as opposed to viewing them as the passive recipients of services and welfare. According to the AHRC, a rights-based

approach can:

...provide a clear framework for promoting, and for ensuring accountability in respect of, child wellbeing. Human rights outline the minimum standards necessary to ensure the wellbeing of children - including the right to an

adequate standard of living, the right to health care, the right to education, the right to family life, the right to protection from violence, and the right to participate in one *s culture.22

3.22 Conversely, the limitations of a rights-based framework were highlighted in evidence to the committee:

Rights tend to address legally established minimums. One of the consequences of using a rights-based framework is the tools and instruments that flow from the use of the language and legislation ultimately operate within a legal framework...Further, families, parents, guardians and other important carers in a child or young person *s life can

feel marginalised when children *s rights are promoted. This approach can

19 ACCG, Submission 20, pp 1-3.

20 Ms McKenzie, FaHCSIA, Committee Hansard, 30 March 2011, p. 31.

21 NCYLC/ ARACY/ UNICEF Australia/ NACLC, Submission 79, pp 3 and 6-7; AHRC, Submission 50, pp 5-6; Berry Street, Submission 74, p. 3; National Welfare Rights Network, Submission 87, p. 1; and Queensland Jurisdictional Response (Queensland Commission for Children and Young People and Child Guardian), Submission 58, p. 3.

22 AHRC, Submission 50, pp 5-6.

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appear to ignore the others in the family group and some in the community feel it interferes with the important roles the family group plays in care, support, guidance, and decision-making.23

3.23 PeakCare argued for a family welfare model such as that adopted in Sweden and other European countries, as opposed to the current child protection model.24 Another submitter argued that a broader wellbeing framework would be the most

appropriate approach for the Commonwealth Commissioner. This was described as follows:

The wellbeing of children and young people includes their care, development, education, health and safety and covers their physical, mental, emotional and spiritual life. The perspective is about seeing children as citizens, not as problems that need to be solved. It is an encompassing term that is wider than rights but is inclusive of rights.25

3.24 Other submitters commented that a broader approach, not dominated by either a legal/rights or a child protection/welfare approach, should be adopted.26 Further, some evidence received by the committee indicated these approaches can in fact complement each other: 'a comprehensive rights-based approach requires interdisciplinary work complemented by other mechanisms, such as the wellbeing approach.'27

3.25 Support was also expressed for a public health model, which places emphasis on early intervention to prevent abuse and neglect.28 It was noted that the public health model is identified as an appropriate approach in the National Framework for

Protecting Australia's Children, and was described to the committee as:

...a cascading set of sorted out roles and responsibilities between levels of government. In short, the public health model is really saying that there are three essential tiers of interventions and supports that we might give to

families, children and communities more broadly. At the top level is early intervention and prevention services *those things that might be universally applied in, say, public health type campaigns. At the secondary

level are the sorts of services that might be more targeted on specific family needs, and they could be family support type programs delivered by, say,

23 Ms Calvert AO/ National Foundation for Australian Women/ NIFTeY, Submission 24, pp 1-2.

24 PeakCare, Submission 28, p. 1.

25 Ms Calvert AO/ National Foundation for Australian Women/ NIFTeY, Submission 24, p. 1. See also NCYLC/ ARACY/ UNICEF Australia/ NACLC, Submission 79, pp 6-7.

26 Youth Legal Service, Submission 19, p. 4; National Council for Single Mothers and their Children, Submission 55, p. 2; and National Disability Services (NDS), Submission 54, p. 1.

27 NCYLC/ ARACY/ UNICEF Australia/ NACLC, Submission 79, p. 7.

28 See for example: Australian Association of Social Workers, Submission 44, p. 1; Families Australia, Submission 17, pp 6-7; NDS, Submission 54, p. 2; Secretariat of National Aboriginal and Islander Child Care (SNAICC), Submission 53, p. 3; and Young Men's Christian Association (YMCA), Submission 64, p. 5.

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local family or relationship service providers. The third level is the statutory level and really refers to the legislatively mandated responsibilities or statutory responsibilities, in this instance, of child protection authorities to act in accordance with state and territory law.29

3.26 Families Australia in particular advocated strongly for the Commonwealth Commissioner to reflect a public health model:

Specifically, the Commissioner ought to place strong emphasis on examining systemic issues impacting on children and young people and on promoting early intervention and prevention approaches based on a public

health model. Without such a high-level reference point, there may be a tendency for the balance in the Commissioner *s work to shift toward examination of specific cases, which would risk duplicating the work of the various State and Territory Commissioners or Children's Guardians30

Structure

3.27 Submitters supported the establishment of the commission as a statutory authority, in particular to ensure its independence.31 However, the committee received mixed evidence as to whether the Office of the Commonwealth Commissioner for Children and Young People should be established as a standalone office or as part of the AHRC.

3.28 Youth Legal Service noted their support for a Commission over a

Commissioner, to ensure the capacity to work across a number of policy areas including education, health, legal and social work, and recommended the development of a network of commission staff across Australia. In their view:

...the role is multifaceted, involving the dissemination of information across the full gamut of children *s services, thereby enabling the whole of government approach that is a critical component to enshrining children's rights into the national political spectrum.32

3.29 National Disability Services (NDS) suggested that the European model of an ombudsman or commissioner be drawn on to reflect the intent of the UN CRC, noting that the commissions currently in place in Australia do not reflect this intent.33

29 Mr Brian Babington, Chief Executive Officer, Families Australia, Committee Hansard, 29 March 201 l,p. 9.

30 Families Australia, Submission 17, pp 6-7.

31 Save the Children Australia, Submission 57, p. 3; Ms Calvert AO/ National Foundation for Australian Women/ NIFTeY, Submission 24, p. 5; and Youth Legal Service, Submission 19, p. 4.

32 Youth Legal Service, Submission 19, p. 6.

33 NDS, Submission 54, p. 1.

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3.30 Several submitters recommended that rather than an independent statutory office, the Office of the Commonwealth Commissioner for Children and Young People should be created within the AHRC. Berry Street supported an approach

similar to the Aboriginal and Torres Strait Islander Commissioner. Submitters also pointed out that if the Commonwealth Commissioner is created within the AHRC, the operating costs of the office would be reduced, however such a structure would necessitate amendment of the Australian Human Rights Commission Act 1986 (AHRC Act).34 35

3.31 The HRLRC noted that in 2002 the UN Committee on the Rights of the Child had recommended that the Human Rights and Equal Opportunity Commission, now the AHRC, 'be equipped to monitor the implementation of children's rights'.3:1 The

HRLRC outlined the benefits of the Commonwealth Commissioner being incorporated into the AHRC as follows:

a) the Children's Commissioner would benefit from the expertise of the other Commissioners, particularly where there are common functions and powers;

b) the Children's Commissioner would be able to work more readily in conjunction with the Aboriginal and Tones Strait Islander Social Justice Commissioner, the Disability Discrimination Commissioner, the Race Discrimination Commissioner and the Sex Discrimination Commissioner and Commissioner responsible for Age Discrimination where appropriate;

c) the likelihood of any overlap and duplication that may otherwise occur would be reduced.36

3.32 The Law Council of Australia (Law Council) noted further advantages in incoiporating the Commonwealth Commissioner into the AHRC, observing that if the Commissioner was created as a member of the AHRC, the provisions of the AHRC Act would apply, thereby negating some of the concerns held regarding the drafting of the provisions of the Bill. Further, it was observed that this model is adopted in the Australian Capital Territory, and appears to have 'merit'. However, the Law Council identified two possible disadvantages of this approach: firstly, the limited resourcing of the AHRC was noted; and secondly, the current practice of AHRC Commissioners acting in the role of other Commissioners, has been looked upon unfavourably by the United Nations Committee on the Elimination of Racial Discrimination. In light of

34 See for example: Beny Street, Submission 74, pp 2-4; ACCG, Submission 20, p. 3; HRLRC, Submission 51, p. 1; NSW Ombudsman, Submission 90, p. 1; National Council for Single Mothers and then- Children, Submission 55, p. 3; Law Council of Australia, Submission 78, pp 8-11. See also Ms Rosemary Budavari, Co-director, Criminal Law and Human Rights Unit, Law Council of Australia, Committee Hansard, 29 March 2011, pp 18-19.

35 HRLRC, Submission 51, p. 3.

36 HRLRC, Submission 51, p. 5.

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these advantages and disadvantages, the Law Council suggested the proposal warranted further consideration by the committee.37

3.33 The Law Council of Australia also commented that even if the Commissioner is not established within the AHRC, the series of more specific functions which apply to all members of the AHRC should apply. These AHRC functions include:

examining enactments and proposed enactments, undertaking and coordinating research and educational programs to promote human rights, intervening in legal proceedings where appropriate and on its own initiative, or where required by the minister, and suggesting potential laws or action to be taken by Parliament.38

3.34 The ACCG also cautioned that if the Commonwealth Commissioner was incorporated into the AHRC:

Care would need to be taken to ensure that the Australian Human Rights Commission's existing powers and functions regarding children and young people are not reduced or diminished, particularly as they relate to

complaint handling and intervention in Court proceedings.39

3.35 Ms Nicole Cardinal of Save the Children Australia addressed concerns raised regarding the creation of yet another commissioner, in addition to those already within the AHRC:

...while we appreciate that certain commissioners who exist within the Australian Human Rights Commission could cover certain issues for children, they could not cover all issues *particularly issues to do with education and health. Children are only able to make a complaint to the Australian Human Rights Commission on the basis of age, race and sex discrimination *there are huge gaps. We look at a children *s commissioner as being able to comprehensively take the Convention on the Rights of the Child and ensure that children have got a means of redress across all of those areas that impact their lives.40

3.36 The Australian Christian Lobby emphasised its preference for the Commonwealth Commissioner to be independent, and not 'subsumed' within the AHRC.41

3.37 Several witnesses before the committee were non-committal in their opinions as to whether the Commonwealth Commissioner should be housed within the AHRC, noting that the ability of the Commonwealth Commissioner to perform its functions was of more significance. As Ms Cardinal of Save the Children Australia explained:

37 Law Council of Australia, Submission 78, pp 8-10.

38 Law Council of Australia, Submission 78, pp 8-10 and 21.

39 ACCG, Submission 20, p. 3.

40 Ms Nicole Cardinal, Policy Research and Advocacy Adviser, Save the Children Australia, Committee Hansard, 30 March 2011, p. 3.

41 Australian Christian Lobby, Submission 65, p. 2.

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If it would make sense to have it in the Australian Human Rights

Commission then we support that. We think that it probably has more to do with the detail. As long as the commissioner has got adequate resources, adequate funding, a proper mandate and wide powers. If all of those characteristics are able to be encompassed within the Australian Human Rights Commission, then so be it. If it would in any way impact on their

independence or their ability to perform the role then we would be

advocating for a role very much outside of the Australian Human Rights Commission.42

Definition of children and young people

3.38 The definition of the term 'children and young people1 attracted comment with suggestions that it be extended to include those aged 25 years or younger in certain circumstances, in particular to encompass those children and young people leaving out-of-home care who are not yet independent.43

3.39 Berry Street noted that while the UN CRC provides that children and young people are those between the ages of 0 and 18 years, the UN definition of a child is a person under the age of 15, and youth are defined as those between the

ages of 15 and 24 years. Berry Street argued that it is 'critical' that the Commonwealth Commissioner's mandate should extend to include those aged 25 years as:

The Commonwealth has lead or sole responsibility for matters relating to higher education, housing, housing assistance, income support, primary health care, employment and labour market assistance. These are all areas within which young people aged 18 to 25 could benefit from the

independent analysis that a Commissioner could provide.44

3.40 Concern was raised that the definition of the term 'children and young people' is unclear, and could be inteipreted to apply to persons who are not below the age of 18 years. FamilyVoice Australia recommended that the definition be amended to clearly state that the Commissioner does not have powers in relation to young people

18 years of age or older.45

42 Ms Cardinal, Save the Children Australia, Committee Hansard, 30 March 2011, p. 4. See also Ms Catherine Branson, President and Human Rights Commissioner, AHRC, Committee Hansard, 30 March 2011, p. 23.

43 See for example: Barnardos, Submission 32, p. 1; Families Australia, Submission 17, pp 8-9; AYAC/ State and Territory Youth Peaks/ MYAN/ CAAH/ headspace/ Inspire Foundation, Submission 86, p. 11; CREATE Foundation, Submission 30, p. 2; Berry Street, Submission 74, p. 4; and SNAICC, Submission 53, p. 3.

44 Berry Street, Submission 74, p. 4.

45 FamilyVoice Australia, Submission 18, p. 4.

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3.41 Other submitters also supported the definition of children and young people as those under the age of 18 years.46 In evidence to the committee, Ms Schulze of Save the Children Australia explained:

We suggest for consistency with the Convention on the Rights of the Child that we should use the same definition of child, which is under 18. We also believe that there is a risk that, if the commissioner *s focus is extended to include youths up to the age of 25, the focus may shift to all of the issues that are significant with that group and detract from a focus on early

childhood and young children. We also recognise that there are significant issues and the day someone turns 18, particularly if they have been in contact with government in one form or another, to immediately say that

you are no longer afforded the protection of the children's commissioner. It would be a challenge and perhaps unfair, so we are able to be swayed.47

3.42 Blind Citizens Australia commented that this definition shouldn't preclude the Commonwealth Commissioner from 'addressing issues around the transition of young people to adulthood' as the needs of young people should not be 'forgotten or dismissed once a child turns 18'.48 49 50

3.43 The Law Council noted it supported the definition of children and young people as persons under the age of 18 years as provided for in the Bill, and that this is consistent with the relevant legislation in states and territories in relation to children's commissioners and guardians. However, it was noted that definitions in legislation in various state and territory jurisdictions do vary based on age. For example in

Queensland, the Youth Justice Act 1992 defines a child as a person under 17 years of age and has resulted in some 17 year old individuals being held in adult prisons in Queensland. The Law Council also observed that some states and territories make an age-based distinction between 'children' and 'young people', whereas the Bill does

. 49

not.

3.44 This was further substantiated by other submitters who noted that there is considerable variation across jurisdictions in relation to the age at which government assistance ceases for those young people transitioning from out-of-home care. It was noted that in one state, support is provided until the age of 25 years, while other states

'terminate assistance between 19 and 21 years'.30

46 National Association for Prevention of Child Abuse and Neglect (NAPCAN), Submission 47, p. 3; Save the Children Australia, Submission 57, p. 3; Ms Calvert AO/ National Foundation for Australian Women/ NIFTeY, Submission 24, p. 7; and Blind Citizens Australia, Submission 49, p. 3.

47 Ms Schulze, Save the Children Australia, Committee Hansard, 30 March 2011, p. 5.

48 Blind Citizens Australia, Submission 49, p. 3.

49 Law Council of Australia, Submission 78, p. 13.

50 Families Australia, Submission 17, pp 8-9. See also: Law Council of Australia, Submission 78, p. 13; and CREATE Foundation, Submission 30, p. 2.

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3.45 Families Australia recommended that the Commonwealth Commissioner should not ignore the needs and interests of people above the age of 18, in particular those who transition from out-of-home care to independent living, and those people who have been subjected to past abuses as children. In relation to the latter, Families Australia particularly mentioned the Stolen Generation, Forgotten Australians and former Child Migrants, and stated that it is:

...important that the Commissioner be empowered to play a role in relation to past abuses perpetrated on children. This may, for example, take the form of providing evidence to official inquiries or advising on policy matters where past practice is of relevance...51

3.46 Associate Professor Philip Mendes supported the Commonwealth Commissioner having responsibility for young people leaving out-of-home care until they reach at least 25 years of age. Professor Mendes noted that in the United Kingdom (UK), state authorities continue to take responsibility for the welfare of young people who have been in out-of-home care until they are at least 21 years old. Professor Mendes suggested that:

A national leaving care framework similar to the UK would arguably address a number of key weaknesses of the existing Australian system such as the wide variation in policy and legislation between the states and

territories, and the absence of support for young people who shift from one jurisdiction to another. It would also improve opportunities for national benchmarking, and place pressure on poorer services to improve their standards.52

3.47 In his submission, Professor Mendes argued that the transition from care should be flexible and gradual 'based on levels of maturity and skill development, rather than simply age'. In Professor Mendes' view it is not reasonable to expect care leavers to 'attain instant adulthood', Further Professor Mendes suggested the establishment of a national database to monitor care leavers and measure outcomes in key areas, and 'analyse differences in the effectiveness of various states and territories and NGO policies and programs'.53

3.48 Mr Julian Pocock, representing Berry Street, emphasised that policy in Australia does not effectively support young people, and consequently their needs should be within the remit of the Commonwealth Commissioner:

...young people between the ages of 18 and 25 are a group within the

Australian community for whom there are significant transitional issues as they move from dependence to independence. It is an area where Australia certainly has a long way to go in providing the right policy frameworks and assistance to ensure that all young people in that age bracket make a

51 Families Australia, Submission 17, pp 8-9.

52 Associate Professor Philip Mendes, Submission 14, pp 1-4.

53 Associate Professor Mendes, Submission 14, pp 4-5.

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successful transition to independence. So we believe the role of the commissioner should be extended to cover young people in that age bracket and should have a focus on matters that could assist them to make that transition to independence.54

Object and principles of the Bill

3.49 Various suggestions for refining the objects and principles of the Bill were received, with submitters suggesting that the provisions in this part of the Bill should be more focussed and detailed.

3.50 Some submitters argued that the provisions of the Bill should be consistent with the UN CRC obligations, have reference to additional articles of the CRC and its Optional Protocols, and some submitters even suggested that the text of the CRC be incorporated into the legislation itself.55

3.51 Families Australia and Children with Disability Australia made a number of suggestions to incorporate principles from various articles in the UN CRC into the objects and principles of the Bill. In particular, Families Australia advocated for specific reference to:

" the 'best interests' principle as outlined in article 3(1) of the UN CRC, and a definition linking the term to the UN CRC;56

" children's wellbeing and rights, in particular the wellbeing of Aboriginal and Torres Strait Islander children and young people, which 'draws upon the principles which were agreed in 2009 by all Australian Governments' in the National Framework for Protecting Australia's Children, to reflect the Australian context of the application of the UN CRC;57 and

54 Mr Julian Pocock, Director of Public Policy and Practice Development, Berry Street, Committee Hansard, 29 March 2011, p. 14. See also Mr Frank Hytten, Chief Executive Officer, SNAICC, Committee Hansard, 30 March 2011, p. 7.

55 Australian Council on Children and the Media (ACCM), Submission 52, p. 3; AMA, Submission 88, p. 2; Youthlaw, Submission 27, pp 2-3; National Welfare Rights Network, Submission 87, p. 1; YMCA, Submission 64, p. 7; Law Council of Australia, Submission 78, pp 11-13; and NCYLC/ ARACY/ UNICEF Australia/ NACLC, Submission 79, p. 7.

56 Families Australia, Submission 17, pp 12-13. This was also supported by Early Childhood Australia (ECA), Submission 26, p. 1; HRLRC, Submission 51, pp 10-11; SNAICC, Submission 53, p. 3; PeakCare, Submission 28, p. 2; and The Law Society of New South Wales, Submission 60, p. 2.

57 Families Australia, Submission 17, p. 10. See also: YMCA, Submission 64, p. 7; Australian Association of Social Workers, Submission 44, p. 1; SNAICC, Submission 53, p. 3; and Law Council of Australia, Submission 78, p. 12.

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" every child's entitlement to continuing contact with parents, and that separation of children and young people from their parents should only occur where it is in the best interests of the child,

3.52 A series of submitters suggested that the Bill should also particularly reference article 23 of the UN CRC and the UN Convention on the Rights of Persons with Disabilities (CRPD), article 7, regarding children with disabilities.58 59 Children with Disability Australia further submitted that a child's right to family under article 23 of the CRPD is vitally important and must be upheld, particularly as:

...families of children with disability are extremely strong advocates for their child, have an intimate knowledge and expertise regarding their child *s needs and wishes. The role of a National Children *s Commissioner should not negate this role but rather enhance and allow collaborative advocacy to occur which enhances the realisation of children *s rights and expression of their opinions and opportunities to participate.60

3.53 The committee also received suggestions that the object and principles should focus on vulnerable children and young people, particularly Aboriginal and Torres Strait Islander children and young people.61 In addition, it was recommended that the

object of the Bill should be to 'promote and advocate for the wellbeing of children and young people', and that this object be reflected throughout the Bill itself.62 The Child Abuse Prevention Research Centre (CAPRA) also suggested that reference be made to protecting children and young people.63

3.54 CAPRA further suggested that the principal functions of the Commonwealth Commissioner outlined in clause 3 be specified in more detail.64 65 Catholic Social Services Australia (CSSA) noted that the AHRC October 2010 discussion paper provides greater clarity about what the role of the Commonwealth Commissioner should be.6i Further issues raised regarding the functions of the Commonwealth Commissioner are discussed in more detail in chapter 4.

58 Families Australia, Submission 17, p. 12. See also Children with Disability Australia, Submission 83, p. 7.

59 Blind Citizens Australia, Submission 49, p. 2; Novita Children's Services, Submission 93, pp 2 and 6-8; Julia Fair Association, Submission 76, pp 4-5; Children with Disability Australia, Submission 83, p. 7; and People with Disability Australia, Submission 70, p. 3. See also Law Council of Australia, Submission 78, p. 16.

60 Children with Disability Australia, Submission 83, p. 7.

61 ECA, Submission 26, p. 1; Relationships Australia, Submission 25, p. 2; and Law Council of Australia, Submission 78, p. 12.

62 Ms Calvert AO/ National Foundation for Australian Women/ NIFTeY, Submission 24, p. 2. See also: The Benevolent Society, Submission 38, p. 4; andNDS, Submission 54, p. 2.

63 CAPRA, Submission 35, pp 1-2.

64 CAPRA, Submission 35, p. 2.

65 CSSA, Submission 42, p. 1.

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3.55 The Law Council noted that the reference to article 2 of the UN CRC in subclause 3(3) should be a reference to article 3, and recommended that the reference should be amended.66

Australia's international obligations

3.56 Submitters generally supported the establishment of a Commonwealth Commissioner to assist Australia in meeting its international obligations, particularly under the CRC. Families Australia noted that the UN Committee on the Rights of the Child has recommended that all governments should create human rights institutions for children to assist in monitoring, promoting and protecting children *s rights.07

3.57 In providing evidence to the committee, Ms Schulze, Save the Children Australia, informed the committee that the absence of a national children's commissioner in Australia has been noted in the international sphere:

In 2005 the UN committee responsible for monitoring states' obligations under the CRC expressed concern regarding Australia's lack of a national commissioner for children's rights. It was also a recommendation following Australia's universal periodic review by the UN Human Rights Council in January of this year. The establishment of a commissioner would clearly be a significant step forward in meeting Australia's international legal obligations under the CRC.68

3.58 This lack of compliance with international obligations on human rights, in particular under the CRC and the Convention Relating to the Status of Refugees was noted by submitters.69

3.59 The Youth Advocacy Centre (YAC) noted that state and territory

governments are not signatories to the UN CRC and are not directly accountable to the UN for any breach of the CRC in their jurisdiction. YAC suggested that a

Commonwealth Commissioner 'would play an important role in linking individual states and territories to Australia *s international obligations under the Convention of the Rights of the Child in a federated system'. In particular, YAC pointed to the situation in Queensland under which people who are 17 years of age are included in

the adult criminal justice system, which YAC characterised as a 'clear breach' of Australia's obligations under the UN CRC. YAC further commented that:

66 Law Council of Australia, Submission 78, p. 8. See AHRC, An Australian Children's Commissioner: Discussion Paper, October 2010.

67 Families Australia, Submission 17, pp 4-6. See also: Youthlaw, Submission 27, p. 2; Ms Philomena Murray, Submission 4, p. 1; and Mr John Polesel, Submission 9, p. 1.

68 Ms Schulze, Save the Children Australia, Committee Hansard, 30 March 2011, p. 1.

69 See for example: Law Institute of Victoria (LIV), Submission 59, p. 2; Mr Arch, Submission 1, pp 1-2; Youthlaw, Submission 27, p. 2; and ChilOut - Children Out of Immigration Detention (ChilOut), Submission 63, p. 4.

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A Commonwealth Commissioner would provide a critical level of critique and analysis at the Federal level, when States and Territories fail to observe and implement Convention standards.70

3.60 The Public Interest Advocacy Centre (PIAC) suggested that Australia *s international obligations to protect and promote the rights of children and young people should be embodied in Commonwealth-State agreements.71 BoysTown further proposed that Australia's obligations under other international agreements be reviewed to ensure that the Bill encompasses all required commitments.72

3.61 Ms Rosemaiy Budavari, appearing on behalf of the Law Council of Australia, explained to the committee that in the Law Council's view:

...any convention obligations should be implemented into domestic legislation fully. We have contributed to reports to a number of those UN committees which make that point, and we make that point to ministers of the government of both persuasions regularly.73

3.62 However, other submitters did not agree with the approach proposed by the Bill. FamilyVoice Australia was concerned that this would undermine parental rights and facilitate the intervention of international committees, such as the UN Committee on the Rights of the Child, in the laws of Australia's states and territories.74 75

Interaction with state and territory commissioners and guardians

3.63 A series of submitters raised concerns that the proposed monitoring roles and powers of the Commonwealth Commissioner will duplicate the roles of the current state and territory commissioners and guardians, resulting in an ineffective and resource intensive system. It was suggested that the Commonwealth Commissioner

should monitor the interaction of Commonwealth and state and territory laws and focus on the implementation of children's rights in the international context at a federal level.73

3.64 FamilyVoice Australia submitted that, as currently drafted, the Bill empowers the Commonwealth Commissioner to 'interfere in matters which are clearly the responsibility of the States'. Its submission noted that the powers of the

70 Youth Advocacy Centre (YAC), Submission 12, p. 1. See also ChilOut, Submission 63, p. 3.

71 Public Interest Advocacy Centre (PIAC), Submission 82, p. 4.

72 BoysTown, Submission 39, p. 2.

73 Ms Rosemary Budavari, Co-director, Criminal Law and Human Rights Unit, Law Council of Australia, Committee Hansard, 29 March 2011, p. 20.

74 FamilyVoice Australia, Submission 18, p. 2.

75 See for example: Department for Child Protection WA, Submission 75, p. 1; ACCG, Submission 20, pp 2-3; Queensland Jurisdictional Response (Queensland Commission for Children and Young People and Child Guardian), Submission 58, pp 1-2; Law Council of Australia, Submission 78, p. 10; and NSW Government, Submission 91, pp 2-3.

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Commonwealth Commissioner are not limited to laws of the Commonwealth, as references in the provisions of the Bill refer to 'laws' generally.76 77 FamilyVoice Australia recommended that the Bill be redrafted to ensure that the powers of the

Commonwealth Commissioner are limited to matters of direct Commonwealth responsibility.

3.65 Children's Hospitals Australasia argued that the responsibility of monitoring protective services should remain with the states and territories because without adequate resourcing and support, 'the complexity and volume of this work can be overwhelming' and 'can unintentionally divert attention away from the advocacy and policy functions'.78

3.66 In contrast, Mission Australia recommended that the Bill should specify that the Commonwealth Commissioner have purview of Commonwealth and state and territory laws which affect children and young people.79

3.67 The ACCG, represented by Ms Elizabeth Fraser, Queensland Commissioner for Children and Young People and Child Guardian, noted that while the ACCG have concerns about duplication of functions, there is still a role for the Commonwealth Commissioner to play:

I guess we would not see the national commissioner role as necessarily moving into the sorts of areas where children are actually involved in state- directed services under the legislation within the states and territories, but that they would look at broader rights and whether or not there was an

oversight of that within the jurisdictions; in particular, looking at things like income protection security, some of the national health early childhood and family law...In our advocacy there we would like to see this position really pick up on the rights in the national and international frame and add value to the work that is already happening, and if that work is not happening to the same level in the states then advocating that it should.80

3.68 The Employment Law Centre of Western Australia agreed that there are a number of issues affecting children and young people which fall within the Commonwealth's jurisdiction:

...such as immigration, social security and family law. There are also many issues faced by Australian children which affect children around the

76 FamilyVoice Australia, Submission 18, p. 4. See in particular Commonwealth Commissioner for Children and Young People Bill 2010, para. 3(2)(b) and subpara. 9(c)(i).

77 FamilyVoice Australia, Submission 18, p. 4.

78 Children *s Hospitals Australasia, Submission 41, p. 3.

79 Mission Australia, Submission 56, pp 12-13. See also UnitingCare Australia, Submission 67, p. 4.

80 Ms Elizabeth Fraser, Queensland Commissioner for Children and Young People and Child Guardian, ACCG, Committee Hansard, 29 March 2011, p. 3.

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country, and which should be addressed from a national perspective. These include issues such as homelessness and access to justice.81

3.69 A large number of submitters called for clearer delineation of responsibilities between Commonwealth and state and territory commissioners and guardians, in consultation with the relevant state and territory commissioners and guardians.82

Families Australia recommended that:

...for public clarity and to avoid duplication of effort, the roles and

responsibility of the national and State/Territory Children *s Commissioners, and their inter-relationships, should be more clearly defined. In effect, we suggest that there be a cascading national system which defines the powers, roles and functions which are appropriate to a Commonwealth

Commissioner and those which should properly be handled at a State and Territory level. This would be a longer-term goal and not part of the initial Act, although we do recommend that the Bill encourage the longer-term development of common approaches across jurisdictions in matters such as

performance reporting and monitoring...83

3.70 At the committee's public hearing, Ms Prue Warrilow, Chair, Families Australia, further explained how the line between the functions of state and territory commissioners and guardians, and a Commonwealth Commissioner might be drawn:

You would need to have some specificity about the roles and

responsibilities. A focus on the wellbeing of Australia *s children is a much broader remit than most of the state and territory commissioners and guardians. If you look at the Commonwealth policy frameworks *I am particularly referring to the National Framework for Protecting Australia *s

Children and the National Quality Agenda for Early Childhood Education and Care *they are all about children *s wellbeing, so they enable a

Commonwealth delineation around the state rules...

They still involve state and territory responsibilities and input, but ultimately those frameworks are sitting within a national agenda and within Commonwealth responsibilities.84

3.71 The Centre for Excellence in Child and Family Welfare suggested that the state and territory commissioners and guardians be formally linked under the office of

81 The Employment Law Cenhe of Western Australia, Submission 33, p. 2. See also HRLRC, Submission 51, pp 3 and 9.

82 See for example: PeakCare, Submission 28, p. 3; The South Australian Council for the Care of Children, Submission 71, p. 5; The Benevolent Society, Submission 38, p. 6; Families Australia, Submission 17, pp 10-11; CREATE Foundation, Submission 30, p. 2; NSW Government, Submission 91, p. 3; UnitingCare Australia, Submission 67, p. 5; and CAPRA, Submission 35, p.4.

83 Families Australia, Submission 17, p. 11. See also Australian Association of Social Workers, Submission 44, p. 1.

84 Ms Prue Warrilow, Chair, Families Australia, Committee Hansard, 29 March 2011, p. 10.

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the Commonwealth Commissioner.85 However the ACCG did not support this approach and argued that:

A single, central national office would have significant difficulties in effectively monitoring and overseeing the delivery of services to children and young people in all states and territories. This is further complicated as each state and territory has different child protection system and youth justice arrangements.86

3.72 A further matter noted in the evidence received by the committee is the differing powers of children's commissioners and guardians across various states and territories. Families Australia explained that while in some jurisdictions the commissioner or guardian may be 'mandated to take a broader children's wellbeing perspective', other commissioners and guardians focus on specific cases.87 The

committee also received evidence on the operation, functions, and in some cases limited powers and resources of some of the current state and territory commissioners and guardians from the Law Council, the Ombudsman Victoria, and other submitters.88

3.73 PeakCare suggested that given the inconsistencies across jurisdictions, the Commonwealth Commissioner could play an important role in aligning and integrating standards and legislation, as:

The lack of consistency around the jurisdictions can cause concern and hardship for children and young people and can allow for children and young people to miss access to services if they move around the country. Some examples of this complexity are the school entry age, a lack of a national school curriculum, the after care service provision for children and young people leaving state care and the differences in thresholds for

receiving state services once neglect or abuse has been reported and substantiated.89

3.74 Women Everywhere Advocating Violence Eradication (WEAVE) noted that due to the 'two tiered system' of responsibility for children and young people in Australia, the Commonwealth Commissioner would have an important role:

85 Centre for Excellence in Child and Family Welfare, Submission 13, p. 1.

86 ACCG, Submission 20, pp 2-3.

87 Families Australia, Submission 17, p. 10. See also Blind Citizens Australia, Submission 49, p. 2; The Employment Law Centre of Western Australia, Submission 33, p. 2; PeakCare, Submission 28, p. 2; ACCG, Submission 20, pp 2-3; Save the Children Australia, Submission 57, p. 2; and HRLRC, Submission 51, p. 9.

88 Law Council of Australia, Submission 78, p. 7; and Ombudsman Victoria, Submission 11, pp 1-2. See also Aboriginal Legal Service of Western Australia (ALSWA), Submission 15, p. 1; Youthlaw, Submission 27, p. 3; Centre for Excellence in Child and Family Welfare, Submission 13, p. 1; and The South Australian Council for the Care of Children, Submission 71, p. 1.

89 PeakCare, Submission 28, p. 2.

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It is reasonable to expect that the most important role for the National Commissioner for Children and Young People would be at the point at which state and federal systems overlap or at the point where poor

coordination of state and federal responsibilities leave children vulnerable to poor outcomes.90

3.75 In this respect, Dr Ken Baker of NDS explained to the committee the ability of the Commonwealth Commissioner to take a national approach which cannot be undertaken by the states:

Clearly there is risk here of duplication. I am aware of those risks and they would need to be managed well. However, I think there are also some opportunities that could arise from the establishment of a Commonwealth children *s commissioner that do not exist at state level...There is also an opportunity for a Commonwealth commissioner to look across states and territories, compare what they are doing and see things that may be working well in one state that other states are not doing and use that. It could be a mechanism for disseminating best practice across Australia.91

3.76 While PIAC suggested that cooperation from state and territory governments be encouraged through 'the inclusion of conditions in relevant Commonwealth-State funding agreements',92 the Law Council noted the provision for the referral of matters to the appropriate authority under paragraph 10(g). The Law Council was of the view

that that this will 'foster interaction with the State and Territory Children *s Commissioners, particularly with those who deal with individual complaints'.93

3.77 Ms Budavari of the Law Council of Australia noted that in the Law Council's view, the role of the Commonwealth Commissioner would 'complement the functions of existing children's commissioners and guardians in the states and territories', however to avoid duplication of functions, the role of the Commonwealth

Commissioner will need to be focussed:

We do support the concurrent operation of state and territory laws relating to children *s commissioners and guardians and relating to children *s rights generally, given the particular division of constitutional responsibilities that we have in Australia in relation to children *s matters. But due to that division and due to the existing bodies we feel that the commissioner will

need to focus on Commonwealth laws and really only examine state and territory laws and policies in the sense that they interact with

Commonwealth laws.94

90 Women Everywhere Advocating Violence Eradication (WEAVE), Submission 48, p. 8.

91 Dr Ken Baker, Chief Executive, NDS, Committee Hansard, 29 March 2011, p. 12.

92 PIAC, Submission 82, p. 4.

93 Law Council of Australia, Submission 78, p. 20.

94 Ms Budavari, Law Council of Australia, Committee Hansard, 29 March 2011, p. 18.

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3.78 Ms Fraser, representing the ACCG, emphasised that a Commonwealth Commissioner is supported by the ACCG but that a clear, well planned structure must be in place for it to operate successfully:

We would be more than happy to work together, but I think an important aspect of that is having the structure and the governance arrangements worked through so that there are opportunities to optimise that linking and meeting and working together. We currently, as state commissioners around Australia, meet twice a year to talk about what is happening in the various jurisdictions...So I do not think it would be problematic for the relationship

to work, for that collaboration to occur and for good work to be progressed by people. But I think you have to start from a base that is reasonably clear in terms of roles and responsibilities. Also, for the public, I think it is

important for them to have a view because, as you can read from some of the submissions, some people have a strong expectation that if we have a national commissioner then everything will be fixed or that they will deal with complaints.95

Independence of the office and reporting requirements

3.79 Strong arguments for ensuring that the office is independent were put forward in several submissions.96 97 It was noted that in some states and territories, the commissioner's independence is compromised due to the incorporation of the office into a government department.9 7

Funding

3.80 A common theme throughout the submissions received was the call for the Commission to be adequately resourced, and have guaranteed funding.98 In particular, the Aboriginal and Torres Strait Islander Legal Service (ATSILS) and BoysTown were concerned to ensure that the resourcing of the Commission be subject to Parliament rather than the Government.99 Mallesons Stephen Jaques Human Rights Law Group suggested that to address these concerns, a provision similar to that under section 52B of the South Australian Child Protection Act 1993 be included, stating:

95 Ms Fraser, ACCG, Committee Hansard, 29 March 2011, p. 4.

96 See for example: Save the Children Australia, Submission 57, p. 3; NSW Government, Submission 91, p. 4; HRLRC, Submission 51, pp 5-6; BoysTown, Submission 39, p. 3; Aboriginal and Torres Strait Islander Legal Service (ATSILS), Submission 22, p. 3; and Youth Legal Service, Submission 19, p. 4.

97 YAC, Submission 12, p. 2; and Youth Legal Service, Submission 19, p. 4.

98 See for example: Mallesons Stephen Jaques Human Rights Law Group, Submission 80, pp 13-14; NSW Government, Submission 91, p. 4; Mission Australia, Submission 56, p. 8; Relationships Australia, Submission 25, pp 2-3; Save the Children Australia, Submission 57, p. 4; ATSILS, Submission 22, pp 3-4; and YACVic, Submission 92, p. 5.

99 ATSILS, Submission 22, p. 3; and BoysTown, Submission 39, p. 3.

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The Minister must ensure that the Commissioner is provided with the staff and other resources that the Commissioner reasonably needs for carrying out its functions under this Act.100

3.81 Clarification was also sought in regards to the process by which the Commonwealth Commissioner is to engage consultants. In particular, Families Australia suggested clause 24 be clarified to ensure that the Commonwealth Commissioner will not be restricted in engaging consultants due to any obligation to obtain Commonwealth approval to engage a consultant.101

Appointment of the Commonwealth Commissioner

3.82 Submitters were also concerned to ensure that appointment processes will not affect the independence of the Commonwealth Commissioner. CAPRA raised concerns that the appointment of the Commonwealth Commissioner by the minister may affect the independence of the position, and suggested that 'appointment processes remain distinct from Government influence'. Further:

Although it may be argued that independence of action is separate from the matter of appointment and reporting, the proximity between the two components of the Commissioner process, renders it veiy difficult for the Bill as presently drafted to guarantee genuine transparency and independence from Ministerial influence. 102

3.83 To ensure independence, it was suggested a wide range of relevant bodies be consulted before the Commonwealth Commissioner is appointed. Submitters also suggested that children should have a say in the appointment of the Commonwealth Commissioner, noting that children and young people have successfully been involved

in the appointment of children's commissioners overseas.103 104

3.84 Families Australia suggested that further consideration be given to the 12 month limit on a person acting in the position of the Commissioner. Other submitters also commented on ensuring the security of tenure of the Commonwealth . . 104

Commissioner.

100 Mallesons Stephen Jaques Human Rights Law Group, Submission 80, p. 14.

101 Families Australia, Submission 17, pp 16-17. See also: Play Environment Consulting, Submission 21, p. 1; and Mallesons Stephen Jaques Human Rights Law Group, Submission 80, p. 14.

102 CAPRA, Submission 35, pp 6-7. See also NCYLC/ ARACY/ UNICEF Australia/ NACLC, Submission 79, pp 8-9.

103 Mallesons Stephen Jaques Human Rights Law Group, Submission 80, p. 15; YACVic, Submission 92, p. 6; and Youth law, Submission 27, p. 4.

104 Families Australia, Submission 17, p. 16. See also: Save the Children Australia, Submission 57, p. 3; Mi" Don Morris, Submission 68, p. 1; NSW Government, Submission 91, p. 4; and Mallesons Stephen Jaques Human Rights Law Group, Submission 80, p. 15.

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Reporting requirements

3.85 Submitters raised a series of concerns regarding the scope of the

Commonwealth Commissioner's reporting requirements outlined in the Bill, and their potential impact on the Commonwealth Commissioner's independence.

3.86 A number of submitters were of the view that the Commonwealth

Commissioner should report directly to Parliament rather than to a minister, and this should be specifically provided for in the Bill. The Centre for Excellence in Child and Family Welfare further suggested that a similar reporting line should be adopted at the state and territory level.103

3.87 A common argument raised in submissions was that the Commonwealth Commissioner should not prepare reports required under the UN CRC on behalf of the Australian Government to the UN Committee on the Rights of the Child as this may

compromise the Commissioner's independence. Rather, any reports should be made independently to the UN.105 106 As Families Australia elucidated:

As a States Party to UNCRC, the Australian Government alone has the responsibility for preparing its report on the nation *s performance under UNCRC. If the Commissioner is to remain independent, and to be seen to be independent, that Office must not be put in a position of potentially

having to balance the official views of the Australian Government with those which the Commissioner might have formed through independent analysis and consultation. Rather, it is the proper role of the Commissioner to prepare his or her own report about Australia's performance under UNCRC without fear or favour, and it is appropriate for this report to be made public107

3.88 The HRLRC also disagreed with the Commonwealth Commissioner producing Australia's report to the UN, and suggested that the Commonwealth Commissioner should instead contribute to the AHRC reports under the CRC.108

3.89 Several submitters suggested that concerns regarding the Commonwealth Commissioner's reporting responsibilities could be addressed through amendments to the Bill. Some submitters were of the view that the Bill should specify that the

105 Centre for Excellence in Child Safety and Family Welfare, Submission 13, pp 1-2. See also: National Welfare Rights Network, Submission 87, p. 1; YMCA, Submission 64, p. 7; Association of Children *s Welfare Agencies (ACWA), Submission 16, p. 2; Youth Legal Service, Submission 19, p. 4; CAPRA, Submission 35, pp 7-8; and ChilOut, Submission 63,

p. 6.

106 See for example: NDS, Submission 54, p. 3; CAPRA, Submission 35, pp 7-8; Australian Association of Social Workers, Submission 44, p. 1; HRLRC, Submission 51, pp 11-12; Law Council of Australia, Submission 78, p. 22; SNAICC, Submission 53, p. 4; Save the Children Australia, Submission 57, p. 5; and AHRC, Submission 50, p. 7.

107 Families Australia, Submission 17, p. 10.

108 HRLRC, Submission 57, p. 1.

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minister is required to provide the Commonwealth Commissioner's report to the UN Secretary General in its entirety and without revision or omission.109 Dr Rebecca Newton, representing CAPRA, explained that concerns regarding the potential impact of the Commonwealth Commissioner's reporting requir ements on the independence of

the role could easily be addressed through clarification in the Bill:

I think there is scope to clarify that any report that is made by the

commissioner is done so in addition to government reports. My principal concern with reporting requirements is that the commissioner and any reporting that they undertake remain independent of government and that they have the scope to report freely on certain matters. It needs to be

genuinely independent from ministerial control...It may be a case of clarifying in the legislation that the commissioner *s reports are in addition to government reports.110

3.90 Other submitters noted their support for the responsibility endowed on the Commonwealth Commissioner to report to the UN Committee on the Rights of the Child. ATSILS further commented that the Commission should also 'report on Australia *s obligations in respect to other relevant Conventions which relate to children and young people.111

3.91 Youthlaw saw the Commonwealth Commissioner's role differently:

The Commissioner should contribute independently to the reporting process under CROC and other relevant international instruments and monitor the integrity of government reports to international treaty bodies with respect to children *s rights.112

3.92 Submitters also suggested that the Commonwealth Commissioner's report to Parliament should reflect on and provide analysis of: the status of children and young people; any observed gaps or weaknesses in policy and programs; any systemic issues identified; progress or barriers to progress on the rights of children and young people, particularly through key policies, frameworks and programs; and should make recommendation. Further, submitters argued that all reports produced by the Commonwealth Commissioner should be publicly available.113

109 NCYLC/ ARACY/ UNICEF Australia/ NACLC, Submission 79, p. 9; and Relationships Australia, Submission 25, p. 3.

110 Dr Rebecca Newton, Research Associate, CAPRA, Committee Hansard, 30 March 2011, pp 12-13.

111 ATSILS, Submission 22, p. 2. See also ALSWA, Submission 15, p. 2.

112 Youthlaw, Submission 27 , p. 5.

113 See for example: Relationships Australia, Submission 25, p. 3; Youthlaw, Submission 27, p. 4; PeakCare, Submission 28, pp 3-4; CREATE Foundation, Submission 30, p. 3; ACWA, Submission 16, p. 2; Families Australia, Submission 17, p. 17; AHRC, Submission 50, p. 7; and UnitingCare Australia, Submission 67, pp 3 and 6-7.

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Other issues

3.93 Submitters also briefly raised a series of other matters with the committee.

3.94 The committee received evidence suggesting that the Commonwealth Commissioner should be called the 'Australian Commissioner for Children and Young People' to reflect its international role, and to enable the Commissioner to be distinguished from other commissioners internationally.114 Alternatively, Berry Street

suggested the appropriate title should be 'National Commissioner for Children and Young People'.11

3.95 One submitter suggested that the statutory review period be extended as the period will not encompass a report to the UN Committee on the rights of the child. It was argued that the 'statutory review period should be extended to allow for a complete cycle in which the Commissioners functions are tested'.116

3.96 CAPRA suggested that the term 'promoting the rights' be replaced with 'promoting and protecting the rights' to ensure proper compliance with international obligations, and consistency.117

3.97 Various submitters suggested that for the sake of consistency, the term 'indigenous' should be replaced with 'Aboriginal and Torres Strait Islander'.118

3.98 Privacy NSW noted that there is no provision pertaining to the privacy protection of children and young people, and consequently suggested that the Commonwealth Commissioner be empowered to refer policy matters and complaints relating to the privacy of children and young people to the Australian Privacy

Commissioner, with the consent of the person in question or their guardian.119

3.99 The Law Society of New South Wales suggested that the Bill should specify accountability mechanisms to ensure that the Commonwealth Commissioner is accountable to the public, possibly through being subject to freedom of information requirements, and requirements to keep adequate records and make regular reports.120

3.100 The Law Council noted the provision pertaining to the privileges and immunities afforded to the Commonwealth Commissioner (clause 28), and suggested

114 Ms Calvert AO/ National Foundation for Australian Women/ NIFTeY, Submission 24, p. 8.

115 Berry Street, Submission 74, p. 6.

116 Ms Calvert AO/ National Foundation for Australian Women/ NIFTeY, Submission 24, p. 8.

117 CAPRA, Submission 35, p. 5.

118 AY AC/ State and Territory Youth Peaks/ MYAN/ CAAH/ headspace/ Inspire Foundation, Submission 86, p. 13; Families Australia, Submission 17, p. 13; and Relationships Australia, Submission 25, p. 2.

119 Privacy NSW, Submission 40, pp 1-2.

120 The Law Society of New South Wales, Submission 60, p. 2.

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that these be limited to apply in the same way as those applying to the AHRC, even if the Commonwealth Commissioner is not created within the AHRC.121

121 Law Council of Australia, Submission 78, p. 22.

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CHAPTER 4

Main issues regarding the functions and powers of the Commonwealth Commissioner

4.1 This chapter examines the main issues raised regarding the functions and powers of the proposed Commonwealth Commissioner for Children and Young People (Commonwealth Commissioner). While the majority of submitters supported the intent of the functions and powers outlined in the Commonwealth Commissioner

for Children and Young People Bill 2010 (the Bill), most submitters suggested amendments to strengthen the Bill.

4.2 Submitters requested further clarification on, and suggested various amendments to, the functions and powers provided in the Bill (primarily those provisions under clauses 9 and 10). The extension of existing functions and the addition of extra functions and powers were also suggested by some submitters.

4.3 As noted in chapter 3, the Law Council of Australia suggested that if the Commonwealth Commissioner is not established within the Australian Human Rights Commission (AHRC), then the functions under subclause 9(1) of the Bill should be 'redrafted in line with the language of the corresponding functions and powers in the AHRC Act'.1

Monitoring and examining legislation, policies and programs

4.4 Submitters suggested that the Commonwealth Commissioner's monitoring and examination functions, described in subclauses 3(2) and 9(1), should be more explicitly specified in the Bill, and that these functions should also extend to other areas, but should not impinge on the jurisdiction of state and territory commissioners and guardians.

4.5 Child Abuse Prevention Research Australia (CAPRA) and other submitters noted that the provision in paragraph 3(2)(b) relating to the monitoring of laws affecting children and young people is broad in scope and its application is unclear, and therefore should be revised:

It is not articulated clearly whether this 'monitoring' function is applicable to Federal or State legislation, or both. Furthermore it is ambiguous as to whether it principally applies to the 'development and application' of new laws which may affect children or whether it also serves to encompass

1 Law Council of Australia, Submission 78, p. 16. See also NSW Ombudsman, Submission 90, p. 2.

existing legislation, including that which governs the activities of State Children *s Commissioners.2

4.6 Some submitters voiced concern that the role of the Commonwealth Commissioner should be to monitor implementation and should not extend to monitoring, investigating and reporting on children *s rights in states and territories. Families Australia suggested it might be appropriate to clearly demarcate the responsibilities of the Commonwealth Commissioner in relation to state and territory commissioners and guardians in clause 9.

4.7 The Law Council of Australia (Law Council) raised similar concerns, suggesting that the monitoring ability in clauses 3 and 9 should extend to existing and proposed enactments. The Law Council also noted that some state and territory commissioners and guardians have oversight of laws affecting children in then- respective jurisdictions. Given this, the Law Council was of the view that the Commonwealth Commissioner should have a particular focus on monitoring Commonwealth laws, policies, programs and funding, and the interaction of state and territory laws with Commonwealth laws, policies, programs and funding.4 5

4.8 Submitters also suggested that the Commonwealth Commissioner should examine both existing and proposed legislation and policies to ascertain the potential impact they may have on children and young people and to ensure that the rights of

children and young people are respected.3 Youth Legal Service suggested that the Commonwealth Commissioner's priority should be an audit of the key policy areas of health, education, justice, and child care and protection.6 Youth Legal Service further proposed that the Commonwealth Commissioner's functions should extend to monitoring and reviewing the adequacy and standards of children's services, and ensuring the accountability of both government and non-government service providers in relation to this.7

2 Child Abuse Prevention Research Australia (CAPRA), Submission 35, p. 3. See also Law Council of Australia, Submission 78, p. 10.

3 Families Australia, Submission 17, p. 15. See also: Australian Children's Commissioners and Guardians (ACCG), Submission 20, pp 2-3; and Queensland Jurisdictional Response (Queensland Commission for Children and Young People and Child Guardian), Submission 58, p. 1.

4 Law Council of Australia, Submission 78, pp 10-11 and 16. See also Novita Children's Services, Submission 93, p. 9.

5 Aboriginal and Torres Strait Islander Legal Service (ATSELS), Submission 22, p. 4; Youth Legal Service, Submission 19, p. 5; Youthlaw, Submission 27, p. 3; Law Council of Australia, Submission 78, p. 16; Australian Council on Children and the Media (ACCM), Submission 52, p. 3; and Save the Children Australia, Submission 57, p. 4.

6 Youth Legal Service, Submission 19, pp 6-8.

7 Youth Legal Service, Submission 19, p. 5. See also Young Men's Christian Association (YMCA), Submission 64, p. 8.

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4.9 A large number of submitters suggested that the Bill should specifically require the Commonwealth Commissioner to monitor compliance with the United Nations (UN) Convention on the Rights of the Child (CRC).8 Other submitters further commented that the Commonwealth Commissioner should also have responsibility for monitoring, compliance with, and the implementation of, Australia *s obligations under the UN Convention on the Rights of Persons with Disabilities (CRPD), the Optional Protocol to the CRPD and the two existing Optional Protocols to the CRC.9

4.10 A series of submitters suggested that the Commonwealth Commissioner should have responsibility for monitoring the National Framework for the Protection of Children, and should publicly report on progress.10 In addition it was suggested that this monitoring role should extend to the National Quality Framework for Early Childhood Education and Care and the National Standards for Out of Home Care, to ensure that the standards are met, thereby achieving outcomes for children and young

people.11 Bamardos further commented:

Standards compliance and future development should be a core the function of the Commissioner because this function should be independent from existing bureaucracies. While some States, most noticeably New South Wales have existing mechanisms for monitoring standards, this does not

occur in all jurisdictions.12

Coordinating functions

4.11 The coordinating functions specified in paragraphs 3(2)(c) and 9(1 )(i) were seen as compromising the Commonwealth Commissioner's independence, particularly in regard to policy coordination, and it was suggested that they could create increased

bureaucracy and inefficiency. Submitters proposed that such functions are more properly a role of government.13 Rather than a coordinating role, submitters suggested

8 See for example: Catholic Social Services Australia (CSSA), Submission 42, p. 2; NSW Ombudsman, Submission 90, p. 2; UnitingCare Australia, Submission 67, p. 4; People with Disability Australia, Submission 70, p. 3; Australian Human Rights Commission (AHRC), Submission 50, p. 7; and Law Council of Australia, Submission 78, pp 12-13.

9 AHRC, Submission 50, p. 7; Law Council of Australia, Submission 78, pp 12-13; and People with Disability Australia, Submission 70, p. 3.

10 See for example: PeakCare, Submission 28, p. 3; Association of Children's Welfare Agencies (ACWA), Submission 16, p. 2; Families Australia, Submission 17, pp 8 and 16; NSW Ombudsman, Submission 90, p. 3; National Disability Services (NDS), Submission 54, p. 2; and Secretariat of National Aboriginal and Islander Child Care (SNAICC), Submission 53, p. 4.

11 Bamardos, Submission 32, p. 1; YMCA, Submission 64, p. 8; The Benevolent Society, Submission 38, p. 6; Families Australia, Submission 17, p. 8; UnitingCare Australia, Submission 67, pp 4 and 6; and ACWA, Submission 16, p. 2.

12 Bamardos, Submission 32, p. 1.

13 See for example: Youthlaw, Submission 27, p. 4; Relationships Australia, Submission 25, p. 2; ACCG, Submission 20, pp 2-3; CSSA, Submission 42, pp 1-2; Families Australia, Submission 17, p. 14; NSW Government, Submission 91, p. 3; NDS, Submission 54, p. 2; SNAICC, Submission 53, p. 4; and Save the Children Australia, Submission 57, pp 4-5.

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that the Commonwealth Commissioner should work to encourage an integrated approach to the services provided to children and young people, across all levels of government.14

4.12 However other submitters supported the coordination function.15 As the Public Interest Advocacy Centre (PLAC) stated:

A national approach could assist in coordinating research and information about best practice for laws and policies that impact on children and young people. This should assist governments and their funded services that have primary responsibility for service delivery, achieve better outcomes for the most vulnerable and disadvantaged young people in their communities.16

4.13 The NSW Ombudsman noted that the monitoring of trends and coordinating of strategic responses to issues affecting children and young people at a national level would actually complement the role of state and territory commissioners and guardians:

There is increasing overlap between Commonwealth and state/ territory jurisdictions, for example in relation to homelessness, housing, education and health care. Especially in those areas where equity requires a consistent

national approach, a national children *s commissioner would be well placed to identify and promote best practice from across the country and

internationally. Given a clear strategic focus, this role would be quite distinct from, but complimentary to, state/ territory commissioners. I recognise that state/ territory commissioners are best placed to respond to emerging issues and to ensure quality in local level service delivery.17

Intervening in legal cases

4.14 While further detail on the operation of this function was requested, the provision in the Bill enabling the Commonwealth Commissioner to intervene in legal cases involving the rights of children and young people was supported by various submitters.18 The AHRC was of the view that the Commonwealth Commissioner

should have responsibility for:

14 PeakCare, Submission 28, p. 3; and Ms Gillian Calvert AO/ National Foundation for Australian Women/ National Investment for the Early Years (NIFTeY), Submission 24, pp 2-4.

15 UnitingCare Australia, Submission 67, p. 4; Multicultural Youth Advocacy Network (MYAN), Submission 84, p. 5; and Public Interest Advocacy Centre (PIAC), Submission 82, p. 3.

16 PIAC, Submission 82, p. 3.

17 NSW Ombudsman, Submission 90, p. 2.

18 AHRC, Submission 50, p. 8; Mallesons Stephen Jaques Human Rights Law Group, Submission 80, p. 10; National Association for Prevention of Child Abuse and Neglect (NAPCAN), Submission 47, p. 3; The Employment Law Centre of Western Australia, Submission 33, p. 5; Children with Disability Australia, Submission 83, p. 8; and Women Everywhere Advocating Violence Eradication (WEAVE), Submission 48, pp 10-11.

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" assisting courts as amicus curiae by providing expert advice on human rights issues in important cases impacting on the rights of children and young people; and

" intervening in legal cases brought by individuals alleging a breach of rights set out in the CRC as well as in legal cases

with implications for the enjoyment of the rights of children and young people at the systemic level.

4.15 However, submitters raised concerns about the meaning of 'intervening in legal cases involving the rights of children and young people', and called for clarification. In particular, some submitters commented that this could lead to the Commonwealth Commissioner becoming overburdened with individual cases.

Submitters suggested that any intervention in legal proceedings involving the rights of children and young people should not interfere with due process, should be with the leave of the court, subject to any conditions imposed by the court, and may be as amicus curiae ('friend to the court').19 20 In particular the Law Institute of Victoria (LIV) and others noted that intervention in legal cases may conflict with the responsibilities of other bodies in practice, and therefore the circumstances in which the Commonwealth Commissioner can intervene in legal cases should be circumscribed.21

4.16 However, despite its concerns regarding the Commonwealth Commissioner's involvement in legal cases regarding children's rights, Families Australia noted that due to the existing:

...disparity in the terms of reference and mandates of the various State and Territory Children's Commissioners or Guardians across Australia...it may be argued that the Commonwealth Commissioner should operate in this area - having a role akin to that of an Ombudsman - in order to provide

national consistency of treatment of complaints made by, or on behalf of, children and young people.

It may be that an appropriate role for the Commonwealth Commissioner in this area is the provision of assistance to children and young people in taking a particular matter to the appropriate authority. If, however, the matter is of a more general nature or is not covered by State or Territory processes, a more active role for the Commissioner may be considered.22

19 AHRC, Submission 50, p. 8. See also Mission Australia, Submission 56, p. 7.

20 PeakCare, Submission 28, p. 3; Families Australia, Submission 17, p. 15; Save the Children Australia, Submission 57, p. 4; CAPRA, Submission 35, p. 5; Law Council of Australia, Submission 78, p. 18; Mailesons Stephen Jaques Human Rights Law Group, Submission 80, p. 10; Law Institute of Victoria (LIV), Submission 59, p. 2. The LIV explained that as amicus curiae, the Commonwealth Commissioner could assist the court on points of law in a particular case, but could not file pleadings, lead evidence, or lodge an appeal.

21 LIV, Submission 59, pp 2-3. See also and Mailesons Stephen Jaques Human Rights Law Group, Submission 80, p. 10.

22 Families Australia, Submission 17, p. 15.

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4.17 Mission Australia also noted that this could be a beneficial role for the Commonwealth Commissioner to undertake, as 'this will be particularly important where gaps between State and Commonwealth law may result in the exacerbation of some children and young people *s vulnerability'.23

Promotion and public education

4.18 It was suggested that the Commonwealth Commissioner's functions be expanded to include public education about the rights of children. Submitters also called for the function in relation to education and promotion to be extended beyond early childhood development.24 25 Early Childhood Australia (ECA) and others commented that only the Government can 'ensure' strong investment in early

childhood development, therefore the Commonwealth Commissioner can advocate for such investment, but cannot ensure it."3

4.19 The National Association for Prevention of Child Abuse and Neglect (NAPCAN), recommended that the Commonwealth Commissioner should also have a function to educate the public about how to prevent child abuse and neglect, through a public awareness campaign.26 The Aboriginal and Torres Strait Islander Legal Service (ATSILS) suggested that the Commission would need to promote its existence and its work appropriately.27

4.20 Submitters further suggested that the Commonwealth Commissioner should promote the CRC in Australia 'as a means of improving the status of children and young people via increased understanding of the rights and needs of children and young people'.28 In this vein, the Law Council suggested that paragraph 9(1 )(b) should refer to the UN CRC, CRPD, the relevant Optional Protocols and other relevant international instruments.29

23 Mission Australia, Submission 56, p. 7.

24 See for example: Community Child Care Co-operative, Submission 36, p. 1; The Employment Law Centre of Western Australia, Submission 33, p. 2; The Benevolent Society, Submission 38, p. 5; LIV, Submission 59, pp 2-3; Law Council of Australia, Submission 78, p. 18; and Youth Affairs Council of Victoria (YACVic), Submission 92, pp 5-6.

25 See for example Early Childhood Australia (ECA), Submission 26, p. 2; AHRC, Submission 50, pp 8-9; Women Everywhere Advocating Violence Eradication (WEAVE), Submission 48, p. 11; and National Children's and Youth Law Centre (NCYLC)/ Australian Research Alliance for Children and Youth (ARACY)/ UNICEF Australia/ National Association of Community

Legal Centres (NACLC), Submission 79, pp 14-15.

26 NAPCAN, Submission 47, pp 3-4.

27 ATSILS, Submission 22, p. 4.

28 The Employment Law Centre of Western Australia, Submission 33, p. 5; PeakCare, Submission 28, p. 2; and Youth Legal Service, Submission 19, p. 5.

29 Law Council of Australia, Submission 78, p. 16.

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Engaging children and young people and wider consultation

4.21 The functions and requirements of the Commonwealth Commissioner to consult with children and young people and to proactively involve them in decisions which affect them were widely supported by submitters. However, it was suggested that the Bill should require that the Commonwealth Commissioner develop a tangible model, or structures and consultation mechanisms which will facilitate communication and enable children and young people to actively participate in decision making.30

4.22 For example, submitters suggested employing the internet and social media as methods for engaging children and young people and promoting awareness of children's rights, noting success with the use of these mediums by commissioners overseas.31

4.23 The Child and Welfare Agencies Association (CAFWAA) suggested that one way of ensuring that consultation with children and young people is representative and informed may be through establishing an advisory committee, or thorough engaging with bodies used by the state and territory commissioners.32 The Mallesons Stephen Jaques Human Rights Law Group noted that some overseas jurisdictions have implemented advisoiy committees.33

4.24 This approach was supported by the Law Council which noted that the establishment of advisory committees is provided for in other state and territory legislation:

Such committees appear to be a mechanism for the consultation with parents, guardians and educators referred to in sub-clauses 10(d) and (e). Such committees appear to operate very effectively and the Law Council recommends that the Committee consider whether the Bill should be

amended to provide for consultative committees.34

4.25 Submitters called for an expansion of the bodies specified in the legislation to be consulted. It was argued that this list should include: non-government community service organisations; carers; academics; researchers and research bodies; doctors; paediatric and young people health services; as well as experts on child rights,

__________________________________________________________________________________________________________45

30 See for example: Australian Association of Social Workers, Submission 44, p. 2; Mission Australia, Submission 56, pp 10-11; The Employment Law Centre of Western Australia, Submission 33, p. 4; AHRC, Submission 50, p. 8; ACCG, Submission 20, p. 2; WEAVE, Submission 48, p. 10; and Novita Children's Services, Submission 93, p. 9.

31 Mallesons Stephen Jaques Human Rights Law Group, Submission 80, pp 8-9; YACVic, Submission 92, p. 6; and NCYLC/ ARACY/ UNICEF Australia/ NACLC, Submission 79, pp 14-15.

32 Child and Family Welfare Agencies Association (CAFWAA), Submission 72, p. 1. See also YACVic, Submission 92, p. 6.

33 Mallesons Stephen Jaques Human Rights Law Group, Submission 80, p. 9.

34 Law Council of Australia, Submission 78, p. 19.

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advocates, Indigenous issues and disability issues and other peak/representative groups and relevant parties.35 National Disability Services (NDS) explained that such bodies 'play an important role in the promotion of the safety and wellbeing of Australia *s children and young people through research and analysis, advocacy, policy

and service delivery roles'.36 The Law Council suggested the restrictive nature of the provision may be addressed by forming advisory committees constituted by members with a broad range of relevant skills and experience.37

4.26 One submitter commented that it is unclear why the Bill specifies consultation with educators, and state and territory commissioners and guardians. Save the Children Australia suggested that the Commonwealth Commissioner should only

consult educators on matters relating to education.38

4.27 Concerns were also raised that children and young people did not appear to have been directly consulted on the Bill itself.39

4.28 ATSILS commented that 'the Commission must be culturally appropriate and culturally competent'.40 This was supported by the HRLRC which suggested that the Commonwealth Commissioner should conduct duties in a manner that is 'attentive and sensitive to children and young people's ethnic and cultural identities'.41 As Mission

Australia explained:

...special attention must be paid to the assertion of these children and young people *s cultural rights, as a strong sense of attachment to a cultural community is a key focus of the UNCRC and a known protective factor that

supports the development of self-esteem and positive social norms and behaviours, and promotes wellbeing.42

35 See for example: People with Disability Australia, Submission 70, p. 4; Mission Australia, Submission 56, pp 10-11; Human Rights Law Resource Centre (HRLRC), Submission 51, p. 11; Play Environment Consulting, Submission 21, p. 1; Australian Medical Association (AMA), Submission 88, p. 2; Children's Hospitals Australasia, Submission 41, p. 3; SNAICC, Submission 53, p. 4; and Australian Youth Affairs Coalition (AYAC)/ State and Territory Youth Peaks/ MYAN/ Centre for the Advancement of Adolescent Health (CAAH)/ headspace/ Inspire Foundation, Submission 86, p. 15.

36 NDS, Submission 54, p. 3.

37 Law Council of Australia, Submission 78, p. 19.

38 Ms Calvert AO/ National Foundation for Australian Women/ NIFTeY, Submission 24, p. 3; and Save the Children Australia, Submission 57, p. 5.

39 NCYLC/ ARACY/ UNICEF Australia/ NACLC, Submission 79, p. 10.

40 ATSILS, Submission 22, p. 4.

41 HRLRC, Submission 51, p. 10.

42 Mission Australia, Submission 56, pp 6-7. See also: MYAN, Submission 84, p. 5; SNAICC, Submission 53, p. 3; and AYAC/ State and Territory Youth Peaks/ MY AN/ CAAH/ headspace/ Inspire Foundation, Submission 86, p. 15.

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4.29 People with Disability Australia and the Julia Farr Association noted the importance of ensuring that children and young people living with disability are effectively consulted and involved in decision making. As the ability of children and young people to understand and convey information can vary widely, due to 'cognitive or communication issues, there needs to be consideration of the provision of responsive supports to assist children to make decisions and express their views'. As a result, it was recommended that paragraph 10(a) of the Bill be amended to read 'consult with children and young people in all their diversity in ways appropriate to their age, maturity and participation needs'.43

4.30 The Refugee Council of Australia recommended that a 'youth participation' approach be taken to ensure the Commonwealth Commissioner can engage fully with all children. This would involve 'practices which maximise the inclusion of children and young people from a refugee, asylum seeker and humanitarian background1.44

4.31 The AHRC further suggested that the Commonwealth Commissioner could have the ability to speak on behalf of children and young people 'if there were insufficient mechanisms for children to represent their own interests at the national level'.45 Another submitter went further, suggesting that the Bill should clearly state that the Commonwealth Commissioner is required to listen to and represent the views of children and young people.46

A focus on vulnerable children and young people

4.32 A number of submitters commented that the Bill should provide that in performing their functions the Commonwealth Commissioner is to have a specific focus on those children and young people who are especially vulnerable. In particular, submitters suggested that special attention should be afforded to Aboriginal and

Torres Strait Islander children and young people and children and young people in immigration detention, those in the criminal justice system, those in out-of-home care, and children and young people living with a disability.47

4.33 Mr Julian Pocock, of Berry Street, commented:

...something we picked up from the bill *and we are not quite sure that it was intended *is that there seems to be a lack of focus on the hard end of social policy and on the particular groups of children and young people who

43 Julia Farr Association, Submission 76, pp 5-6; Children with Disability Australia, Submission 83, p. 8; and People with Disability Australia, Submission 70, p. 4.

44 Refugee Council of Australia, Submission 69, p. 4.

45 AHRC, Submission 50, p. 8.

46 NCYLC/ ARACY/ UNICEF Australia/ NACLC, Submission 79, p. 10.

47 See for example: Julia Fan Association, Submission 76, p. 5; Mackillop Family Services, Submission 45, p. 1; NSW Government, Submission 91, pp 3-4; CREATE Foundation, Submission 30, p. 2; Bamardos, Submission 32, p. 1; ATSILS, Submission 22, p. 4; Law Council of Australia, Submission 78, p. 17; and AMA, Submission 88, p. 2.

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most need a commissioner for children and young people looking out for them.48

4.34 Families Australia recommended that an additional provision be added under clause 9 pertaining to the functions of the Commonwealth Commissioner, stating that 'the Commissioner will pay particular regard to the rights, needs and interests of

vulnerable children and young people'.49

4.35 While Catholic Social Services Australia (CSSA) supported the

Commonwealth Commissioner having a focus on vulnerable children and young people, it noted concern that specifying particular groups of vulnerable children could lead to the exclusion of other groups of children.50 This issue was elaborated on by Ms Catherine Branson, President and Human Rights Commissioner, AHRC, who

observed that specifically identifying various groups of vulnerable children in the legislation might be useful, as long as this did not work to the exclusion of other children and young people:

...we think it would be valuable to articulate in the bill particular groups of children in Australia who have a particular need for a commissioner who can listen to them and advocate on their behalf. However, it would be

important that nothing were done that limited the capacity of the

commissioner to respond to new and developing situations affecting children in Australia. And it is very critical for us to remember that it is all children in Australia, not just those from particular vulnerable groups, who have the right to be heard and are entitled to be treated with respect and who, for that reason, would benefit from the appointment of a

commissioner for children and young people.51

Aboriginal and Torres Strait Islander children and young people

4.36 Submitters noted that Aboriginal and Torres Strait Islander children and young people are overrepresented in juvenile detention centres and the justice system generally. For example, Families Australia commented that 'Aboriginal and Torres Strait Islander children are far more likely to be disadvantaged than non-Aboriginal

and Torres Strait Islander children across a broad range of health and socio-economic indicators', and are significantly overrepresented in the child protection system.52

48 Mr Julian Pocock, Director of Public Policy and Practice Development, Berry Street, Committee Hansard, 29 March 2011, p. 16.

49 Families Australia, Submission 17, p. 8.

50 CSSA, Submission 42, p. 2.

51 Ms Catherine Branson, President and Human Rights Commissioner, AHRC, Committee Hansard, 30 March 2011, p. 25.

52 Families Australia, Submission 17, pp 5-8. See also ATSILS, Submission 22, p. 2; Mission Australia, Submission 56, pp 6-7; Youth Legal Service, Submission 19, p. 7; and Aboriginal Legal Service of Western Australia (ALSWA), Submission 15, pp 1-2.

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4.37 In light of this, submitters argued that the Commonwealth Commissioner should give priority and have special regard to the interests of Aboriginal and Torres Strait Islander children and young people, for example through monitoring the Aboriginal Child Placement Principle. The Aboriginal Legal Service of Western Australia (ALSWA) suggested this could be achieved through a provision similar to

section 20 of the Commissioner for Children and Young People Act 2006 (WA).53

4.38 Several submissions suggested the appointment of a dedicated Commissioner or at least a Deputy Commissioner for Aboriginal or Torres Strait Islander children and young people. It was suggested that this would assist in meeting the targets identified in the 2010 Closing the Gap report.54 Mr Frank Hytten, Chief Executive

Officer of the Secretariat of National Aboriginal and Islander Child Care (SNAICC), explained:

...the scope and complexity of issues and policies affecting Aboriginal and Torres Strait Islander children requires a dedicated position with an exclusive focus. As recognized by the Council of Australian Governments * Closing the Gap Agenda, overcoming the intergenerational disadvantage facing many of our children and families requires a sustained commitment to effective reforms and resources in key areas. These key areas incorporate measures with a specific focus on children *s issues, all of which require ongoing monitoring and evaluation. The Agenda is also premised on acknowledgement of the importance of our culture and engagement with our children, families and communities. To meet this national commitment, a dedicated position is required.55

4.39 ATSILS further argued that the Commission should be staffed with appropriate numbers and levels of Aboriginal and Torres Strait Islander staff.56

Children and young people living with disability

4.40 The committee also received evidence that due to the particular vulnerability of children and young people with disability, specific recognition of this group is necessary in the Bill. In the view of NDS, for children and young people with disability:

...many mainstream services (such as early childhood services, education and training) fall well short of what could be considered adequate (often

53 ALSWA, Submission 15, pp 1-2. See also: Relationships Australia, Submission 25, p. 2; Families Australia, Submission 17, pp 5-8; Australian Association of Social Workers, Submission 44, p. 1; AMA, Submission 88, p. 2; Playgroup Queensland, Submission 43, p. 2; Law Council of Australia, Submission 78; and SNAICC, Submission 53, pp 1 and 3-4.

54 ALSWA, Submission 15, p. 2; SNAICC, Submission 53, p 1; Y AC Vic, Submission 92, p. 4; NSW Government, Submission 91, p. 3; and AYAC/ State and Territory Youth Peaks/ MY AN/ CAAH/ headspace/ Inspire Foundation, Submission 86, pp 11-12.

55 SNAICC, Submission 53, p. 1.

56 ATSILS, Submission 22, p. 4.

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through insufficient funding, limited access to teachers and support staff trained in disability, and poor access to facilities and assistive

technology).57

4.41 No vita Children's Services submitted that specific reference should be made to children and young people with disability in the functions of the Commonwealth Commissioner specified in the Bill, stating '[t]his is critical in the context of requiring domestic legislation to reflect and implement international commitments and obligations made by the Australian Government under UNCRC and UNCRPD'.58 This was supported by Dr Ken Baker, Chief Executive of NDS, who also called for children with disability to be specifically recognised in the Bill:

...there is a particular vulnerability that children with disability have and there is evidence that rates of abuse among children with disability are higher than in the general population. Because children with disability often require specialist support, they are, I think, a particularly vulnerable group.59

4.42 Families Australia and others suggested that the Commonwealth Commissioner should advocate for minimum standards for quality of life which must be met for those children and young people living with disability.60

Children and young people in the criminal justice system

4.43 Mission Australia was particularly concerned to ensure that the needs, rights and interests of children and young people in the criminal justice system are not overlooked:

Further, in view of recent commentary which suggests there has been a discernible a rise in more punitive youth justice policies at the expense of more rehabilitative approaches, we believe that monitoring this area, bringing pressure to bear on sentencing and other related policy, and educating the community regarding the necessity of a rehabilitative approach ought to be an urgent priority for the new Commonwealth

Commissioner.61

4.44 PIAC further noted that a national coordination and monitoring function would be beneficial for those subject to the criminal justice system, as:

...the existence of separate juvenile justice systems in each jurisdiction results in children detained for different reasons, in different conditions and for differing lengths of time and often with poor access to quality diversion

57 NDS, Submission 54, p. 2.

58 Novita Children *s Services, Submission 93, pp 8-9.

59 Dr Ken Baker, Chief Executive, NDS, Committee Hansard, 29 March 2011, p. 11.

60 Families Australia, Submission 17, p. 8. See also NDS, Submission 54, p. 1.

61 Mission Australia, Submission 56, pp 7-8.

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programs or support when exiting detention...For example, the variations between the jurisdictions in the treatment of juveniles is evident when comparing the rate of detention in Victoria and the Northern Territory: for every 1000 young people (aged between 10 and 17) in the Northern

Territory, 1.3 are in detention; compared with 0.1 for Victoria. Young people sentenced in the Victorian justice system are 23 times more likely to receive a community-based order than detention. In contrast, young people in the Northern Territory are twice as likely to be remanded in custody and

receive a custodial sentence than receive a community-based order. National leadership could put all jurisdictions on a path to best practice, improving outcomes for young people by giving evidence-based guidance and setting benchmarks that would reduce such wide discrepancies.62

Children and young people in immigration detention

4.45 A number of submitters raised concerns that current processes do not afford adequate care and protection to children and young people in immigration detention. It was noted that a Commonwealth Commissioner should afford particular focus to these children and young people as they fall under Commonwealth jurisdiction. In particular, submitters raised concerns that the current treatment of children and young people in immigration detention breaches Australia's international obligations regarding human rights.63

4.46 ChilOut - Children Out of Immigration Detention (ChilOut), noted that a Commonwealth Commissioner is needed for those children and young people who fall under Commonwealth jurisdiction:

Currently, there is no agency or commission with the responsibility to protect and advocate for the rights of children being held under

Commonwealth jurisdiction, specifically children held in immigration detention centres. As there are no Commonwealth child protection laws, this results in children in immigration detention being denied the basic protections of state child abuse laws, or even codified minimum standards of conditions for their detention.64

4.47 The Department of Immigration and Citizenship (DIAC) informed the committee that external oversight in relation to immigration detention is currently earned out by the Commonwealth and Immigration Ombudsman, the AHRC and the

UN High Commissioner for Human Rights. DIAC submitted:

While DIAC certainly supports the maintenance of strong external accountability mechanisms, DIAC queries the value of an additional layer

62 PLAC, Submission 82, p. 3.

63 See for example: Hotham Mission Asylum Seeker Project, Submission 34, pp 2-8; ECA, Submission 26, p. 2; Mi- Tony Arch, Submission 1, pp 1-2; Ms Grace Gorman, Submission 3, p. 1; Mi" George Winston AM, Submission 5, p. 1; Ms Jean Jordan, Submission 6, p. 1; Mr Rodney Selden, Submission 7, p. 1; and Ms Sue Hoffman, Submission 8, p. 1.

64 ChilOut - Children Out of Immigration Detention (ChilOut), Submission 63, p. 3.

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of oversight in this area, which is likely to duplicate the role already performed by the Ombudsman and the Australian Human Rights Commission.6

4.48 Mr David Manne, appearing on behalf of ChilOut, took issue with DIAC's view that no extra layer of oversight is necessary:

There is no body in Australia that has the role of reviewing individual cases of minors in detention and reporting publicly unless the detention has gone beyond two years.

...the Ombudsman does not have that role. The Ombudsman has the role of reviewing detention at six month periods. What I am saying is that there is no body that is required to review individual cases and then report publicly unless the detention is two years or more. The idea that somehow that is adequate and that we do not need further oversight beggars belief.65 66

4.49 Dr Wendy Southern, Deputy Secretary of DIAC, responded to these concerns, stating that while there is no legal requirement for DIAC or the minister to act on the recommendations of the Ombudsman's reports, the six-monthly review and the review after two years are not the only reviews which take place:

The review that occurs after a child or any other detainee has been in detention for six months is a report from us to the Ombudsman. In the period before that we have processes which involve the individual case management of all clients...Internally and there is a high level of scrutiny within the department of how the cases are being managed. Yes, the external scrutiny takes place at six months for a formal report but as I said the Ombudsman has the capacity at any time to visit detention centres * those visits happen regularly *and to report on own motion inquiries, so the capacity is there for the Ombudsman to do that at any time.67

4.50 Ms Branson explained to the committee that the AHRC cannot provide the dedicated focus on children and young people that a Commonwealth Commissioner could:

Both the Australian Human Rights Commission and the Ombudsman have legitimate concerns about the rights of children generally and in immigration detention. At the commission we can entertain complaints from children who are held in immigration detention but we do not believe that what we are able to do, with the resources we have, is adequate for all

of the things that we feel can be done by a specialist and appropriately resourced Commonwealth commissioner for children and young people in this area...without a commissioner with a special focus solely on children

65 Department of Immigration and Citizenship (DIAC), Submission 89, p. 1.

66 Mr David Manne, Executive Director and Principal Solicitor, Refugee and Immigration Legal Centre, appearing on behalf of ChilOut, Committee Hansard, 30 March 2011, p. 17.

67 Dr Wendy Southern, Deputy Secretary, Policy and Program Management Group, DIAC, Committee Hansard, 30 March 2011, p. 28.

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and with resources that are dedicated to that purpose, the range of activities which I have outlined in my opening statement and set out in our submission cannot be done to the extent that I think children in Australia

deserve to have them done.68

4.51 Further in relation to DIAC's submission that additional oversight is not necessary, Ms Kate Gauthier, Chair of ChilOut, queried whether DIAC's advisory panels have any child welfare experts participating.69

4.52 Some submitters also argued that the powers and functions of the

Commonwealth Commissioner should extend to children and young people held in off-shore processing centres, 'who are, or whose families are, seeking asylum in Australia and where Australia can exercise rights and influence by virtue, for example, of the provision of funding'.70

4.53 Submitters recommended that the legislation should actively uphold the rights of children and young people to not be held in detention, and that paragraph 9(1 )(d) include a reference to the right of children and young people to not be separated from their families.71

4.54 Several submitters emphasised that the Commonwealth Commissioner's functions and powers should extend to "'all children in Australia" regardless of their citizenship or residency status' and therefore suggested that paragraph 9(1 )(a), referring to 'Australian children and young people' be amended to apply to all children in Australia, or 'towards whom Australia has international obligations' regardless of citizenship.72 Further, the Law Council suggested that paragraph 9(l)(d) be broadened to include all asylum seekers not just those in detention.73

4.55 In a similar vein, Berry Street suggested that the legislation should use the term 'refugee' so as not to limit the purview of the Commonwealth Commissioner to children and young people who anive unaccompanied, who are being held in detention or whose parents are being held in detention. Berry Street stated:

Australia has obligations, both legal and moral, to these children and young people regardless of where they are held or live after their arrival. Refugee

68 Ms Branson, AHRC, Committee Hansard, 30 March 2011, p. 24.

69 Ms Kate Gauthier, Chair, ChilOut, Committee Hansard, 30 March 2011, pp 20-21.

70 Families Australia, Submission 17, p. 11. See also: Relationships Australia, Submission 25, p. 2; Australian Association of Social Workers, Submission 44, p. 1; and ChilOut, Submission 63, p. 6.

71 PeakCare, Submission 28, p. 2; and ECA, Submission 26, p. 2.

72 Law Council of Australia, Submission 78, p. 16; and AHRC, Submission 50, pp 4-5. See also: People with Disability Australia, Submission 70, p. 4; Save the Children Australia, Submission 57, p. 4; YACVic, Submission 92, p. 4; and MYAN, Submission 84, p. 4.

73 Law Council of Australia, Submission 78, p. 17.

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children and young people placed in community based settings should fall within the areas of concerns for the Commissioner.74

Guardianship of unaccompanied minors

4.56 The provision in the Bill for the Commonwealth Commissioner to act as the legal guardian of unaccompanied children and young people who arrive in Australia without authority or the requisite visa, in appropriate cases, elicited a great deal of comment. While many submitters held concerns with the current guardianship arrangements, the appropriateness of the Commissioner taking on guardianship responsibilities was debated.

4.57 DIAC explained to the committee that currently, the Immigration (Guardianship of Children) Act 1946 (IGOC Act), provides that the Minister for Immigration and Citizenship will be the legal guardian of 'unaccompanied non-citizen minors who arrive in Australia with the intention of becoming permanent residents'. Under the IGOC Act, the guardian may 'appoint a custodian to provide for the day-toâ day care of a minor'. This allows the minister to delegate guardianship responsibilities to officers within state and territory welfare agencies and to certain DIAC officers.75

4.58 In its submission, Family Voice Australia identified a conflict between the Bill and section 6 of the IGOC Act. The Bill provides that in appropriate cases, the Commonwealth Commissioner will act as the legal guardian of such unaccompanied minors, while under the IGOC Act, the minister has this responsibility. Family Voice Australia notes that the Bill makes no provision to amend the IGOC Act to specify that the minister will not be the legal guardian of such children in cases in which it is deemed appropriate that the Commonwealth Commissioner act as the legal guardian.76

4.59 DIAC also noted concern that the Bill does not mention how it will interact with the IGOC Act, and therefore 'appears to set up a dual guardianship regime'.77

4.60 CSSA argued that the existing guardianship legislation should be upheld, and did not support the Commonwealth Commissioner having a guardianship role.78 However, several submitters commented that the current arrangements under which the Minister for Immigration and Citizenship is the guardian of unaccompanied minors, and also has functions in relation to determining the granting of visas,

74 Berry Street, Submission 74 , p. 5.

75 DIAC, Submission 89, p. 3.

76 FamilyVoice Australia, Submission 18, p. 5.

77 DIAC, Submission 89, p. 3.

78 CSSA, Submission 42, p. 2.

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constitutes a conflict of interest, and should be reviewed.79 The AHRC outlined the reasons for its concerns as follows:

The Commission has for many years raised concerns about these

arrangements. In the Commission *s view, they create a fundamental conflict of interest. It is not possible for the Minister or a DIAC officer to ensure that the best interests of an unaccompanied minor are their primary consideration when they are simultaneously the child *s legal guardian, the

detaining authority and the visa decision-maker.80

4.61 DIAC submitted that it is aware of the potential perception of a conflict of interest under the current arrangements. Consequently, 'DIAC has been exploring alternative ways in which the IGOC Act could better meet the objective of providing for the care and welfare of unaccompanied minors'.81

4.62 The Office of the United Nations High Commissioner for Refugees (UNHCR) noted that under UNHCR's Procedural Standards for Refugee Status Determination, The Handbook on Procedures and Criteria for Determining Refugee Status, and article 3 of the CRC, any decision taken should be in the best interests of the child. The UNHCR noted its concern that the 'same authority which is detaining,

determining refugee status and deporting is the same authority which is meant to be representing the child *s best interests'. Consequently, the UNHCR was of the view that:

...the Government of Australia should review guardianship arrangements for unaccompanied minors to ensure their interests are fully considered and no actual or potential conflict of interest arises. One possibility would be to appoint an independent Commissioner along the lines proposed in the Commonwealth Commissioner for Children and Young People Bill 2010.82

4.63 However, other submitters supported the Commonwealth Commissioner acting as the legal guardian for such unaccompanied minors.83 CAPRA suggested that guidance on what would constitute an 'appropriate case' for the Commonwealth Commissioner to act as the legal guardian of unaccompanied minors would be beneficial. Further, CAPRA noted that it may be worthwhile to specify that:

79 See for example: United Nations High Commissioner for Refugees (UNHCR), Submission 61, pp 2-3; Law Council of Australia, Submission 78, p. 17; ChilOut, Submission 63, pp 5-6; Refugee Council of Australia, Submission 69, pp 2-3; MYAN, Submission 84, pp 4-5; AHRC, Submission 50, pp 9-10; and Victorian Legal Aid, Submission 85, p. 2.

80 AHRC, Submission 50, pp 9-10.

81 DIAC, Submission 89, p. 3,

82 UNHCR, Submission 61, pp 2-3.

83 Youth Advocacy Centre (YAC), Submission 12, p. 1; and The Employment Law Centre of Western Australia, Submission 33, p. 5.

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...in acting in such a capacity, the Commissioner must undertake any such statutory duties independently and with regard to advocating for and protecting the rights, welfare and interests of the child.84

4.64 Although the current arrangements were not satisfactory to a large number of submitters, some submitters did not support the Commonwealth Commissioner becoming the guardian of unaccompanied minors as this too may present a potential conflict of interest, and could overburden the Commissioner/5 Rather, it was

suggested that the Commonwealth Commissioner should:

...have oversight of the quality of care provided to children and young people by the relevant authorities who currently provide that function, to ensure that their rights are observed and respected in decisions made on their behalf.86

4.65 Other submitters suggested an alternative for the legal guardianship of unaccompanied minors should be considered.87 Referencing Recommendation 3 of the AHRC's report A Last Resort?, ChilOut suggested that a possible alternative could be to move guardianship responsibilities to the Minister for Families, Housing, Community Services and Indigenous Affairs:

Guardianship of unaccompanied minors should not rest with an independent Commissioner for Children and Young People. Rather it should be transferred from the Minister for Immigration to a Minister for

Children and Young People, ideally, but in the absence of such a position, the Minister for Families, Housing, Community Services and Indigenous Affairs. The Minister would then engage FaHCSIA in the care of unaccompanied children. Direct responsibility would then be delegated to members of a panel of advisers funded by FaHCSIA, but staffed by a community organisation.88

4.66 Ms Rosemary Budavari, representing the Law Council of Australia, noted a difficulty with this solution, as:

...the Minister for Families, Housing, Community Services and Indigenous Affairs has an enormous portfolio already, although it could be said that some of the work of that department would be quite relevant to the care of

84 CAPRA, Submission 35, p. 5. See also MYAN, Submission 84, pp 4-5; and DIAC, Submission 89, p. 4.

85 See for example: The South Australian Council for the Care of Children, Submission 71, p. 2; Families Australia, Submission 17, p. 14; Law Council of Australia, Submission 78, pp 17-18; Save the Children Australia, Submission 57, p. 4; NSW Government, Submission 91, pp 3-4; ChilOut, Submission 63, pp 5-6; and UnitingCare Australia, Submission 67, p. 6.

86 Relationships Australia, Submission 25, p. 2. See also Families Australia, Submission 17, p. 14; and Mission Australia, Submission 56, p. 12.

87 Law Council of Australia, Submission 78, pp 17-18; NSW Government, Submission 91, p. 4; Save the Children Australia, Submission 57, pp 3-4; and ChilOut, Submission 63, pp 5-6.

88 ChilOut, Submission 63, pp 5-6.

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children. For state and territory ministers with responsibility for child protection, the difficulty is that those ministers and departments are quite well known as being overwhelmed with the amount of child protection work that there already is at the state and territory level. They would need to be further resourced to provide a role in relation to unaccompanied

" 89

minors.

4.67 Ms Gauthier, representing ChilOut explained that the Commonwealth Commissioner could only effectively review and oversight the minister as guardian if they were endowed with enforceable powers under the legislation, stating, 'It would be great if the children *s commissioner had enforceable powers. But, if they do not, we do not think it will go far enough to protect children1.89 90

4.68 Further, Mr Manne noted that ministerial guardianship of unaccompanied minors is still problematic, regardless of the portfolio of the minister:

Our position on this is that no minister should be responsible, that the fundamental problem that we continue to confront is the one that you have alluded to; that any minister of government *sitting in cabinet or otherwise, whether it be the FaHCSIA minister or a special new ministerial portfolio * is not sufficiently independent from the whole of government and

government policy.91

4.69 Mr Pocock of Berry Street, suggested that a Commonwealth guardian for children and young people should be created as a separate role:

If there is a need for there to be a guardian in particular for unaccompanied minors and refugee children and young people then our view would be that the Commonwealth should establish such a guardian for those children and young people and not have that function absorbed within the functions of a

commissioner who is supposed to be independently monitoring the performance of the Australian government and other governments in relation to securing the rights of children and young people.92

4.70 DIAC also queried the capacity of the Commonwealth Commissioner to provide the care required of a guardian for the volume of minors that the minister is currently responsible for, especially as the Bill does not provide for the delegation of guardianship.93 The AHRC suggested that if the Commonwealth Commissioner is to

become the legal guardian of unaccompanied minors in immigration detention, the Commission must be sufficiently resourced, and have staff with adequate expertise to ensure that the role is carried out effectively. Further any delegation of guardianship

89 Ms Rosemary Budavari, Co-director, Criminal Law and Human Rights Unit, Law Council of Australia, Committee Hansard, 29 March 2011, p. 21.

90 Ms Gauthier, ChilOut, Committee Hansard, 30 March 2011, p. 19.

91 Mr Manne, ChilOut, Committee Hansard, 30 March 2011, p. 18.

92 Mr Pocock, Berry Street, Committee Hansard, 29 March 2011, p. 14.

93 DIAC, Submission 89, p. 4.

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responsibilities should be to 'appropriately qualified individuals who reside in close proximity to places of detention1.94 95

4.71 Australian Children's Commissioners and Guardians (ACCG) expressed the view that guardianship requires 'specialist and technical knowledge' and should be arranged through agreements with state governments.93 Ms Elizabeth Fraser, representing ACCG elucidated further at the hearing:

It is a very different area, you have obviously got different cultural backgrounds that you are dealing with, so I think there would have to be quite a bit of thinking about how you were going to appropriately move into that space and advocate or connect with young people. A lot of what commissioners do is try to bring forth the point of view of young people and children and what the impacts are on them, as opposed to broadly advocating for the service environments.96

4.72 This was supported by the AHRC, as Ms Branson explained:

We do not have a position on exactly who should take on this

responsibility, but it is imperative that it be a person with specific expertise who is located, as I have said, as close as practicable to the facilities in which the child is detained. Consideration should be given, we suggest, to entering into arrangements with state and territory child protection agencies

and the organisations who undertake guardianship responsibilities on their behalf.97

4.73 One submitter noted that improving the response to unaccompanied minors is a complex task, and is not resolved by simply transferring guardianship of the minors:

It has implications for the development and funding of suitable services, negotiating with relevant state and territory departments regarding their role, accessing and funding legal services, interacting with the Australian Federal Police, complaints handling, access to income support to identify a few.

This complexity suggests that unaccompanied minor children would be better served if the Commissioner *s role was to assist the various government agencies develop an improved systemic response to unaccompanied minors, rather than provide individual case management that other agencies are more suited to providing.98

94 AHRC, Submission 50, pp 9-10. See also YACVic, Submission 92, pp 4-5; and MYAN, Submission 84, pp 4-5.

95 ACCG, Submission 20, pp 2-3; and NSW Ombudsman, Submission 90, p. 1.

96 Ms Elizabeth Fraser, Queensland Commissioner for Children and Young People and Child Guardian, ACCG, Committee Hansard, 29 March 2011, p. 6.

97 Ms Branson, AHRC, Committee Hansard, 30 March 2011, p. 23.

98 Ms Calvert AO/ National Foundation for Australian Women/ NIFTeY, Submission 24, p. 3.

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Reporting and recommendations

4.74 While subparagraph 9(1 )(c)(iii) provides that the Commonwealth Commissioner can undertake inquiries and report to Parliament, a series of submitters called for the Commissioner's reporting abilities to be extended, and that related powers should be afforded to the position. Submitters argued that the Commonwealth Commissioner should be provided the ability to initiate reviews, inquiries or research, possibly tlnough an own motion power, and determine its own priorities. In addition, submitters called for the Commonwealth Commissioner to be afforded adequate powers to obtain information, make recommendations and expect responses from government. In particular it was suggested that the Commonwealth Commissioner should have the capacity to examine and make recommendations on 'issues of

systemic concern', and this should be explicitly reflected in the Bill."

4.75 While submitters supported the power provided in the Bill for the

Commonwealth Commissioner to review laws and policies affecting children and young people, it was argued that the Bill should specifically provide that the Commonwealth Commissioner can make suggestions and recommendations to relevant ministers on potential policy or legislation.1"

4.76 ATSILS suggested that recommendations and feedback from the

Commonwealth Commissioner should be a standing agenda item at meetings of the Standing Committee of Attorneys General.99 100 101

4.77 The Law Society of New South Wales noted particular concern that as currently drafted, the Bill may not adequately empower the Commonwealth Commissioner to perform its duties and functions. It was therefore submitted that the Commonwealth Commissioner should be able to initiate proceedings on their own accord, and compulsorily require the production of information from individuals, agencies and other bodies.102 If this is to be implemented the Law Council urged the

'consideration of necessary protections for persons or bodies subject to the exercise of the powers'.103

__________________________________________________________________________________________________________59

99 Centre for Excellence in Child and Family Welfare, Submission 13, p. 2. See also: AHRC, Submission 50, p. 7; ATSILS, Submission 22, pp 3 and 6; Mission Australia, Submission 56, pp 7 and 12; Mallesons Stephen Jaques Human Rights Law Group, Submission 80, pp 11-13; and Law Council of Australia, Submission 78, pp 16-17 and 21.

100 See for example: The Employment Law Centre of Western Australia, Submission 33, p. 4; AHRC, Submission 50, p. 7; Law Council of Australia, Submission 78, pp 16-17 and 21; Youth Legal Service, Submission 19, p. 5; ALSWA, Submission 15, p. 1; ACWA, Submission 16, p. 2; and YMCA, Submission 64, pp 8-9.

101 ATSILS, Submission 22, p. 5.

102 The Law Society of New South Wales, Submission 60, p. 1.

103 Law Council of Australia, Submission 78, p. 21.

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Research

4.78 Submitters also called for further detail of the Commonwealth

Commissioner's role in relation to research, as currently, the Bill simply provides that the Commissioner is to conduct research. Various submitters suggested that a key function of the office should be to facilitate research to promote best practice. Play Environment Consulting expressed concern that the Bill does not identify 'how the commissioner would be expected to access research - or even to promote research

into gap areas - in order to bring children *s wellbeing into line with international and national findings'.104

4.79 In light of this the Law Council suggested that the functions of the

Commonwealth Commissioner include that ability to:

...undertake research and other programs on behalf of the Commonwealth, for the purpose of promoting the rights of children and young people, and to co-ordinate any such programs undertaken by any other persons, or authorities on behalf of the Commonwealth...105

4.80 It was also submitted that the Commonwealth Commissioner should not undertake research themselves, but rather:

...should collate and use existing research across a broad range of

disciplines, identify areas for further research relating to children and young people, and ensure that data collection mechanisms are adequate and appropriate. The Commissioner should be involved in advocating for

greater investment in research and monitoring (indicator) data on children and young people.106

Receiving complaints

4.81 While no such function is currently included in the Bill, some submitters suggested that the Commonwealth Commissioner should be able to receive, investigate and act on complaints about breaches of children's rights. Submitters noted that while currently the AHRC can receive such complaints, its mandate in this regard is limited, and a complaints process under the Commonwealth Commissioner could be

specifically designed for, and in consultation with, children and young people.107

104 Play Environment Consulting, Submission 21, p. 1. See also: Youthlaw, Submission 27, p. 4; Ms Calvert AO/ National Foundation for Australian Women/ NIFTeY, Submission 24, p. 4; Youth Legal Service, Submission 19, p. 5; and ACWA, Submission 16, p. 2.

105 Law Council of Australia, Submission 78, pp 16-17. See also NSW Government, Submission 91, p. 4.

106 NCYLC/ ARACY/ UNICEF Australia/ NACLC, Submission 79, pp 15-16.

107 See for example: CREATE Foundation, Submission 30, p. 2; WEAVE, Submission 48, p. 10; The Employment Law Centre of Western Australia, Submission 33, p. 4; Children's Hospitals Australasia, Submission 41, p. 3; Save the Children Australia, Submission 57, pp 3-4; HRLRC, Submission 51, pp 7-8; and ALSWA, Submission 15, p. 2.

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4.82 The Salvation Army commented that the UN Committee on the Rights of the Child has specified a series of functions that an 'independent national human rights institution involved in the promotion and protection of the rights of the child' should have, and one of those functions is to 'receive complaints of breaches of children's rights'. In light of this, it was suggested that even if the Commonwealth Commissioner does not have jurisdiction to respond to a complaint, the Commissioner:

...should play a part to ensure other adequate responses are available to challenge individual violations of children *s rights. This includes, reviewing children *s access to and effectiveness of the courts and other existing localised complaint mechanisms.108

4.83 NAPCAN supported this view, stating that the Commonwealth Commissioner should have 'the ability to review children *s access to, and the effectiveness of, all forms of advocacy and complaints systems'.109

4.84 However, other submitters argued that the Commonwealth Commissioner should not deal with individual complaints, due to concerns that focussing on individual cases will overburden the Commonwealth Commissioner and constrain their ability to advocate for systemic change in policy, legislation and programs. It

was suggested by some submitters that complaints should continue to be received by the AHRC, state and territory commissioners and guardians, or Ombudsman rather than the Commonwealth Commissioner.110

4.85 The AHRC explained the current complaints system for children and young people as follows, and recommended that the AHRC continue to manage complaints regarding children's rights:

In Australia, children and young people can already make a complaint about some human rights breaches. For example, children can make a complaint to the Australian Human Rights Commission if they feel they have been discriminated against on the grounds of age, race, sex or

disability. The Australian Human Rights Commission has a more limited mandate to investigate complaints where an action by the Commonwealth is alleged to have breached or infringed a right contained in the CRC.111

4.86 People with Disability Australia suggested that the Commonwealth Commissioner, established as part of the AHRC, should be able to receive and

108 Salvation Army, Submission 23, p. 5. See also NCYLC/ ARACY/ UNICEF Australia/ NACLC, Submission 79, pp 10-12.

109 NAPCAN, Submission 47, p. 3.

110 Ms Calvert AO/ National Foundation for Australian Women/ NEFTeY, Submission 24, p. 5; Youth Legal Service, Submission 19, p. 5; Law Council of Australia, Submission 78, p. 20; and AHRC, Submission 50, p. 9.

111 AHRC, Submission 50, p. 9.

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investigate complaints, therefore the AHRC should retain its current role of receiving complaints under the UN CRC.112

4.87 The Law Council also supported the AHRC retaining the responsibility for receiving individual complaints even if the Commonwealth Commissioner is not established within the AHRC, despite the limitations on its process, suggesting that 'it may be preferable for the limitations of the AHRC complaints handling process to be addressed rather than establishing a separate complaints handling process for the Commissioner'.113

Other suggested functions

4.88 The Australian Association of Social Workers recommended that the Commonwealth Commissioner should also have the ability to examine the adequacy of and make recommendations regarding 'the workforce that support children and young people, its skills and qualifications in Commonwealth, State and Territory

" I 114

services.

4.89 The National Council of Single Mothers and their Children argued that the Commonwealth Commissioner must also have a role in examining the adequacy of income support for children, as '[pjoverty in early childhood has been identified as the single most important contributing factor to adverse outcomes for children'.113

112 People with Disability Australia, Submission 70, p. 4.

113 Law Council of Australia, Submission 78, p. 20.

114 Australian Association of Social Workers, Submission 44, p. 2.

115 National Council for Single Mothers and their Children, Submission 55, p. 3.

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CHAPTER 5

Committee view and recommendations

The need for a commissioner for children and young people

5.1 The committee acknowledges the strong arguments put forward supporting the establishment of a Commonwealth Commissioner for Children and Young People (Commonwealth Commissioner). However, the evidence received by the committee pointed to a range of concerns with the provisions of the Commonwealth

Commissioner for Children and Young People Bill 2010 (the Bill). The committee also notes that the Australian Government is currently considering the role of a National Children's Commissioner under the National Framework for Protecting Australia's Children.

5.2 The committee is of the view that, given the concerns raised in relation to the Bill, the establishment of a Commonwealth Commissioner should be further considered. The committee therefore considers that the Bill should not be passed.

However, the committee believes that the matters raised during the inquiiy should be given full consideration in the Government's deliberations on the role of a National Children's Commissioner.

Model and structure

5.3 During the inquiry, the committee received evidence on the various models proposed for the Commonwealth Commissioner, and considers that there are advantages in adopting a broad approach. In particular, the committee sees benefit in the focus on early intervention and prevention under a public health model.

5.4 The committee acknowledges the advantages and disadvantages identified by submitters regarding the possible establishment of the Commonwealth Commissioner for Children and Young People within the Australian Human Rights Commission (AHRC). While the committee notes that a Commonwealth Commissioner could be adequately accommodated in the AHRC, if this approach is taken, care will be needed to ensure that the independence and the functions and powers of the proposed Commissioner will not be affected. In addition, the AHRC will require adequate resourcing to accommodate this extra role.

Definition of children and young people

5.5 The Bill defines the term 'child' when used in relation to the United Nations (UN) Convention on the Rights of the Child (CRC), as 'a person below the age of 18 years',1 and is consistent with the defmition in the UN CRC. However, the UN more generally defines a child as a person under the age of 15 and youth as people

1 Commonwealth Commissioner for Children and Young People Bill 2010, cl. 5.

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between the ages of 15 and 24. Submitters raised concerns about the need for support of those people transitioning to independence between the ages of IS to 25, particularly those leaving out-of-home care. In light of these matters, submitters generally agreed that the Commonwealth Commissioner's powers and functions

should be extended to encompass people 25 years of age or younger. The committee also notes that the definition of 'child' and 'young person' varies in legislation across all jurisdictions.

5.6 The committee considers that careful consideration should be given to the definition of 'child' and 'young people' in any legislation to establish a Commonwealth Commissioner. In addition, the committee considers that significant implications arise from the inconsistent definitions used by jurisdictions and that any Commonwealth Commissioner should work with the states and territories to establish an agreed definition.

Interaction with state and territory commissioners and guardians

5.7 The possible duplication of functions between a Commonwealth

Commissioner and the state and territory commissioners and guardians was raised by a number of submitters. Other submitters did not support this view and argued that there is a role for a Commonwealth Commissioner to provide oversight of policy areas within the Commonwealth's jurisdiction, and monitor rights and wellbeing issues regarding children and young people at a national and international level. It was also noted that the responsibilities and functions of state and territory commissioners and guardians varied, and that a Commonwealth Commissioner could play a valuable role in providing oversight of areas in which state and federal systems either leave gaps or overlap, and in advocating for all states and territories to operate at the same best practice level.

5.8 The committee considers that any proposed Commonwealth Commissioner must complement the roles and functions of the state and territory commissioners and guardians. A cooperative and collaborative arrangement will ensure that matters related to children and young people, particularly vulnerable children and young people, are addressed in a comprehensive way. In order to facilitate this approach, the

committee agrees that the scope of any proposed Commonwealth Commissioner's role, powers and functions must be clearly drafted in any enabling legislation, and that the delineation between the responsibilities of the state and territory commissioners and guardians and those of the Commonwealth Commissioner must be unambiguous.

Independence and reporting requirements

5.9 The committee notes calls for the Commonwealth Commissioner to be adequately resourced, and that the resourcing and appointment of the Commonwealth Commissioner should not be unduly dependent on the minister or the Government, to ensure the independence of the office. The committee believes that such matters should be taken into consideration in the establishment of any National Children's Commissioner.

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5.10 In relation to reporting requirements, submitters argued that the Commonwealth Commissioner should report directly to Parliament rather than reporting to the minister and the minister then tabling the report in the Parliament as proposed by the Bill. The committee notes that the AHRC reports to the Parliament

through the minister.

5.11 Another matter of significant concern was the proposal contained in the Bill that the Commonwealth Commissioner produce Australia's report to the UN Committee on the Rights of the Child. This was seen as potentially compromising the Commonwealth Commissioner's independence and as an alternative approach it was suggested that the Commonwealth Commissioner could review the report produced by the Australian Government and either provide comment, or publicly report on the Australian Government's report, or provide an alternative, publicly available report to the UN Committee on the Rights of the Child if required.

5.12 The committee acknowledges suggestions from submitters that the statutory review period be extended to allow for a review which will encompass a complete cycle of the Commonwealth Commissioner's functions, including a report to the UN Committee on the Rights of the Child.

Functions and powers

5.13 The committee acknowledges the breadth of evidence received calling for clearer and more concise provisions concerning the role, functions and powers of a Commonwealth Commissioner and that any Commonwealth Commissioner should be provided with adequate powers to effectively undertake their functions. In particular, it was argued that a Commonwealth Commissioner would perform their functions more effectively if they were granted the ability to initiate reviews, inquiries and research, and were empowered to make recommendations and require the production of information from individuals, agencies and other bodies.

5.14 The committee notes the suggestion of the Law Council of Australia that many of the concerns raised regarding the role, powers and functions of the Commonwealth Commissioner could be addressed if the proposed functions were

drafted in line with those which apply to the AHRC.

5.15 A matter raised by many submitters was the guardianship of unaccompanied non-citizen minors. Currently, the Minister for Immigration and Citizenship acts as the legal guardian of unaccompanied non-citizen minors who arrive in Australia with the intention of becoming permanent residents.

5.16 The minister's role as the legal guardian of unaccompanied minors, and how this interacts with the minister's responsibilities in determining the granting of visas was canvassed in evidence. However, as discussed in chapter 4, the committee notes that the Department of Immigration and Citizenship is looking at alternatives for the

legal guardianship of unaccompanied minors. One of the alternatives, as outlined in the Bill and supported by some submitters, was that this function be undertaken by the Commonwealth Commissioner. However, not all submitters supported this approach

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as it was argued that this may create a conflict of interest, and that a more appropriate role for the Commonwealth Commissioner is to provide oversight of the entity acting as the legal guardian of such minors.

5.17 In order to overcome concerns with such a conflict of interest, submitters suggested either the creation a separate Commonwealth guardian, for children and young people who do not fall within the jurisdiction of state and territory guardians, or that the Commonwealth arrange legal guardianship through the state and territory systems. The committee is of the view that a Commonwealth Commissioner should not act as the legal guardian of unaccompanied minors - rather any proposed Commonwealth Commissioner should have oversight of the entity acting as guardian, to ensure the rights and wellbeing of children and young people are upheld.

5.18 The committee recognises that the AHRC currently manages complaints regarding breaches of children's human rights. Some submitters commented that the Commonwealth Commissioner should be empowered to receive complaints. However, the committee notes concerns raised that requiring a Commonwealth Commissioner to manage the complaints process will overburden any such office. The committee

further notes that the UN Committee on the Rights of the Child requires that the national human rights institution responsible for the protection of the rights of children should receive complaints regarding the breach of the rights of a child. The committee

also acknowledges the Law Council of Australia's suggestion of addressing the limitations of the AHRC's complaints handling process, and empowering the Commonwealth Commissioner to review the adequacy of, and access to, such complaint mechanisms. In the committee's view, any proposed Commonwealth Commissioner should be adequately resourced to receive and investigate complaints regarding the breach of the rights of children and young people.

5.19 The committee received suggestions for the expansion, clarification, refinement, and addition of various functions and powers of the Commonwealth Commissioner as proposed in the Bill, summarised below. In view of the evidence received, the committee suggests that in considering whether to establish a National Children's Commissioner, the Australian Government should give consideration to the merits of providing any such Commissioner with the following functions and powers:

" monitoring and examining Commonwealth laws, policies, programs and funding, and their interaction with state and territory laws, policies, programs and funding;

" monitoring compliance with the UN CRC;

" monitoring the implementation of, and progress against, the National Framework for the Protection of Children;

" coordinating an integrated and nationally consistent approach to issues affecting children and young people;

" coordinating and facilitating research, and identifying areas for, and promoting further, research;

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" promoting and undertaking public education programs about: the rights of children, childhood development, protecting the rights and wellbeing of children, and the UN CRC;

" developing a model/mechanism to facilitate the engagement of children and young people in consultation processes and decision-making;

" intervening in legal proceedings involving the rights of children and young people, but only with the leave of the court hearing the

proceedings, and subject to any conditions imposed by that court;

" a focus on particularly vulnerable children and young people, especially Aboriginal and Torres Strait Islander children and young people, those with disability, children and young people seeking asylum, and children and young people in out-of-home care, but not to the exclusion of other children and young people;

" providing oversight of guardianship arrangements for unaccompanied children and young people who arrive in Australia without the requisite visa or other authority for entry into Australia;

" the ability to initiate reviews, inquiries or research, and make

recommendations;

" the ability to require the production of information from individuals, agencies and other bodies; and

" receiving and investigating complaints regarding the breach of the rights of children and young people.

Conclusion

5.20 The committee's inquiry drew out many issues in relation to the establishment of a Commonwealth Commissioner. This ranged from support for the establishment of a Commonwealth Commissioner to assist Australia in meeting its international obligations, to very specific proposals to amend the functions and powers proposed in

the Bill.

5.21 Although the committee does not support the Bill in its present form, the committee considers that the evidence received will provide a valuable contribution to the Government's deliberations on the role of a National Children's Commissioner under the National Framework for Protecting Australia's Children. The committee

keenly awaits the outcome of those deliberations.

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Recommendation 1

5.22 In light of the Australian Government's current consideration of a National Children's Commissioner, the committee recommends that the Bill not be passed.

Senator Trish Crossin

Chair

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DISSENTING REPORT BY THE AUSTRALIAN GREENS

Introduction

1.1 The Australian Greens consider that the welfare and best interests of children should be front and centre of Government decision making. We know that failure to address issues of disadvantage in early years can have lasting consequences for adulthood.

1.2 The Commissioner would tackle problems such as child abuse, neglect, poor education, poverty, youth homelessness and social disadvantage. The Commissioner would also provide a voice for young people, a means of communication with Government, and a simple avenue for complaint for ill-treatment.

1.3 The Bill would assist Australia in meeting its international obligations, in particular, its obligations under the United Nations Convention on the Rights of the Child.

1.4 In developing the Bill, the Australian Greens worked closely with Save the Children Australia who have been advocating for this reform for some time.

1.5 The Greens wish to recognise the contribution of the child & youth and human rights advocacy sectors to this inquiry. While there was overwhelming support for the Bill, a number of submissions identified areas for improvement. We welcome these suggestions and consider many of these would enhance the Bill. It is a testament to the effectiveness of the committee process that some constructive amendments have been advanced.

1.6 We do note that despite the clear support of a majority of submitters, the committee is recommending that their evidence simply be fed into discussions around the Government *s National Framework for Protecting Australia *s Children.

1.7 Rather than being deferred to another long term process of deliberation, the Greens consider issues of children *s rights and welfare necessitate a more immediate and targeted response.

1.8 This is not a new proposal. It has been on the agenda at a community and

parliamentary level for some time. In fact the first Bill was proposed almost a decade ago. There is a pressing need for an independent Commissioner to ensure that children and young people are not neglected during Government decision making.

1.9 While the Government *s own framework will play an important role in a national conversation about how best to advance the rights and interests of children, it can be no substitute for an independent Commissioner, appropriately resourced to have regards for these issues at a national level.

Concerns with the Bill

Focus of the Commissioner

1.10 Many submitters expressed concern that the Commonwealth Commissioner may be occupied with individual advocacy or potentially duplicate the work of other Commissioners being undertaken in state and territory jurisdictions. The Australian Greens recognise that the Bill in its current form may give rise to this potential. This is not the intention of the Bill, rather it was envisaged that the Commonwealth Commissioner would complement existing work and focus not on individual cases, but advocate for system-wide approaches.

Recommendation 1

1.11 To give greater clarity to the role and function of the Commonwealth Commissioner the Australian Greens recommend that Section 9 (h) be removed.

Children and young people with disabilities

1.12 The Australian Greens recognise that the concerns of some of the submitters (National Disability Services, Novita Children's Services) that children and young people living with disability were not mentioned expressly. In particular, it was asserted that this is *critical in the context of requiring domestic legislation to reflect and implement international commitments and obligations. **1

1.13 It was always the intention of the Greens for the Commissioner to advocate on the issues affecting children and young people living with a disability. We recognise the sector *s view that this intention could be better reflected by expressly noting children and young people with disabilities as being within the Commissioner *s remit and we support this amendment.

Recommendation 2

1.14 The Australian Greens recommend that the inclusion of children and young people with disabilities should be made in Section 3 and in Section 9 of the Bill, by reference to them and to Article 23 of UNCRC.

Aboriginal and Torres Strait Islander Children and Young People

1.15 The Greens also recognise that Aboriginal and Torres Strait Islander children and young people are among some of the nations' most disadvantaged. There is a need for the Commissioner to have regard for these issues. That is why Aboriginal and Torres Strait Islander Youth are identified in section 9(c)

1.16 A specific Commissioner or Deputy Commissioner to examine these issues was also suggested, and we consider this to be worthy suggestion and would consider

1 Novita Children *s Services, Submission 93, pp 8-9.

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this initiative as something to underpin any Commonwealth Commissioner once in place.

Reporting to the United Nations

1.17 A number of submissions (including the NDS, Australian Association of Social Workers, Law Council of Australia, Save the Children Australia) suggested amendments to the reporting requirements outlined in the Bill. In particular, there was anxiety that the Bill as currently drafted would see the Commissioner report to the United Nations Committee on the R

Title	Foreign Affairs, Defence and Trade Legislation Committee - Senate Standing - Defence Legislation Amendment (Security of Defence Premises) Bill 2010 [Provisions] - Report, dated March 2011
Source	Senate
Date	02-03-2011
Parliament No.	43
Tabled in Senate	02-03-2011
Parliamentary Paper Year	2011
Parliamentary Paper No.	189
System Id	publications/tabledpapers/HPP012016000471c