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Part 1 – Bills introduced 14–23 August 2012

Australian Charities and Not-for-profits Commission Bill 2012

Introduced into the House of Representatives on 23 August 2012
Portfolio: Treasury

Committee view

1.1        The committee notes that the investigation and monitoring powers of the Australian Charities and Not-for-profits Commission (ACNC) override the privilege against self-incrimination. However, as bill provides for use and derivative use immunities in these circumstances, the committee considers that bill appears to be compatible with the right to be free from self-incrimination in Article 14(3) of the International Covenant on Civil and Political Rights (ICCPR).

1.2        Before forming a view on the compatibility of this bill with the right to privacy in article 17 of the ICCPR, the committee seeks clarification from the Treasurer with regard to:

• the privacy safeguards referenced in the statement that would be applicable to the investigative regime established in the bill;
• why it is considered that the standard of ‘reasonably necessary’ is an appropriate threshold for the ACNC Commissioner to exercise information-gathering powers and how this is considered to be consistent with article 17 of the ICCPR, which requires interferences with the right to privacy to be necessary for a legitimate objective;
• whether the explanation provided in the statement of compatibility with regard to the issue of whether the powers in question are reasonable, necessary and proportionate to the legitimate objective of regulating the NFP sector could be reviewed and strengthened.

1.3        Before forming a view on the compatibility of this bill with the presumption of innocence in article 14(2) of the ICCPR, the committee draws the attention of the Treasurer to the limited detail in the statement about the specific offence provisions being discussed. The committee seeks further information about the precise operation of these provisions and their impact on the presumption of innocence, including whether the burden relates to an essential element of the offence. The committee also seeks clarification from the Treasurer with regard to the absence of justification for the strict liability offences in the bill.

Purpose of the bill

1.4        This bill establishes a new independent statutory office, the Australian Charities and Not-for-profits Commission (ACNC) as the Commonwealth regulator for the not-for-profit (NFP) sector. The explanatory memorandum to the bill describes the NFP sector as broadly consisting of entities that seek to achieve a community, altruistic or philanthropic purpose.

1.5        The bill also establishes a new regulatory framework for the NFP sector by:

• charging the ACNC with registering NFP entities (initially charities) and maintaining a register;
• making registration with the ACNC as a necessary precondition for access to certain Commonwealth taxation concessions and a prerequisite for other exemptions, benefits and concessions provided under other Australian laws.
• providing for the powers of the ACNC Commissioner in relation to the regulation of registered entities; and
• setting out the obligations and responsibilities of registered entities.

1.6        Subsections 15‑5(1) set out the objects of the bill, which are ‘to maintain, protect and enhance the public trust and confidence in the NFP sector; to support and sustain a robust, vibrant, independent and innovative NFP sector; and to promote the reduction of unnecessary regulatory obligations on the NFP sector’.

Compatibility with human rights

Right to privacy (Article 17 ICCPR)

Right to be free from self-incrimination (Article 14(3)(g) ICCPR)

Presumption of innocence (Article 14(2) ICCPR)

1.7        The statement of compatibility identifies that the bill engages the right to privacy in article 17 of the ICCPR, the right to be free from self-incrimination in article 14(3)(g) of the ICCPR, and the presumption of innocence in article 14(2) of the ICCPR.

Right to privacy

1.8        The bill provides the ACNC with broad ranging powers to gather information and monitor compliance with the new Act:

• Division 70 of Part 4-1 of the bill sets out the information gathering powers that may be exercised by the ACNC Commissioner to obtain information and documents for the purposes of determining compliance with the Act or determining whether information that is the subject of monitoring is correct.
• Division 75 of Part 4-1 of the bill sets out the monitoring powers that may be exercised by ACNC officers, including the power to enter premises, for the purposes of monitoring compliance with the Act or determining whether information that is the subject of monitoring is correct.

1.9        Article 17 of the ICCPR provides that no one shall be subjected to arbitrary or unlawful interference with their privacy. Information gathering and monitoring powers, as well as collecting, using, storing, disclosing or publishing personal information, amount to an interference with privacy.  In order for the interference not to be ‘arbitrary’, the interference must be for a legitimate objective and be reasonable, necessary and proportionate to that objective.   

1.10      The statement states that these powers are intended to meet the legitimate objective of regulating the NFP sector:

Information contained in the ACN Register must be correct and accurate for the report-once, use-often framework to function effectively and reduce the red-tape faced by NFPs.... [In addition,] to function effectively as a one‑stop‑shop regulator for the sector, the ACNC will need to have appropriate powers to takes (sic) samples of products or inspect items on premises with a view to sharing the information gathered with authorities.

1.11      The statement of compatibility concludes that these provisions are consistent with Article 17 of the ICCPR because privacy interests are protected ‘through having specific conditions that are required to be satisfied prior to using these powers’ and that ‘by providing these additional safeguards, the provisions that facilitate investigation are reasonable and necessary in the circumstances and required to meet the objects of the Bill’.  The committee notes that the statement does not specify what these conditions and safeguards may encompass.

1.12      The committee notes that the ACNC Commissioner can exercise information gathering powers if ‘reasonably necessary’ for the purposes prescribed in the bill (subsection 70-5).  The standard of ‘reasonably necessary’ would appear to be lower than the standard of ‘necessary’ and may not fully reflect the requirement that interferences with the right to privacy must be necessary to achieve a legitimate objective. 

Right to be free from self-incrimination

1.13      The statement of compatibility identifies that the investigation and monitoring powers of the ACNC override the privilege against self-incrimination by providing that, a person is not excused from producing information or documents or answering a question on the grounds that doing so would incriminate him or herself. 

1.14      Article 14(3)(g) of the ICCPR protects the right to be free from self-incrimination by providing that a person may not be compelled to testify against him or herself or to confess guilt.  The right to be free from self-incrimination may be subject to permissible limitations, provided that the limitations are for a legitimate objective, and are reasonable, necessary and proportionate to that objective. 

1.15      Generally, limitations on the right to be free from self-incrimination are more likely to be permissible where the legislation includes constraints on the subsequent use of the incriminating information, such as ‘use’ or ‘derivative use’ immunities.  The bill provides for both these immunities (ss 70-25(2) and 75-40(5)) and having regard to the regulatory functions exercised by the ACNC, the committee considers that overriding the privilege against self-incrimination in these circumstances would appear to be compatible with article 14(3) of the ICCPR.

Presumption of innocence

1.16      Without referencing or discussing the specific offence provisions at issue, the statement of compatibility states that a defendant bears an evidential burden in circumstances where the bill:

• provides for certain exceptions that apply to the general prohibition on the use, disclosure and on-disclosure of information protected under the secrecy framework; or
• places certain obligations and liabilities placed on the responsible entities of registered entities in order to ensure that registered entities and responsible entities are accountable for fulfilling their obligations under this law.

1.17      Article 14(2) of the ICCPR states that everyone charged with a criminal offence shall have the right to be presumed innocent until proved guilty according to law.

1.18      Referring to paragraph 30 of General Comment No 32 by the UN Human Rights Committee, the statement of compatibility says that article 14(2) of the ICCPR 'is normally engaged where public authorities make public statements affirming the guilt of the accused, shackle or keep defendants in cages during trials indicating that they may be dangerous criminals or allow the media to show news coverage that undermines the presumption of innocence' but that it ‘could potentially be argued that where legislation places an evidential burden on the defendant, this may engage the [presumption of innocence]’. 

1.19      The committee notes that paragraph 30 of General Comment No 32  clearly states that:

The presumption of innocence, which is fundamental to the protection of human rights, imposes on the prosecution the burden of proving the charge, guarantees that no guilt can be presumed until the charge has been proved beyond reasonable doubt, ensures that the accused has the benefit of doubt, and requires that persons accused of a criminal act must be treated in accordance with this principle. [emphasis added]

1.20      Generally, consistency with the presumption of innocence requires the prosecution to prove each element of a criminal offence beyond reasonable doubt.  An offence provision which requires the defendant to carry an evidential or legal burden of proof with regard to the existence of some fact will engage the presumption of innocence because a defendant’s failure to discharge the burden of proof may permit their conviction despite reasonable doubt as to their guilt.

1.21      However, reverse burden offences will not necessarily be inconsistent with the presumption of innocence provided that they are within reasonable limits which take into account the importance of objective being sought and maintain the defendant's right to a defence.  In other words, the reverse burden must pursue a legitimate aim and be reasonable, necessary and proportionate to that aim.  Human rights case-law has established that relevant factors to consider when determining if a reverse burden provision is justified include whether:

• the penalties are at the lower end of the scale;
• the offences arise in a regulatory context where participants may be expected to know the duties and obligations;
• the offences only impose an evidential burden; and
• the burden relates to facts which are readily provable by the defendant as matters within their own knowledge or to which they have ready access.  

1.22      While provisions which impose only an evidential burden are more likely to be considered compatible with the presumption of innocence, they will still require to be properly justified, particularly where the burden relates to an essential element of the offence. The committee notes that the statement does not specify or discuss the particular provisions at issue.

1.23      The committee notes that the bill also creates several strict liability offences (see for example, ss 55‑5(7), 75‑95(4), and 100‑25(3)).  Strict liability offences engage the presumption of innocence because they allow for the imposition of criminal liability without the need to prove fault. The statement does not mention these offences or provide any justification for them.

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