2. Outline of the Bill and its referral

The Bill and its referral

2.1
On 7 December 2017, the Prime Minister, the Hon. Malcolm Turnbull MP, introduced a package of national security bills into the House of Representatives. Included were the following bills:
Foreign Influence Transparency Scheme Bill 2017, and
National Security Legislation Amendment (Espionage and Foreign Interference) Bill 2017.
2.2
On 8 December 2017, the Prime Minister referred the bills to the Committee, requesting that the Committee, so far as possible, conduct its inquiry in public.
2.3
This report is the Committee’s review of the Foreign Influence Transparency Scheme Bill 2017 (the Bill).

Purpose of the Foreign Influence Transparency Scheme

2.4
The AttorneyGeneral’s Department (the Department) stated that foreign influence is, in many instances, ‘quite legitimate’. However, when done through an intermediary, the source of the influence is ‘disguised’, and decision-makers and the public alike may be unaware of the influences being brought to bear on Australian Government decision-making.
2.5
The Department explained that the Bill is intended to provide visibility of covert or obscured foreign influence and that a registration scheme will provide transparency to that disguised influence.1 Similarly, the DirectorGeneral of Security, Mr Duncan Lewis, explained the purpose of the Bill as follows:
What we’re dealing with here is the covert—I use the word ‘sinister’—nature of influence which is not apparent then to the Australian public and which results in a decision being taken or an outcome being achieved which the Australian people have not had visibility of.2
2.6
However, at a public hearing the Department advised that a person may nonetheless be liable to register where there has been no ‘covert’ activity or ‘trade craft’ being used to hide their link to a foreign principal.3 Indeed, the Department further advised:
I think a point is that the influence can be hidden, but it is not always hidden; it is not the covert Foreign Influence Transparency Scheme. So the fact that a relationship with a foreign principal may be disclosed is great and to be encouraged, but this is intended to be a comprehensive register … of the nature, extent and level of foreign influence on political and governmental processes on behalf of foreign principals. That’s a valuable source of information.4
2.7
The Explanatory Memorandum states that the objective of the Bill is to,
… provide for a scheme for the registration of persons who undertake certain activities on behalf of foreign governments, foreign businesses and other foreign principals, in order to improve the transparency of their activities on behalf of those foreign principals.5
2.8
The Explanatory Memorandum goes on to outline that the proposed Foreign Influence Transparency Scheme (the Scheme) is intended to provide ‘transparency and oversight of the many and varied ways in which foreign actors seek to exercise influence over Australian political and governmental systems and processes’.6
2.9
The Department described foreign influence as ‘activities conducted on behalf of a foreign principal to pursue their own interests within Australia’.7 It acknowledged that in many cases foreign influence is legitimate and lawful, but that it was ‘problematic’ when foreign influence is hidden or undisclosed through the use of an intermediary. This was described as,
… impeding the ability of decision-makers in government, as well as the public, to fully understand and evaluate the interests being brought to bear in relation to a particular decision or process and to make informed decisions. The Foreign Influence Transparency Scheme will show the public and decisionmakers the foreign influence in Australia’s government and political processes.8
2.10
In a submission, the Department went further stating that undisclosed foreign influence can have ‘serious implications for sovereignty and national policy as it may result in the prioritisation of foreign interests over domestic interests’.9
2.11
The Explanatory Memorandum notes that there is no existing formal mechanism that would require ‘instances of foreign influence to be made known to government and the public’. The Explanatory Memorandum states that while some forms of foreign influence are captured through the Australian Government’s Lobbying Code of Conduct and accompanying Register of Lobbyists, that register ‘primarily target[s] very narrow conduct, being lobbying of government representatives and politicians, [and is] not supported by binding legislative or regulatory frameworks’.10
2.12
A large number of stakeholders supported the objective of the Bill: to provide transparency of the level and extent of covert foreign influence in the course of political and governmental decisionmaking in Australia.11
2.13
ASIO advised the Committee that the Australian public are ‘less welleducated’ about the scale of the threat posed by foreign interference activities.12 To this end, Mr Peter Jennings advocated for more public information and reporting, arguing that a well-informed public which understands the threats faced will ensure greater resilience within the community to those threats.13
2.14
Similarly, Ms Linda Jakobson, Chief Executive Officer and Founding Director of China Matters, advocated for more public information about foreign influence to ‘enable Australians to develop a sophisticated understanding’ of unlawful foreign interference. The submission argued that it is,
… essential in a democratic society that our security agencies develop the practices and skills to be able to communicate with the public on matters that affect our democratic rights, without compromising their operations or detailed intelligence information.14
2.15
Mr Tony Kevin disputed the urgent need for the proposed Scheme,15 and others argued that a case had not been clearly articulated.16 Mr Ernst Willheim questioned the veracity of the problem that the Bill seeks to address, stating that the need for the Bill ‘must be clearly established, the legislation itself should be clear and unambiguous’.17
2.16
The Committee will make comment on these issues in the final chapter of this report.

Conduct of the inquiry

2.17
After receiving the Prime Minister’s referral, the Committee initially agreed to complete its inquiry and report to the Parliament by 20 February 2018, and later extended this date to 23 March 2018.
2.18
The Chair of the Committee, Mr Andrew Hastie MP, announced the inquiry by media release on 15 December 2017 and invited submissions from interested members of the public.
2.19
On 7 June 2018 the Attorney-General provided to the Committee a set of proposed amendments to the Bill. The Committee invited further submissions on these amendments.
2.20
In total, the Committee received 92 submissions, 48 supplementary submissions and a large number of form letters (2 545 total). A list of submissions received by the Committee is at Appendix A.
2.21
The Committee held eight public hearings and two private hearings in Canberra. Details of the hearings are included at Appendix B. The Committee also held three classified briefings.
2.22
Copies of submissions and the transcript from the public hearings can be accessed on the Committee’s website at www.aph.gov.au/pjcis. Links to the Bill and Explanatory Memorandum are also available on the Committee’s website.

Process of the inquiry

2.23
While supporting the intent of the Bill, a number of submitters raised process concerns regarding the timeframe for the inquiry,18 and also the lack of consultation prior to the Bill’s introduction into the Parliament.19
2.24
A number of stakeholders recommended that the Bill be withdrawn from the Parliament—and this Committee’s review—to enable further consideration to be given to the development of a transparency scheme and its effective operation.20
2.25
At a public hearing the Department advised that the Committee’s review of the Bill is in lieu of seeking public comment on an exposure draft prior to introduction in the Parliament.21
2.26
In parallel to the Committee’s review of the Bill, the Department advised that it was consulting with stakeholders and considering issues and concerns raised during the Committee’s inquiry.22 Describing the nature of those consultations, the Department stated:
We’ve been speaking to a range of stakeholders. … We’ve had further discussions to look further into some of the comments that have been made by a number of groups on the amendments, so we’ve benefited from those as well. … Of course any member of the public or the community, an organisation or an individual, is at all times able to provide observations, commentary, whether it be to the minister or to the department, whether there is a consultation process in train or not. Indeed, there are members of particular groups that have approached the department directly, and that’s always open. … There’s not been an open invitation to the public at large … We have approached specific stakeholders who have specific views to explore particular issues that are relevant to those groupings.23
2.27
Despite parallel consultations, the Department advised that the Committee would not be provided amendments to the Bill at that time.24 This was in contrast to the approach taken in the Espionage and Foreign Interference Bill, where proposed amendments were referred to the Committee for its ongoing review of that bill.
2.28
Responding to concerns about parallel processes, the Department stated:
The department continues to consider a range of issues that have been raised in submissions on this bill. … [W]e continue to consider those iteratively as they are lodged iteratively with this committee and as questions are raised with us. As the committee will appreciate, it is an iterative process, and we will advise the Attorney on those issues that are raised and we consider them contemporaneously. It’s certainly our experience in assisting this committee that the committee has asked us to reflect upon those issues that have been raised in submissions, and we’ve endeavoured to be forthright with the committee in indicating where an issue that’s been raised in the submissions is one that might merit some further refinement to the bill. So our intention in flagging that there are areas in which the bill could be amended is both to address those areas where we do not think that there is a concern and indicate that we think that the bill operates as intended and achieves a policy intent but also to flag those areas where a legitimate question has been raised and we acknowledge that perhaps some refinement in the drafting may be required either to achieve the policy intent or to address a concern that’s been raised. That has been an iterative process, and we will continue to consider those issues that are raised in submissions and, indeed, as a result of questions that are asked by this committee which have, naturally, prompted us to consider some issues in the bill, as we have done on previous bills before the committee.25
2.29
Six months into the inquiry the Committee had not been able to report on the proposed Scheme. On 7 June 2018, the Attorney-General provided to the Committee a set of proposed amendments to the Bill in order to assist its considerations, consistent with the process for the EFI Bill. These amendments proposed significant changes to the scope and operation of the Scheme, most of which went to addressing concerns raised during the inquiry. The Committee considered this proactive measure useful.
2.30
Following receipt of the Attorney-General’s proposed amendments, the Committee invited further submissions and held additional hearings. Chapter 9 outlines the proposed amendments.
2.31
While acknowledging the need for increased transparency, the Committee has sought to identify areas where it considers appropriate amendments are required to improve the integrity and proportionality of the proposed measures, the clarity and effectiveness of their application and operation, and to ensure adequate safeguards are provided.
2.32
In the final chapter, the Committee presents its recommendations and commentary on issues raised. The Committee wholly supports the intention of the Bill to shine light on covert influence and influence which is not readily discernible. The Committee acknowledges the current threat environment and the need to be aware of influences that may act to undermine Australia.

Report structure

2.33
This report consists of ten chapters:
The introductory two chapters set out the context and conduct of the inquiry, and discuss some process concerns. The remainder of this chapter provides an overview of the main elements of the Bill, its interaction with other bills before the Parliament, and discusses issues raised regarding international human rights considerations and constitutional validity;
Chapter 3 discusses the broad scope of actors and activities that would be captured by the Bill;
Chapter 4 considers the proposed exemptions in the Bill, and others raised in evidence;
Chapter 5 explores the application of parliamentary privilege to the Bill;
Chapter 6 discusses registrants’ obligations and the operation and administration of the proposed Foreign Influence Transparency Scheme;
Chapter 7 discusses proposed enforcement provisions;
Chapter 8 addresses oversight and review processes of the Scheme;
Chapter 9 presents the Attorney-General’s proposed amendments and evidence provided by stakeholders on those amendments, and
Chapter 10 sets out the Committee’s comments, findings and recommendations.

Outline of the Bill (as introduced by the Prime Minister)

2.34
The Bill will establish the Foreign Influence Transparency Scheme (the Scheme). The Scheme seeks to bring transparency to activities undertaken on behalf of foreign principals, particularly where those activities are intended to influence Australian political and governmental systems and processes.
2.35
The Bill will require registration and ongoing reporting by ‘intermediaries’ who act on behalf of foreign principals. More regular reporting will be required during elections and other federal votes. The Bill contains a range of criminal penalties for failing to register or failing to fulfil a reporting responsibility. More extensive requirements are, appropriately, imposed on former politicians and senior officials, and, in particular, on former Cabinet ministers.
2.36
The Bill proposes that the Scheme be administered by a departmental Secretary,26 who will have a range of powers to request information of persons who may be liable to register, as well as other third parties.
2.37
The Bill comprises six Parts. Following is a summary of the key elements of each Part.

Part 1–Preliminary

2.38
Proposed Part 1 sets out a number of matters relating to the object of the Bill, definitions, commencement, jurisdictional application and the constitutional heads of power that underpin the Bill.
2.39
Part 1 also sets out a number of definitions for key terms and concepts that determine the proposed scope and application of the Bill.27 These matters are central to whether or not a person or entity will be required to register under the Scheme.
2.40
The definitions address, amongst other things, who a ‘foreign principal’ is, what kinds of activities are ‘registrable activities,’ when an activity is undertaken ‘on behalf of’ a foreign principal, and when an activity is taken to be undertaken ‘for the purpose of political or governmental influence.’
2.41
A ‘foreign principal’ is defined to mean a foreign government, a foreign public enterprise, a foreign political organisation, a foreign business, or an individual who is neither an Australian citizen nor a permanent Australian resident.28 If certain activities are undertaken on behalf of a foreign principal, registration may be required under the Bill.
2.42
Registrable activities’ and ‘registrable arrangements’ are activities, or arrangements to undertake activities, which will require a person or entity to register under the Scheme.29 The kinds of activities which are captured by the Scheme are set out in Part 2 of the Bill, and considered in further detail in Chapter 3.
2.43
The phrase ‘on behalf of’ is used to limit registrable activities to those that are undertaken ‘on behalf of’ a foreign principal. The phrase is defined to mean activities undertaken under an arrangement with, in the service of, on the order of, at the request of, under the control or direction of, with funding or supervision by, or in collaboration with, a foreign principal.30
2.44
In most circumstances, an activity will only be a registrable activity if it is done for the ‘purpose of political or governmental influence’. An activity is done for the purpose of political or governmental influence if a purpose of the activity is to influence a process in relation to:
a federal election or designated vote;
a federal government decision;
parliamentary proceedings;
a registered political party;
an independent member of the Parliament; or
a candidate in a federal election.31
2.45
Proposed section 12 includes a non-exhaustive list of examples of what might constitute an activity for the purpose of political or governmental influence with respect to the above listed processes.
2.46
The ‘purpose’ of an activity is determined by reference to the intention of the foreign principal, the intention or belief of the person undertaking the activity, or all of the surrounding circumstances.32
2.47
The Bill proposes the Scheme will have extraterritorial application, such that it will cover situations where a person makes an arrangement with a foreign principal outside of Australia,33 as well as the activities of former elected representatives and former senior officials wherever they occur in the world.34
2.48
The Bill will commence upon Proclamation or within 12 months of receiving Royal Assent, whichever occurs earlier.35

Part 2–Registration: liability, process and exemptions

2.49
Proposed Part 2 sets out when a person or entity will be liable to register and cease to be liable to register under the Scheme.
2.50
A person or entity will be liable to register from the moment that:
they engage in registrable activities on behalf of a foreign principal, or
enter into a registrable arrangement with a foreign principal,
and, no exemption applies in relation to the activity.36
2.51
The Bill establishes that a liable person or entity must register under the Scheme within 14 days of engaging in the registrable activity or entering into the arrangement.37 Registration will be accompanied by a fee, which will be specified in regulations.38 These regulations, or the amount of the proposed charge, have not been made available to the Committee in its consideration of the Bill.
2.52
An application for registration will be required to be in writing,39 though the Bill does not specify the information that will be required to be provided to the Secretary to complete registration. This is proposed to be provided in the rules,40 and is further discussed in Chapter 5.
2.53
A person or entity will cease to be liable to register if they no longer engage in registrable activities on behalf of a foreign principal or no longer have a registrable arrangement with a foreign principal, and they have given notice to the Secretary advising of the cessation of registration.41
2.54
Proposed Division 3 of Part 2 sets out four categories of ‘registrable activities’. They are:
lobbying a member of Parliament or staffer (described as ‘parliamentary lobbying’) within Australia on behalf of a foreign government,42
engaging in certain activities within Australia for the purpose of influencing a political or governmental system or process.43 These activities are:
parliamentary lobbying on behalf of a foreign principal other than a foreign government;
general political lobbying44 on behalf of any kind of foreign principal;
communications activity45 on behalf of any kind of foreign principal, and
donor activity46 on behalf of a foreign government, foreign public enterprise or foreign political organisation;
a former Cabinet Minister who is employed by, or acts in any capacity for, any foreign principal (other than a foreign individual),47 and
a former Minister, member of Parliament or senior Commonwealth official who is employed by, or acts in any capacity for, any foreign principal (other than a foreign individual), where they contribute skills, knowledge, experience or contacts which have been gained through their former role.48
2.55
Chapter 3 addresses the scope of these registrable activities in further detail.
2.56
Division 4 of Part 2 proposes a number of exemptions which will mean that a person or entity who would otherwise be liable to register for an activity, will not need to register. A number of exemptions are ‘blanket’ in nature, and will apply in all circumstances irrespective of who the person or entity undertaking the activities is, or who the foreign principal is. Other exemptions are more limited in their proposed application, depending upon the purpose for which the activities are undertaken, who the person or entity undertaking the activities is, or who the foreign principal is.
2.57
In broad terms, the exemptions are:
activities done for the sole purpose of, or which solely relate to, the provision of humanitarian aid or assistance;49
activities done for the sole purpose of, or which solely relate to, the provision of legal advice or representation;50
activities of diplomats, consular and other officials;51
activities done for the sole purpose of, or which solely relate to, the religious pursuits of a foreign government;52
activities done for the sole purpose of news, current affairs or editorial content;53
certain business and commercial activities, including:
the negotiation or conclusion of contracts for the provision of goods or services (where they do not relate to national security, defence or public infrastructure),54 and
the activities of employees within Australia of foreign businesses,55 and
any other circumstances prescribed by the rules.56
2.58
Chapter 4 addresses these proposed exemptions, and their application to certain foreign principals in further detail.

Part 3–Responsibilities of registrants

2.59
Proposed Part 3 sets out the responsibilities and obligations that will be placed upon persons or entities that are registered under the scheme, known as ‘registrants’.
2.60
Registrants will be required to report on various matters whilst registered, with greater regularity during elections and other voting periods. The reporting and other responsibilities are to:
renew registration on an annual basis;57
report material changes in circumstances within 14 days;58
report when donor activity on behalf of a foreign principal reaches $13,500 or a multiple thereof (this must be reported within 14 days,59 or within seven days if during an election or other voting period);60
update registration information within 14 days of the commencement of an election or other voting period;61
report on registrable activities within seven days if undertaken during an election or other voting period;62
make disclosures in any communications materials distributed on behalf of a foreign principal,63 and
maintain records for the duration of registration, and for a period of five years after the cessation of registration.64
2.61
Registrants must report to the Secretary on the above-mentioned matters within the timeframes specified. However, there is no requirement in the Bill that the information is then made available to the public, or published within a certain period of time. These obligations are discussed further in Chapter 6.
2.62
A number of strict liability offences will apply for failing to fulfil a reporting responsibility. Offences are dealt with in Part 5 of the Bill, and are considered in further detail in Chapter 7 of this report.

Part 4–Obtaining and handling information

2.63
Proposed Part 4 outlines how information provided under the Scheme will be obtained, stored and disclosed.
2.64
The Bill provides that the Secretary will keep a register that will hold a wide range of information about persons and entities, including third parties that are not registered under the Scheme.65 For example, this will include the name of the person and the foreign principal, the registration application and annual renewal documents, a record of any communications between the registrant and the Secretary, and any documents provided by the person as requested by the Secretary.
2.65
Not all information contained on this register will be publicly available. The Bill provides that the Secretary must publish on a website the following:
the name of the person and the foreign principal;
a description of the kind of registrable activities the person undertakes on behalf of the foreign principal, and
any other information prescribed by rules.66
2.66
The Bill proposes to grant the Secretary the discretion not to publish certain information if the Secretary is satisfied that the information is commercially sensitive, affects national security or is related to matters prescribed by rules.67
2.67
The Bill proposes powers for the Secretary to compel information or documents from persons or entities registered under the Scheme, as well as any third parties. Information could be compelled for the purpose of determining whether a person or entity should be registered,68 or if the information is relevant to the operation of the Scheme.69
2.68
It will be a criminal offence for a person to fail to comply with a request, or to provide false or misleading information to the Secretary in response to a request.70 The Bill clarifies that a person will not be excused from providing information or documents on the basis that it may incriminate the person or expose them to penalty.71 However, the information or document will not be admissible in criminal or civil proceedings (except in relation to providing false or misleading information).
2.69
The Bill authorises the Secretary to share Scheme-information with a wide range of entities and for a range of purposes, including law enforcement and security agencies.72 Additional entities and purposes for which information can be shared can be prescribed in rules following consultation with the Information Commissioner.73
2.70
The Secretary may delegate all or any functions under the Bill down to the level of acting Executive Level 2.74
2.71
The Secretary’s role and proposed powers are further discussed in Chapter 6.

Part 5–Enforcement

2.72
Proposed Part 5 of the Bill will create a number of criminal offences. The new offences are outlined in Table 2.1.
Table 2.1:  Proposed offences
Proposed offence
Proposed penalty
Intentional omission to apply or renew and registrable activity undertaken (proposed subsection 57(1))
Seven years imprisonment
Section 31 notice given knowing arrangement still exists and undertaking registrable activity (proposed subsection 57(2))
Seven years imprisonment
Reckless omission to apply or renew and registrable activity undertaken (proposed subsection 57(3))
Five years imprisonment
Intentional or reckless omission to apply or renew whether or not registrable activity undertaken (proposed subsection 57(4))
12 months imprisonment
Section 31 notice given knowing arrangement still exists whether or not registrable activity undertaken (proposed subsection 57(5))
12 months imprisonment
Failure to fulfil reporting responsibility (proposed subsection 58(1))
60 penalty units
Failure to fulfil responsibility to disclose in communications activity (proposed subsection 58(2))
60 penalty units
Failure to keep records (proposed subsection 58(3))
60 penalty units
Failure to comply with notice requiring information (proposed section 59)
60 penalty units
False or misleading information or documents (proposed subsection 60(1))
Six months imprisonment
Destruction of records (proposed subsection 61(1))
Five years imprisonment
Intentionally not registering and engaging in activities on behalf of a foreign principal (proposed subsection 57(1))
Three years imprisonment
2.73
All offences for failing to apply for or renew registration require knowledge of the obligation to register, and either intention or recklessness as to failing to register or renew registration.
2.74
There are no civil penalties or enforcement mechanisms contained in the Bill.
2.75
The enforcement provisions are further discussed in Chapter 7.

Part 6–Miscellaneous

2.76
Proposed Part 6 covers a range of matters, including that:
an annual report must be prepared and presented to the Parliament on the operation of the Scheme,75 and
the Scheme must be formally reviewed within five years of its commencement.76
2.77
Chapter 8 discusses the oversight and review of the proposed Scheme.

Amendments proposed by the Attorney-General

2.78
The Committee was requested to inquire into and report on the Bill as introduced to the House. However the Committee notes that, six months into the inquiry, the Attorney-General proposed a set of amendments to the Bill.
2.79
Chapter 9 outlines the Attorney-General’s proposed amendments to the Bill and evidence in relation to those proposed amendments.

Intersection with other bills

2.80
The Bill was introduced by the Prime Minister into the House of Representatives as a package of legislative reforms alongside the National Security Legislation Amendment (Espionage and Foreign Interference) Bill 2017 (the Espionage and Foreign Interference Bill), and the Foreign Influence Transparency Scheme (Charges Imposition) Bill 2017.
2.81
On the same day that the Prime Minister introduced these Bills, the Minister for Finance introduced the Electoral Legislation Amendment (Electoral Funding and Disclosure Reform) Bill 2017 (the EFDR Bill) into the Senate. That Bill was referred to the Joint Standing Committee on Electoral Matters for inquiry and report by 28 March 2018.
2.82
The Bills were collectively described by the Prime Minister as having ‘interlocking components’ to counter foreign interference.77
2.83
The Espionage and Foreign Interference Bill was also referred to this Committee for review. Schedule 5 of the Espionage and Foreign Interference Bill sets out transitional arrangements such that if a registrable arrangement exists prior to the commencement of the Scheme, a person will not be required to register under the Scheme on the date of commencement. In such circumstances, a person will have six months from the date of commencement to register.
2.84
Schedule 5 of the Espionage and Foreign Interference Bill also proposes to incorporate a number of concepts and definitions into this Bill that will be created by the EFDR Bill if passed. This includes expanding the list of processes that are deemed to be for the ‘purpose of political or governmental influence’ under proposed section 12 of the Bill to include processes in relation to ‘political campaigners’.
2.85
A definition of ‘political campaigner’ will be inserted into the Commonwealth Electoral Act 1918 by the EFDR Bill. The proposed reforms made by the Espionage and Foreign Interference Bill mean that anyone who lobbies a ‘political campaigner’ or undertakes activities to influence processes in relation to a political campaigner, may be required to register under the Scheme.
2.86
The Espionage and Foreign Interference Bill will also amend the Bill to omit the current defined ‘electoral donations threshold’ ($13,500) to the threshold within the meaning of the Commonwealth Electoral Act 1918. That threshold will also be $13,500, however it will be subject to indexation. If the disclosure threshold under the Commonwealth Electoral Act 1918 changes, the electoral donations threshold under the Scheme will change to mirror that threshold.
2.87
If the Parliament does not pass these sections of the EFDR Bill, the present Bill will not be amended. The effect of this will be that:
political campaigner will not be referred to in the ‘activities for the purpose of political or governmental influence’; and
the threshold for ‘donor activity’ will remain at $13,500 (and will not be subject to indexation).
2.88
The Committee released its report on the Espionage and Foreign Interference Bill on 7 June 2018, and recommended that the Bill, with amendments, be passed.

International human rights issues

2.89
The Explanatory Memorandum to the Bill includes a Statement of Compatibility with Human Rights (the Statement).
2.90
The Statement asserts that the Bill is compatible with the human rights and freedoms recognised or declared in the international instruments which are listed at section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.
2.91
The following human rights were described as being promoted by the Bill:
the right to opinion and freedom of expression in Article 19 of the International Covenant on Civil and Political Rights (ICCPR);
the right to freedom of association in Article 22 of the ICCPR ; and
the right to take part in public affairs and the right to vote in Article 25 of the ICCPR.
2.92
The rights were described as being promoted by the Bill because its provisions encourage and promote a ‘political system that is transparent,’ and enable the exercise of rights and duties without interference.78
2.93
The following human rights were described as being limited by the Bill:
the right to liberty of person and freedom from arbitrary detention in Article 9(1) of the ICCPR;
the right to be presumed innocent in Article 14(2) of the ICCPR;
the right to privacy in Article 17 of the ICCPR;
the right to freedom of expression in Article 19 of the ICCPR;
the right to freedom of association in Article 22 of the ICCPR, and
the right to take part in the conduct of public affairs and the right to be elected in Article 25 of the ICCPR.
2.94
To the extent that any of the abovementioned rights were described as being limited by the Bill, the Statement went on to note that each are nonetheless consistent with Australia’s international human rights obligations. The Statement explained that the limitations are ‘reasonable, necessary and proportionate for the pursuit of a legitimate objective’79 being transparency for the Australian government and public about foreign influence over political and governmental systems and processes.
2.95
The Parliamentary Joint Committee on Human Rights (the PJCHR) released its report on the Bill on 6 February 2018. The PJCHR concluded that although the objective of the Bill may be a legitimate objective, the limitations placed on human rights may not be proportionate, nor sufficiently circumscribed, to ensure that it is only as extensive as is strictly necessary to achieve that legitimate objective.80
2.96
In reaching that conclusion, the PJCHR expressed concern regarding the breadth of definitions of a ‘foreign principal’, activities ‘on behalf of’ and ‘for the purpose of political or governmental influence’. The PJCHR stated that the breadth of definitions created an ‘uncertain and potentially very broad range of conduct falling within the scope of the scheme’.81 As a result, the Bill ‘may unduly obstruct the exercise of the freedom of expression, association and right to take part in public affairs’.82
2.97
Further, the PJCHR examined the Bill’s proposed exemptions from the Scheme, finding ‘it is not clear, however, whether these safeguards in this bill are, of themselves, sufficient’.83
2.98
In a submission to this Committee’s inquiry, the Australian Lawyers for Human Rights similarly advocated that the Bill provides ‘neither a proportionate, necessary or reasonable response to the perceived harms of foreign interference in Australia’s political and governmental processes and negatively impacts … human rights’.84

Constitutional validity

2.99
The Bill, in whole, relies upon:
the external affairs power;
powers incidental to the exercise of a power vested in the Commonwealth, and
any implied legislative powers of the Commonwealth.85
2.100
A number of other constitutional powers are referred to as ‘additional and severable heads of legislative power’ which support the Bill. 86 That is, if a court were to find that a legislative head of power does not support the Bill or an aspect of the Bill, then that can be ‘severed’ and ensure that the rest of the Bill is valid to the extent that other legislative heads of power support the Bill.87
2.101
Some submitters raised concerns regarding the constitutional validity of the Bill, in particular the impact on the implied freedom of political communication.88 For example, Australian Lawyers for Human Rights expressed strong doubt as to the constitutional basis for the Bill, describing the legislative package as ‘an onslaught … on the implied constitutional right of political communication’,89 fearing that it will ‘have a severely chilling effect upon free speech, and particularly constitutionally-protected free political speech’.90
2.102
The Law Council Australia also discussed the constitutionally implied right to freedom of political communication, noting that it is ‘not amenable to alteration by legislation’. However, the Council advised that:
In the context of laws addressing national security and public order, it is accepted that there may be legitimate countervailing interests which require the imposition of reasonably and proportionate limitations upon freedom of expression.91
2.103
The Law Council was of the view that the strict application of the proposed penalties, together with the broad scope of actors and activities captured under the Scheme, means that the Bill has the ‘very real likelihood of muting public debate and dialogue, an outcome that is unsatisfactory and beyond the objects of the Bill’.92
2.104
Mr Bret Walker SC also noted that the Bill raises significant constitutional questions for the implied right to political communication:
My feeling is that the core of the legislative project is not necessarily outside permissible regulation of political communication. That’s what might be called the Platonic ideal behind the legislation; it is not intended to say the drafting’s got it right. It’s not yet clear what the courts’ approach will or ought to be concerning the inhibition that might be supposed to be created which would affect the content or frequency or nature of political communication if you knew that a note had to be taken and kept for five years and made available to the executive.93
2.105
The Department submitted that the Scheme will ‘help protect the freedom of political communication’ by encouraging and promoting a political system that is transparent.94
2.106
In answers to questions on notice, the Department stated:
The department is confident that the Scheme does not infringe or unnecessarily burden the implied freedom of political communication. The registration and transparency requirements in the Scheme do not prevent any person from engaging in political communication in Australia. Rather the Scheme merely requires the ultimate source of such communications to be available through registration under the Scheme. The Scheme’s objective – to inform the Australian Government and the public about the ultimate source and interests behind political communications being made to them – is appropriate and adapted to serve a legitimate end of enhancing transparency of foreign influence in Australian political and governmental processes.95
2.107
After consideration of the amendments proposed by the Attorney-General, Professor Anne Twomey noted that their effect is to ‘focus the application of the Bill more tightly on its legitimate end’.96 She concluded that:
This change in focus will significantly bolster the constitutional validity of the proposed law, as it will be easier to argue that its provisions are appropriate and adapted to serve the legitimate end.97

United States’ Foreign Agents Registration Act 1938

2.108
As noted in Chapter 1, in May 2017 the Prime Minister requested that the AttorneyGeneral conduct a review of Australia’s espionage, foreign interference, treason and related laws. The Prime Minister’s terms of reference included that the review consider the merit of creating a legislative regime based on the United States’ Foreign Agents Registration Act 1938 (FARA).

Overview of the Foreign Agents Registration Act 1938

2.109
Enacted in 1938 to promote transparency with respect to foreign influence in the political process, FARA requires ‘agents of foreign principals’ undertaking certain activities on behalf of foreign interests to register with and file regular reports with the United States’ Department of Justice.
2.110
FARA applies to individuals and organisations who:
act under the order, request, control or direction of, or whose activities are directly or indirectly supervised, directed, controlled, financed or subsidised in whole or substantial part by a foreign principal (including a foreign country, person or organisation outside the United States),98 and
on behalf of the foreign principal within the United States, engage in political activities; act as a public relations counsel, publicity agent, information service employee or political consultant; solicit, collect, disburse or dispense contributions, loans, money or other things of value; or make representations to United States government agencies or officials.99
2.111
FARA contains several exemptions, including:
diplomats, consular officers, officials of foreign governments and staff members of diplomatic or consular officers;100
persons solely engaged in private and non-political activities in furtherance of the bona fide trade or commerce of a foreign principal, activities not predominantly serving a foreign interest, or activities providing purely humanitarian assistance;101
persons engaging in bona fide religious, scholastic, academic, artistic or scientific pursuits or fine arts;102
persons whose foreign principal is a government of a foreign country, and the President has deemed the defence of that foreign country as vital to the defence of the United States;103
persons engaged as lawyers for a foreign principal provided that the purpose of legal representation does not include attempts to influence or persuade agency personnel or officials other than in the course of judicial, criminal or civil law enforcement enquiries, investigations or proceedings,104 and
persons engaged in lobbying activities and who have registered under the United States’ Lobbying Disclosure Act 1995 (LDA).105
2.112
FARA also requires agents of foreign principals to file copies of informational materials that they distribute for a foreign principal within 48 hours of transmittal,106 and to maintain records of their activities on behalf of their principal. Supplementary statements are required to be lodged every six months.
2.113
Failure to comply with FARA may subject agents to criminal and civil penalties.
2.114
Although FARA has not been litigated extensively, American courts have recognised a compelling governmental interest in requiring agents of foreign principals to register and disclose foreign influence in the domestic political process, resulting in a number of constitutional challenges being rejected over the decades since FARA’s initial enactment.107

Development of the current Bill

2.115
In developing the Bill, the Department advised that it closely consulted its counterparts in the United States.108 Specifically, the Department advised that the Bill has sought to avoid what it has identified as the challenges and limitations of FARA in meeting its objective. The Department identified the following:
FARA exemptions are ‘broad’, and
persons engaged in lobbying activities who are registered under the LDA are exempt from registration under FARA; LDA has fewer regulatory requirements and requires less information to be disclosed;109
as a result, public awareness and understanding of registration requirements remain a challenge;110
FARA does not provide a coercive power to compel the production of information, and there are ‘few tools available’ to officials to enforce compliance;111
registrants do not regularly provide timely and full submissions to the Department of Justice,112 and
registration and renewal fees have been criticised for being too high and for hindering the transparency objective.113
2.116
In its submission, the Department provided a comparative table that seeks to contrast the liability and obligations between FARA and the Scheme as proposed in the Bill (that is, without reference to the Attorney-General’s proposed amendments). For reference, it is included in Appendix C to this report.
2.117
Throughout the Committee’s review, the Department sought to clarify that the Bill would apply to a more narrow set of conduct. For example, at a public hearing, the Department noted that the scope of conduct is limited by the purpose of the activities being relevant to the registration requirement—that is, political or governmental influence. The Department advised that FARA captures any representation to the United States’ Government, which in its view, explained the need for broader exemptions.114
2.118
Evidence provided by the Department and other submitters have compared the Bill with FARA, and the following chapters summarised this comparative evidence.

  • 1
    Ms Anna Harmer, First Assistant Secretary, Security and Criminal Law Division, AttorneyGeneral’s Department, Committee Hansard, Canberra, 31 January 2018, p. 19.
  • 2
    Mr Duncan Lewis, DirectorGeneral of Security, Australian Security Intelligence Organisation, Committee Hansard, Melbourne, 16 March 2018, p. 48.
  • 3
    Ms Tara Inverarity, Assistant Secretary, AttorneyGeneral’s Department, Committee Hansard, Melbourne, 16 March 2018, p. 49.
  • 4
    Ms Tara Inverarity, Assistant Secretary, AttorneyGeneral’s Department, Committee Hansard, Melbourne, 16 March 2018, p. 54.
  • 5
    Explanatory Memorandum, p. 18, para 91.
  • 6
    Explanatory Memorandum, p. 2, paras 2-4.
  • 7
    Ms Anna Harmer, First Assistant Secretary, Security and Criminal Law Division, AttorneyGeneral’s Department, Committee Hansard, Canberra, 31 January 2018, p. 16.
  • 8
    Ms Anna Harmer, First Assistant Secretary, Security and Criminal Law Division, AttorneyGeneral’s Department, Committee Hansard, Canberra, 31 January 2018, p. 16.
  • 9
    Attorney-General’s Department, Submission 5, p. 3.
  • 10
    Explanatory Memorandum, pp. 8-9, para 24.
  • 11
    Australian Financial Markets Association, Submission 3, p. 1; Law Council of Australia, Submission 4, p. 5; Group of Eight Australia, Submission 11, p. 1; Australian Catholic Bishops Conference, Submission 12, p. 1; Peter Jennings, Submission 14, p. 1; Financial Services Council, Submission 16, p. 1; Australian Bankers’ Association, Financial Services Council, Australian Private Equity and Venture Capital Association, Insurance Council of Australia, Submission 18, p. 1; Property Council of Australia, Submission 21, p. 1; Australian Industry Group, Submission 32, p. 1; Australian Friends of the Hebrew University, Jerusalem Limited and Technion Australia, Submission 38, p. 1; World Vision Australia, Submission 45, p. 2; Australian Institute of International Affairs, Submission 48, p. 1; Justice Connect, Submission 50, p. 2; Uniting Care Australia, Submission 51, p. 1; Australian Council for International Development, Submission 55, p. 1; Oxfam Australia, Submission 57, p. 3; The Smith Family, Submission 60, p. 4.
  • 12
    Mr Peter Vickery, Deputy Director-General, Counter-Espionage and Interference and Capabilities, Australian Security Intelligence Organisation, Committee Hansard, Canberra, 31 January 2018, p. 20.
  • 13
    Mr Peter Jennings, private capacity, Committee Hansard, Canberra, 30 January 2018, pp. 6365.
  • 14
    Ms Linda Jakobson, Submission 39, p. 3.
  • 15
    For example, Mr Tony Kevin, Submission 1, p. 15.
  • 16
    For example, Mr Ernst Willheim, Submission 2, p. 2.
  • 17
    Mr Ernst Willheim, Submission 2, p. 2.
  • 18
    Ernst Willheim, Submission 2, p. 2; Australian Lawyers for Human Rights, Submission 7, p. 1; Universities Australia, Submission 9, p. 2; Group of Eight Australia, Submission 11, p. 1; The Federation of Chinese Associations (Victoria), Submission 53, p. 1; Oxfam Australia, Submission 57, p. 3.
  • 19
    Australian Financial Markets Association, Submission 3, pp. 2-3; Australian Industry Group, Submission 32, p. 1; Australian Conservation Foundation, Submission 40, p. 1.
  • 20
    Universities Australia, Submission 9, p. 2; Group of Eight Australia, Submission 11, p. 1; Joint Media Organisations, Submission 19.1, p. 1; Australian Industry Group, Submission 32, p. 1; Oxfam Australia, Submission 57, p. 3; GetUp!, Submission 63, p. 5.
  • 21
    Ms Anna Harmer, First Assistant Secretary, Security and Criminal Law Division, AttorneyGeneral’s Department, Committee Hansard, Canberra, 31 January 2018, p. 42; see also Ms Anna Harmer, First Assistant Secretary, Security and Criminal Law Division, AttorneyGeneral’s Department, Committee Hansard, Melbourne, 16 March 2018, p. 42.
  • 22
    Ms Anna Harmer, First Assistant Secretary, Security and Criminal Law Division, AttorneyGeneral’s Department, Committee Hansard, Melbourne, 16 March 2018, p. 36.
  • 23
    Ms Anna Harmer, First Assistant Secretary, Security and Criminal Law Division, AttorneyGeneral’s Department, Committee Hansard, Melbourne, 16 March 2018, p. 42.
  • 24
    Ms Anna Harmer, First Assistant Secretary, Security and Criminal Law Division, AttorneyGeneral’s Department, Committee Hansard, Melbourne, 16 March 2018, p. 41.
  • 25
    Ms Anna Harmer, First Assistant Secretary, Security and Criminal Law Division, AttorneyGeneral’s Department, Committee Hansard, Melbourne, 16 March 2018, pp. 46-47.
  • 26
    Proposed section 42.
  • 27
    Proposed section 10.
  • 28
    Proposed section 10.
  • 29
    Proposed section 10.
  • 30
    Proposed section 11.
  • 31
    Proposed section 12.
  • 32
    Proposed section 14.
  • 33
    Proposed section 6; Explanatory Memorandum, p. 19, para 96.
  • 34
    Proposed section 6; Explanatory Memorandum, p. 19, para 97.
  • 35
    Proposed section 2.
  • 36
    Proposed section 18; Proposed Division 4.
  • 37
    Proposed section 16.
  • 38
    Proposed section 63.
  • 39
    Proposed section 16.
  • 40
    Proposed section 71.
  • 41
    Proposed section 19.
  • 42
    Proposed section 20.
    ‘Parliamentary lobbying’ is defined in proposed section 10 of the Bill to mean lobbying any one or more of the following persons:
    (a) a member of the Parliament, and
    (b) a person employed under section 13 or 20 of the Members of Parliament (Staff) Act 1984.
  • 43
    Proposed section 21.
    Proposed section 12 of the Bill provides that ‘an activity is for the purpose of political or governmental influence if a purpose of the activity (whether or not there are other purposes) is to influence, directly or indirectly, any aspect (including the outcome) of any one or more of the following:
    (a) a process in relation to a federal election or a designated vote;
    (b) a process in relation to a federal government decision;
    (c) proceedings of a House of Parliament;
    (d) a process in relation to a registered political party;
    (e) a process in relation to a member of the Parliament who is not a member of a registered political party, and
    (f) a process in relation to a candidate in a federal election who is not endorsed by a registered political party.
  • 44
    Proposed section 10 defines ‘general political lobbying’ to mean lobbying any one or more of the following:
    (a) a Commonwealth public official;
    (b) a Department, agency or authority of the Commonwealth;
    (c) a registered political party, and
    (d) a candidate in a federal election;
    other than lobbying that is ‘parliamentary lobbying’.
  • 45
    Proposed section 13 of the Bill provides that a person ‘undertakes communications activity if the person communicates or distributes information or material.’ ‘Information or material’ is defined in proposed subsection 13(2) to include information or materials in any form, including oral, visual, graphic, written, electronic, digital and pictorial forms.
  • 46
    Proposed section 10 of the Bill provides that a person undertakes donor activity if:
    (a) the person disburses money or things of value; and
    (b) neither the person nor a recipient of the disbursement is required to disclose it under Division 4, 5 or 5A of Part XX of the Commonwealth Electoral Act 1918.
  • 47
    Proposed section 22.
    Proposed section 10 defines ‘recent Cabinet Minister’ to mean a person who was a Cabinet Minister within the last three years, and who is not currently a Minister, member of Parliament or senior Commonwealth official.
  • 48
    Proposed section 23.
    Proposed section 10 defines ‘recent member of Parliament’ and ‘recent Minister’ to mean a person who held one of those positions within the last the three years, but who is not presently a Minister, member of Parliament or senior Commonwealth official; and a ‘recent holder of a senior Commonwealth position’ to mean a person who occupied that position within the last 18 months, but who is not presently a Minister or member of Parliament.
  • 49
    Proposed section 24.
  • 50
    Proposed section 25.
  • 51
    Proposed section 26.
  • 52
    Proposed section 27.
  • 53
    Proposed section 28.
  • 54
    Proposed subsection 29(1).
  • 55
    Proposed subsection 29(2).
  • 56
    Proposed section 30.
  • 57
    Proposed section 39.
  • 58
    Proposed section 34.
  • 59
    Proposed section 35.
  • 60
    Proposed section 37.
  • 61
    Proposed section 36.
  • 62
    Proposed section 37.
  • 63
    Proposed section 38.
  • 64
    Proposed section 40.
  • 65
    Proposed section 42.
  • 66
    Proposed section 43.
  • 67
    Proposed section 43.
  • 68
    Proposed section 45.
  • 69
    Proposed section 46.
  • 70
    Proposed section 59.
  • 71
    Proposed section 47.
  • 72
    Proposed section 53.
  • 73
    Proposed section 53.
  • 74
    Proposed section 67.
  • 75
    Proposed section 69.
  • 76
    Proposed section 70.
  • 77
    The Hon. Malcolm Turnbull MP, Prime Minister, Second Reading Speech, Hansard, 7 December 2017, p. 13145.
  • 78
    Explanatory Memorandum (Statement of Compatibility with Human Rights), pp. 78, paras 1519.
  • 79
    See for example, Explanatory Memorandum (Statement of Compatibility with Human Rights) p. 8, para 20.
  • 80
    Parliamentary Joint Committee on Human Rights, Human Rights Scrutiny Report – Report 1 of 2018, p. 39.
  • 81
    Parliamentary Joint Committee on Human Rights, Human Rights Scrutiny Report – Report 1 of 2018, p. 39.
  • 82
    Parliamentary Joint Committee on Human Rights, Human Rights Scrutiny Report – Report 1 of 2018, p. 41.
  • 83
    Parliamentary Joint Committee on Human Rights, Human Rights Scrutiny Report – Report 1 of 2018, p. 41.
  • 84
    Australian Lawyers for Human Rights, Submission 7, p. 5.
  • 85
    Proposed section 7.
  • 86
    Proposed section 7 lists the following Constitutional heads of power as supporting the Bill – paragraph 51 (xxix) (external affairs); paragraph 51 (xxxix) (matters incidental to execution of a power); paragraph 51(i) (trade and commerce); paragraph 51(v) (communications); 51(xx) (corporations); paragraph 51(xi) (census and statistics); paragraph 51(xix) (aliens); and, any implied legislative powers of the Commonwealth.
  • 87
    Explanatory Memorandum, p. 19, para 98.
  • 88
    Mr Ernst Willheim, Submission 2, pp. 3-4; Australian Lawyers for Human Rights, Submission 7, p. 4; Oxfam Australia, Submission 57, p. 3; Dr Luke Beck, Submission 68, p. 1; Professor Anne Twomey, Submission 82, p. 1.
  • 89
    Australian Lawyers for Human Rights, Submission 7, p. 4.
  • 90
    Australian Lawyers for Human Rights, Submission 7, p. 6.
  • 91
    Law Council of Australia, Submission 4, pp. 9-10.
  • 92
    Law Council of Australia, Submission 4, p. 10; see also Mr Tony Kevin, private capacity, Committee Hansard, Melbourne, 16 March 2018, p. 5.
  • 93
    Mr Bret Walker SC, private capacity, Committee Hansard, Canberra, 16 February 2018, pp. 89.
  • 94
    Attorney-General’s Department, Submission 5, p. 3.
  • 95
    AttorneyGeneral’s Department, Submission 5.1, p. 11.
  • 96
    Professor Anne Twomey, Submission 82.1, p. 1.
  • 97
    Professor Anne Twomey, Submission 82.1, p. 1.
  • 98
    Foreign Agents Registration Act, 22 U.S.C. § 611.
  • 99
    Foreign Agents Registration Act, 22 U.S.C. § 611(c)(1).
  • 100
    Foreign Agents Registration Act, 22 U.S.C. § 613 (a)-(c).
  • 101
    Foreign Agents Registration Act, 22 U.S.C. § 613(d).
  • 102
    Foreign Agents Registration Act, 22 U.S.C. § 613 (e).
  • 103
    Foreign Agents Registration Act, 22 U.S.C. § 613 (f).
  • 104
    Foreign Agents Registration Act, 22 U.S.C. § 613 (g).
  • 105
    Foreign Agents Registration Act, 22 U.S.C. § 613(h) and 2 U.S.C. § 1601.
  • 106
    Foreign Agents Registration Act, 22 U.S.C. § 614(a).
  • 107
    Congressional Research Service, The Foreign Agents Registration Act: A Legal Overview, December 2017, (CRS R45037), <https://fas.org/sgp/crs/misc/R45037.pdf>, last accessed 5 March 2018.
  • 108
    Attorney-General’s Department, Submission 5, p. 6.
  • 109
    Attorney-General’s Department, Submission 5, p. 7.
  • 110
    Attorney-General’s Department, Submission 5, p. 7.
  • 111
    Attorney-General’s Department, Submission 5, p. 7.
  • 112
    Attorney-General’s Department, Submission 5, p. 8.
  • 113
    Attorney-General’s Department, Submission 5, p. 8.
  • 114
    Ms Tara Inverarity, Assistant Secretary, AttorneyGeneral’s Department, Committee Hansard, Melbourne, 16 March 2018, p. 55.

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