This chapter considers the scope of actors and activities that will be subject to the Foreign Influence Transparency Scheme. The evidence and issues presented here do not take account of the amendments proposed by the Attorney-General that were provided to the Committee on 7 June 2018.
The Foreign Influence Transparency Scheme Bill (the Bill) proposes that persons who undertake certain activities on behalf of a foreign principal, for the purpose of political or governmental influence, will be required to register under the Scheme. As noted in previous chapters, the objective of the Bill—to provide transparency of the level and extent of covert foreign influence in Australia—was supported by a large majority of submitters.
Despite the strong support for the purpose of the Bill, a significant number of submitters expressed concerns about the scope of actors and activities captured by the Bill, with many suggesting that the wide range of conduct captured is beyond the objective of the Bill and may actually impede the intended transparency.
The Law Council of Australia noted that the breadth of the Bill may ‘unduly impact those that have no intention to disrupt Australian democracy and sovereignty, while lacking the ability to curb the types of influential behaviour that is of identifiable concern’.
The Law Council went on to question whether the proposed measures represent a proportionate reaction to the issue of foreign interference and influence in Australia. The Council also queried whether the approach is ‘the most effective policy response’.
Others, such as the Australian Catholic Bishops Conference (ACBC), described the Bill’s scope as ‘extraordinary’ and the Australian Financial Markets Association (AFMA) stated that the Bill has the potential to ‘become one of the most wide reaching regimes in the Australian regulatory system’.
As a result of its breadth, some stakeholders concluded that the Bill’s provisions would have national consequences beyond its objective. For example, the Australian Lawyers for Human Rights (ALHR) submitted:
There is no doubt that the Bill will severely chill public policy discussions, given the strict liability nature of the offences, the vague and excessive reach of key terms, and the additional onerous reporting requirements and associated expenses required from individuals or entities which wish to engage in public speech. Despite the Explanatory Memorandum saying that ‘the scheme is not intended to restrict, deter, criminalise or punish otherwise lawful activities or associations’, there is a real danger that the Bill will indeed have that effect.
Responding to some of these concerns, the Department stated that it is,
… not the intention of the Scheme to cast a very wide net to catch a large number of people. … There is value and a deliberate purpose in capturing those people who are acting at the behest of a foreign actor to influence political and government decision-making. … [T]here is no intention to cast negative aspersions or to criminalise or to otherwise take the view that it is wrong for there to be foreign influence; it's simply that there is value in that being disclosed and it being transparent to the community and decision-makers.
Beyond these general concerns, stakeholders identified specific concerns about the language employed in the Bill that would likely capture conduct that is beyond the Bill’s objective of revealing covert influence. These specific concerns can be grouped into to four categories:
the expansive definition of a ‘foreign principal’ as specified in proposed section 10;
the categories of relationships between persons and foreign principals that are described as undertaking activities ‘on behalf of’ a foreign principal, as provided in proposed section 11;
how the purpose of the registrable activity is to be determined as provided in proposed section 14;
the list of registrable activities in proposed Division 3, and
the registrable activities of recent Cabinet Ministers, Ministers, members of Parliament and other holders of senior Commonwealth positions.
Each of these concerns is addressed in the following sections, with comparison (where applicable) to the similar concepts in the United States’ Foreign Agents Registration Act (FARA), as the only other comparable scheme in operation.
Definition of ‘foreign principal’
A ‘foreign principal’ is defined in the Bill as including:
foreign public enterprises;
foreign political organisations;
individuals who are neither Australian citizens nor permanent residents.
There was general support for the inclusion of foreign governments, foreign public enterprises and foreign political organisations. The inclusion however of foreign businesses and individuals who are neither Australian citizens nor permanent residents attracted concern.
The obligations contained within the Bill would be engaged where an individual or organisation undertakes certain activities, or enters an arrangement to undertake certain activities, on behalf of a ‘foreign business’.
Proposed section 10 defines a ‘foreign business’ as a ‘person, (other than an individual) that:
is constituted or organised under a law of a foreign country or part of a foreign country; or
has its principal place of business in a foreign country, and
is not a foreign government, foreign public enterprise or foreign political organisation.
This will capture a wide range of organisations, both for‑profit organisations and not‑for‑profit organisations, the latter which includes trusts, charities, schools, universities and think tanks. This definition is broadly comparable to the FARA, which establishes a foreign business ‘organized under the laws of or having its principal place of business in a foreign country’.
A number of stakeholders expressed concern regarding the expansive breadth of a definition that did not require any close foreign ‘nexus’.
The AFMA recommended that the definition be amended to exclude businesses registered as a foreign company by the Australian Securities and Investment Commission. AFMA advocated that this would ensure that foreign companies that have a regulated Australian business are not treated as a ‘foreign business’.
In a joint submission, Australian Associated Press, Australian Subscription Television and Radio Association (ASTRA), Bauer Media Group, Commercial Radio Australia, Community Broadcasting Association of Australia, Fairfax Media, Free TV Australia, HT&E, Media Entertainment and Arts Alliance, News Corp Australia, and The West Australian (referred to as Joint Media Organisations) recommended that the Scheme only apply to:
foreign businesses and/or individuals operating on behalf of foreign governments.
In separate submissions, Free TV Australia and Network Ten reiterated this recommendation.
At a public hearing, the Joint Media Organisations stated that the impact of such an amendment would ‘certainly enable the bill to be more targeted to achieve what it seeks to respond to’. The Organisation elaborated:
It seems that the law has a very rightful place in attempting to shine a light on people, or get people to register, who are influencing on behalf of a foreign government where there is a common purpose, perhaps to bring to light—'covert' [activity] ... But in fact what the bill does in its current form is it would require registration and continuous obligation by those entities who I think would be classed as having legitimate grounds to influence and engage with government officials and are usually doing it overtly … as opposed to trying to do it through secret and quiet channels. We do not deny that there may well be instances of that latter part occurring. The bill is just drafted very broadly and so captures far more, and I think, in a compliance sense, it would be entirely unwieldy to do. I don't think anyone really wants to have every employee of News Corp Australia, Foxtel, Fox Sports and Channel 10, let alone every other organisation that may well need to register under the way in which the bill's currently drafted.
ALHR also reflected on the breadth of the definition commenting that it would appear to ‘apply whether or not such entities are acting in conjunction with any Australian subsidiary’.
AFMA and the Australian Professional Government Relations Association (APGRA) similarly commented that extending registration obligations to foreign businesses may impact the competitive neutrality of Australia’s open economy. APGRA was of the view that the Bill has ‘the potential [to] … be viewed as protectionist or an example of economic nationalism’.
By contrast, Mr Peter Jennings cautioned against creating an ‘artificial distinction between the actions of foreign Governments and foreign businesses, when in some cases the aims and objectives of these entities are closely interlinked’.
The Attorney‑General’s Department (the Department) responded to the recommendation of the Joint Media Organisations, stating that it would ‘undermine the Scheme’s transparency objective’. It explained that limiting the Scheme as recommended would,
… make it easy for foreign governments who wish to influence a political or governmental process in Australia to funnel that activity through a foreign business or individual, thereby making the activities fall outside the scope of the Scheme.
Individuals who are non-citizens and non-permanent residents
The obligations contained within the Bill would be engaged where an individual or organisation undertakes certain activities, or enters an arrangement to undertake those activities, on behalf of an individual who is neither an Australian citizen nor a permanent Australian resident.
The ACBC stated that the inclusion of an individual who is neither a citizen nor a permanent resident will apply to a wide range of individuals who ‘cannot be identified with precision at any time’. This breadth may well be extended by the Bill’s extraterritorial application in some circumstances to activities done and persons located outside Australia.
In contrast, the FARA definition of a foreign principal appears to include an individual outside the United States unless it is established that he or she is an American citizen and is domiciled in the United States. Further, the FARA scheme does not have extraterritorial effect. It regulates conduct that takes place (or under an arrangement, would take place) within the United States.
The Law Council stated that the inclusion of non-citizens and non‑permanent residents within the definition of foreign principal may have the effect of ‘capturing activity that is well beyond the intent of the measures’. The Council also noted that the Bill will ‘apply to a very wide range of individuals who ‘currently engage in dialogue on Australian domestic policy either directly or through a third‑party entity, including as a client, member or financial supporter’.
This concern was shared by the ACBC and ALHR and the Australian Friends of the Hebrew University, Jerusalem and Technion Australia. In a joint submission, Australian Friends of the Hebrew University, Jerusalem and Technion Australia commented:
It is entirely legitimate in our view for the Australian government to seek to monitor and control any attempts at interference or influence‑peddling in Australian politics by foreign governments or their proxies through Australian intermediaries. However, care needs to be taken to ensure that in the process Australian citizens are not penalised, simply by virtue of having overseas connections, for expressing their views in support of one side or another in any international conflict.
Over 28 per cent of Australia’s current population was born overseas. Nearly half (49 per cent) of Australians are either born overseas (first generation Australian) or have one or both parents born overseas (second generation Australian). Reflecting upon this diversity, both the Federation of Ethnic Communities’ Councils of Australia (FECCA) and the Ethnic Communities’ Council of Victoria expressed concern that the inclusion of foreign individuals would likely have a disproportionate effect on culturally and linguistically diverse communities. FECCA noted that under the Bill, ‘advocating for domestic violence sufferers on temporary visas would likely require FECCA to register’.
In a different setting, the Australian Academy of Science noted that the inclusion of foreign individuals within the definition of a foreign principal would ‘include researchers working in Australia who are not Australian citizens, such as visiting academics or overseas students at universities, as well as non‑Australian members of international research collaborations and consortia’.
The Department advised the Committee however that it is ‘not the intention of the scheme to cover representation on behalf of an individual’.
The Department noted that ‘it may be desirable for an exemption for individual representations to be included in the Bill’, and that it ‘considers inquiries and advocacy in relation to the welfare of individuals would be appropriate case for an exemption by regulation’.
Undertaking activity ‘on behalf of’ a foreign principal
The definition of undertaking an activity ‘on behalf of’ a foreign principal extends the scope of the proposed Scheme to a wide range of relationships that might exist between a person and a foreign principal.
A person will undertake an activity ‘on behalf of’ a foreign principal if the person undertakes the activity:
under an arrangement with the foreign principal; or
in the service of the foreign principal; or
on the order or at the request of the foreign principal; or
under the control or direction of the foreign principal; or
with funding or supervision by the foreign principal, or
in collaboration with the foreign principal.
An activity may still be considered to be undertaken ‘on behalf of’ a foreign principal where the funding, supervision or direction from foreign principal is ‘not the only impetus for the person undertaking the activity’. The Explanatory Memorandum provides the following example:
A person may receive money from both a foreign principal and a domestic actor to engage in parliamentary lobbying activities for the purpose of political or governmental influence. The fact that the person receives funding from a domestic actor does not negate the fact that the person is acting on behalf of the foreign principal when they engage in parliamentary lobbying activities.
The FARA scheme is limited to relationships where the person is in some way directed by the foreign principal to undertake those activities, and as such, captures relationships with a higher degree of materiality than that proposed in the Bill. The FARA establishes that an agent of a foreign principal means any person who:
acts as an agent, representative, employee, or servant of a foreign principal, or
acts in any other capacity at the order, request, or under the direction or control, of a foreign principal or of a person any of whose activities are directly or indirectly supervised, directed, controlled, financed, or subsidized in whole or in major part by a foreign principal.
Stakeholders expressed concern that the Bill as drafted captures a wide breadth of relationships which would not usually be considered to be within the commonly understood meaning of ‘on behalf of’.
Many argued that the approach taken ‘goes beyond the usual meaning of the phrase’, and that it extends beyond ‘normal agency relationships’. For example, ALHR submitted that the term ‘on behalf of’ would ‘normally be understood to mean that one entity acts as agent for the other’.
The Human Rights Council of Australia (HRCA) noted that the ‘ordinary English phrase “on behalf of” expresses a degree of control in the nature of a legal arrangement such as “principal and agent” or “employer and employee”‘. With the breadth of meaning given to ‘on behalf of’, HRCA noted that its arrangements with international human rights organisations and the United Nations may fall within the definition which include:
a contractual arrangement to engage in human rights research;
a funding arrangement to engage in human rights research (including without a written contract);
a joint international committee formed between various NGOs [non‑government organisations] and the HRCA to pursue the protection of human rights in Australia and various other countries, and
a collaborative arrangement without funding.
Addressing these concerns, the Law Council recommended amendments that would narrow what would constitute undertaking an activity ‘on behalf of’ a foreign principal. The amendments should ensure that ‘arrangements or connections with foreign principals maintain a degree of materiality before attracting the need for registration under the scheme’.
The Council proposed that a ‘degree of materiality’ might be achieved by adopting a more narrow approach. Drawing upon the FARA approach, the Council recommended that proposed section 11 be amended to only cover activities that are:
undertaken as an agent, representative, or employee of a foreign principal, or in any other capacity at the order, request, or under the direction or control of, a foreign principal, or
directly or indirectly supervised, directed, controlled, financed, or subsidised in whole or in major part by a foreign principal.
This would introduce the element of direction or agency to the term ‘on behalf of’, which submitters considered was lacking from the Bill as drafted. This recommendation was supported by Justice Connect, which stated that such an amendment ‘would considerably limit the scope of the proposed scheme and provide adequate and necessary relief to NFP [not‑for‑profit] and charitable organisations that would otherwise be captured’.
In addition to these general concerns, stakeholders expressed significant concern with the inclusion of the following:
‘with funding’ by foreign principals, and
‘collaborations’ with foreign principals.
These two issues, as well as concerns regarding the foreign principal’s knowledge of the activities, are each explored in the successive sections.
With funding by the foreign principal
Under the proposed section, an organisation or individual that receives funding from a foreign principal will have to register under the Scheme if they undertake an activity for the purpose of political or governmental influence.
This may require any organisations and any individuals within Australia who receive donations to investigate the source of funds to determine whether registration is required. The Law Council challenged this requirement in circumstances ‘where no direction accompanies the donation and the foreign principal exerts no influence’.
A number of stakeholders provided examples of how this would require them to register, but would serve no purpose as no agency or direction accompanies the donation. For example World Vision Australia (WVA) strongly advocated that the funding it receives from foreign principals, including USAID and EUROPEAID, does not in itself mean that it acts on behalf of those foreign principals:
We do not however act on behalf of, or at the direction of, any foreign organisation just by virtue of the fact that they have granted us money. WVA disagrees with the implication which arises from the drafting of clause 11(1)(e), namely that receipt of foreign funding means the recipient organisation ‘acts on behalf’ of the donor. … WVA disagrees with the implication which arises from the drafting of the Bill, that receipt of foreign funding or choosing to participate in these important global initiatives where relevant for our region or particular policy focus, means that our organisation acts on behalf of the donor or foreign principal.
Similarly, the higher-education sector in Australia receives funding from foreign principals to undertake research activities. Universities Australia and The Group of Eight expressed concerns about the inclusion of funding in the proposed section. Universities Australia submitted:
There are a number of generous overseas donors who have invested in Australian research and higher education. For example, the United States-based Atlantic Philanthropies has invested more than AU$500 million in Australian projects. Yet if the results of philanthropically-funded research could give rise to beneficial policy change, any communication of that research to Government could potentially be a registrable activity.
To address these concerns, the ACBC recommended that the proposed section be amended to reflect the approach taken in FARA, so as to read, ‘with funding or supervision of the activity in whole or major part by the foreign principal’.
The Department noted the ACBC’s recommendation for such an amendment.
The Committee notes that the recommendation from the Law Council, endorsed by Justice Connect, discussed in the previous section (paras 3.39 and 3.40) would achieve a similar outcome, and provide transparency where there is agency, direction or influence.
In collaboration with the foreign principal
The Bill would require an organisation or individual that collaborates with a foreign principal to register if they undertake an activity for the purpose of political or governmental influence. A number of organisations expressed concern with the inclusion of collaborations in the definition of acting ‘on behalf of’ a foreign principal.
The Bill does not define the term ‘collaboration’, rather the Explanatory Memorandum states it is ‘intended to take its ordinary meaning, such as the person and the foreign principal working together to undertake the activity’.
In its submission, the ALHR noted that ‘collaboration’ is not defined in the Bill nor in the Acts Interpretation Act 1901. Referencing the Cambridge English Dictionary definition of ‘collaboration’, ALHR submitted:
‘On behalf of,’ which normally has the concept of a directing principal and a directed agent, is in this Bill being used to include the situation of two autonomous principals who choose to work together, where the Australian principal is not necessarily being directed in any way by the foreign principal.
The university sector expressed strong concerns regarding the inclusion of collaborations with foreign principals in the Bill such that a vast range of academic research partnerships would likely be captured, acknowledging that ‘research and academic activity plays a significant role in helping shape public policy’.
The Group of Eight outlined research that could be impacted:
Much of our world-class research is carried out with global partners; a significant percentage of that research is cofinanced by global partners; and, in the case of medical research, it is able to be advanced to market often only with the financial assistance of global drug companies. A significant percentage of that research is carried out with the assistance of researchers from other nations. Universities are a global community and we have no borders: that is the only way that research can succeed.
Further, Universities Australia provided the following example of how the international collaborative research activities might be captured by the Scheme:
It is conceivable that any contact between Australian universities or academics and representatives of Australian governments could give rise to liability to register under this scheme if the content of the communication had any relationship to preceding discussions with overseas collaborators or partners. Conceivably, even a short telephone discussion between an Australian academic and a public servant regarding the possibility for participating in an international research scheme could create a liability to register, given that proposed section 15 emphasises that registrable activities give liability to register, even for one-off instances.
The volume of activities may serve to obscure the purpose of transparency, and constrain legitimate collaborations. These concerns were raised by the Group of Eight Australia, the Australian Friends of the Hebrew University, Jerusalem Limited and Technion Australia.
In 2017, Group of Eight universities produced in excess of 23 000 publications involving collaboration with an international author, representing approximately 58 per cent of all member‑university publications. The understanding of The Group of Eight was that ‘every one’ of those publications would require its authors to be registered under the Scheme.
Proposed section 14 (Purpose of activity) may provide an avenue for a court to ameliorate the effects of the inclusion of international collaborations by considering ‘all of the circumstances in which the activity is undertaken’. However this was considered less than ideal, particularly given the volume and value of international collaborations. Proposed section 14 is discussed later in this chapter.
Universities Australia noted that ‘it would be vastly preferable for more concrete legislative guidance to be provided around how far “in collaboration with” a foreign principal should extend’. It was considered that a more defined and clear approach to the term was critical to give effect to the Scheme’s objective.
The Department responded to these concerns, advising that the inclusion of collaborations was to, ‘cover circumstances where the person and the foreign principal are working together, but it can not necessarily be determined that the foreign principal is directing, controlling, supervising or funding the activities of the person’.
The Department also sought to address the sector’s broad concerns that the proposed Scheme would stifle international research activities:
The Scheme is not expected to stifle normal academic collaborative activities. The Scheme may have a role in regulating activities if they are undertaken in collaboration with a foreign individual or public enterprise and are a registrable activity – that is, parliamentary lobbying, general lobbying, communications activity or donor activity in Australia for the purpose of political or governmental influence. In these circumstances, the activities would continue to be permissible – the only requirement under the Scheme is to register and fulfil registrant obligations once registered.
As noted previously, the FARA scheme does not extend to collaborations.
Knowledge of activities to influence
The Bill provides that a person undertakes an activity ‘on behalf of’ a foreign principal if both the person and the foreign principal knew or expected that the person would undertake registrable activities.
The Explanatory Memorandum states that the foreign principal ‘must have an awareness of’, and ‘some role in facilitating’, the activities. A person would not be considered to be undertaking an activity ‘on behalf of’ a foreign principal, where the foreign principal has ‘no knowledge or awareness of’ the activities, and ‘it is purely coincidental that the person’s actions may in some way benefit, or align with the interests of, the foreign principal’.
At a hearing, the Department explained:
The question is whether the person who needs to register is acting on behalf of the foreign principal. There is a difference between the alignment of views, seeking views and informing oneself as to a position and in what respect to advocate and acting at the behest or on behalf of a foreign principal.
At a public hearing, Mr Tony Kevin questioned how in practice the administering department would distinguish between:
an Australian citizen covertly lobbying government officials, and
an Australian citizen independently reaching a conclusion or judgement that a certain position should be advocated following the same contact with that foreign principal.
The FARA scheme does not establish a level of knowledge required (of either the person or the foreign principal), presumably because of the more narrow approach to capture relationships where the foreign principal in some way directs the person, as their agent, to undertake those activities. Such an approach may negate the inclusion of a requirement of a standard of knowledge.
This was considered by stakeholders as a ‘very low threshold’ and the inclusion of a mere expectation that a person might undertake certain activities ‘casts the net too broadly’.
For example, ALHR questioned how a person can always be aware of a foreign principal’s knowledge or expectation that certain acts would be done on their behalf, ‘particularly when [it] relates to something indefinite – that is, to something that the Australian principal might or might not do’.
Addressing the knowledge of the liable person, the Law Council advocated that it is ‘unreasonable’ for an individual or organisation to be charged with an offence for not registering in circumstances where there is no knowledge of the foreign principal’s involvement. The Council noted that the Explanatory Memorandum seeks to exclude circumstances that the foreign principal has no knowledge of the activities, however argued that ‘this is not the effect of proposed subsection … which in its current form does not clarify that the person will not be bound by the framework if that person had no knowledge of the foreign principal’s involvement’.
To address these concerns, the Law Council recommended that the definition of acting ‘on behalf of’ a foreign principal should be amended to only cover circumstances where:
the person and the foreign principal has actual knowledge of the order, request, direction, finance of the foreign principal, and
the person then carries out the activity with the knowledge.
Purpose of the activity
The Bill provides that the purpose of an activity may be determined by having regard to any one or more of the following:
the intention or belief of the person undertaking the activity;
the intention of any foreign principal on whose behalf the activity is undertaken, or
all of the circumstances in which the activity is undertaken.
Therefore, it need not be established that the purpose of influencing political or governmental decisions was the intent of either of the parties. Rather, this may be determined by having regard to ‘all of the circumstances in which the activity is undertaken’.
In a submission, Foxtel applied this provision to its business:
… the fact that Foxtel does not undertake the communications activity with the purpose of governmental influence could be irrelevant, if the foreign principal has that purpose. We can envisage a scenario where, for example, a foreign government, through its state-owned media, attempts to influence the views of other governments (including Australia’s) in relation to some aspect of international trade, or a treaty, or a conflict etc. Therefore, it is possible that a registerable event could occur and, as described below, this would happen without Foxtel’s knowledge.
At a hearing, the Department explained registration liability will ‘depend on what the potential registrant perceives as their purpose’ and that it is not for the Department, as the administering agency, to prove whether a purpose of the activities is to influence political or governmental decision: ‘it’s for them to know and then know whether to register’.
The Committee notes that the ability for the purpose of the activity to be determined by reference to the intention of the foreign principal, or to all of the circumstances, could notionally result in an outcome where a person is subject to a duty to register, but is unaware of the existence of that duty. However, the Committee also notes:
That a person can only be prosecuted for failing to register, under the Bill, where the prosecution can demonstrate that they had knowledge of their requirement to register; and
The existence in the Bill of a framework for the Secretary of the Attorney‑General’s Department to issue a person with a notice, where the Secretary reasonably suspects that the person might be liable to register, effectively drawing the potential duty to register to the person’s attention.
The Committee accepts that it is appropriate that a person may be required to register, in circumstances where they undertake activities on behalf of a foreign principal, and the foreign principal plainly intends for those activities to influence Australian political or governmental processes. The Committee is concerned that removing this requirement would risk introducing a significant gap into the scheme, allowing individuals and companies to be used as tools of influence, provided that they do not share the foreign principal’s purpose. The Committee has made a number of more targeted recommendations relating to the requirement to register and the media exemption to ensure the scheme operates in a manner that is proportionate to its intended outcome, without introducing such a gap.
The Committee further notes that, as a matter of practicality, a person cannot register if they are not aware of a requirement to do so, and that a person cannot be found liable for failing to register under the Bill unless they had knowledge that they were required to register. The Committee considers that this represents an appropriate balance, with the practical outcome that a person may be required to register if they undertake activities on behalf of a foreign principal and are aware of the foreign principal’s intent to influence Australian political or governmental processes, or if such an intent is drawn to their attention.
Table 3.1 outlines the range of registrable activities. Under proposed section 21, a person acting on behalf of a foreign principal (as listed in Table 3.1) will be required to register upon engaging in the following activities, or an arrangement to undertake the following activities:
Table 3.1: Registrable activities and requisite foreign principals
Parliamentary lobbying, in Australia, for the purpose of political or governmental influence
A foreign public enterprise, a foreign political organisation, a foreign business or an individual
General political lobbying, in Australia, for the purpose of political or governmental influence
Any kind of foreign principal
Communications activities, in Australia, for the purpose of political or governmental influence
Any kind of foreign principal
Donor activity, in Australia, for the purpose of political or governmental influence
A foreign government, or a foreign public enterprise, or a foreign political organisation
Source: Foreign Influence Transparency Scheme Bill 2017, proposed section 21
Proposed section 12 provides that an activity will be 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 of the following:
a federal election or designated vote;
a federal government decision, including the Cabinet or a Minister;
proceedings of either House of Parliament;
a process in relation to a registered political party;
a process in relation to an independent member of the Parliament;
a process in relation to an independent candidate in a federal election.
As noted in Chapter 2, the list of processes provided in proposed section 12 will be expanded to include activities for the purpose of political or governmental influence of ‘political campaigners’. The proposed definition of the term ‘political campaigners’ is provided in the Electoral Legislation Amendment (Electoral Funding and Disclosure Reform) Bill 2017 (the EFDR Bill).
Under the EFDR Bill, persons or entities would be required to register with the Australian Electoral Commission as a ‘political campaigner’ if they have ‘political expenditure’ for ‘political purposes’ over a defined threshold. The proposed threshold is $10 000 or more over the previous three financial years, or, $50 000 or more and 50 per cent of the ‘allowable amount’ for that financial year.
The Committee has not sought to reach a conclusion on the proposed definition, and acknowledges that the matter was considered by the Joint Standing Committee on Electoral Matters. However the Committee notes that the definition has attracted significant public interest.
A number of stakeholders expressed concern with the existing ambit of the activities captured in the Bill as presently, and how those activities are defined.
Mr Bret Walker SC advised that ‘the broadest net’ has been deliberately ‘cast in order to bring within “registrable activity” contact ultimately of a communicative kind—that is, ideas from one to the other’. Mr Walker further explained that the scope of these activities has ‘departed … from a colloquial understanding of … “lobbying”‘, and that:
It’s certainly not just persuasion in the sense of seeking to induce agreement with one’s view. It’s for those reasons that coming into contact, communicating with someone by whatever means, will be at the heart of the kind of activity caught and, by progression, through registration.
The Law Council of Australia similarly expressed concern with the breadth of the definition of ‘lobby’. Proposed section 10 provides that the term includes communication, in any way, with a person or a group of persons for the purpose of influencing any process, as well as representing the interests of any person in any process. The Council concluded that the breadth of these definitions will cover a range of activities that are ‘unlikely to have a tangible effect on public policy development, and yet will attract obligations that have criminal repercussions if breached’.
The Law Council reiterated its recommendations for the Bill to be amended to narrow the application of the Scheme.
Stakeholders also expressed concerns regarding the inclusion and proposed definition of ‘communications activities’. Proposed section 13 makes clear that ‘communications activity’ includes the communication or distribution of information or material (whether oral, visual, graphic, written, electronic, digital or pictorial) and will constitute a registrable activity if conducted for the purpose of political or government influence.
The Law Council expressed concern that the provision ‘will have the practical effect of deterring individuals and organisations from engaging in political and policy discussion across a range of communication platforms’. The Council extended these concerns to open letters and opinion pieces that are intended to garner the attention of policy‑makers, all of which are likely to be covered by the proposed scheme where there is an element of foreign involvement.
The HRCA advised that as a ‘communications activity’ is not limited to communications with the public, an ‘exceptionally wide’ range of information and material will be captured by the Bill:
As a result, [the Scheme] would require, for example, the following activities to be disclosed with respect to an unfunded collaboration with an international organisation:
Discussion between HRCA executive of the collaboration;
Internal emails and any publication provided to HRCA members about it;
Anything posted online on the HRCA’s website about the collaboration;
Communications with other NGOs about the collaboration;
Communications with State or Federal government officials about the collaboration;
Communications with government Ministers, Members of Parliament, Parliamentary Committees;
The Australian Academy of Science also expressed concern that the proposed definition of ‘communications activity’ would capture the ‘dissemination of research findings, as well as sharing of raw data and subsequent analysis’ and ‘any presentation of science, research, data or analysis intended to have a meaningful influence on an aspect of government policy’. The Academy stated:
Dissemination of research findings is standard practice in the research community and is a requirement of those funded by public research grants such as recipients of NHMRC [National Health and Medical Research Council] or ARC [Australian Research Council] competitive grant funding.
The Academy noted that much of the standard business of scientists, researchers, representative bodies, universities and research institutions relates to the public and free-flow of information. However the Academy concluded that, without more refined definitions of registrable activities and in particular communication activities in the Bill, these could all be considered registrable activity.
The activities for which registration is required under the Bill are broadly comparable with the FARA scheme, except that:
it is not entirely clear if the FARA requires registration for parliamentary lobbying;
the FARA does not appear to extend to lobbying of a political party or a candidate in an election, and
activities registrable as donor activity are narrower under the Bill than under the FARA.
Former Cabinet Ministers, Ministers, members of Parliament and senior Commonwealth officials
The Bill establishes additional registration obligations on former Cabinet Ministers, Ministers, members of Parliament and other senior Commonwealth positions.
Former elected representatives and former senior Commonwealth officials will be required to register if they are employed by or act for a foreign principal (other than an individual) in the period immediately following their public role. The provisions will capture activities of these persons anywhere in the world, regardless of whether the activities impact Australian political or governmental processes. Limited exemptions apply to these categories of person.
The Bill will require the following to register:
former Cabinet Ministers if they are employed by, or act in any capacity for, a foreign principal (other than an individual) in the three years following their role;
former Ministers and members of Parliament if they are employed by, or act in any capacity for, a foreign principal (other than an individual) in the three years following their role
but only where they contribute skills, knowledge, experience or contacts to their work for the foreign principal, and
former agency and deputy agency heads of Commonwealth departments and agencies to register if they are employed by, or act in any capacity for, a foreign principal (other than an individual) in the 18 months following their role,
but only where they contribute skills, knowledge, experience or contacts to their work for the foreign principal.
These former office holders will not be eligible for the exemption for religious activities and news media activities.
A former Cabinet Minister, Minister, member of Parliament, and senior Commonwealth officials will be able to access the following exemptions:
humanitarian aid or assistance;
legal advice or representation;
diplomatic, consular or similar activities, and
commercial or business pursuits.
This therefore provides exemptions for a broad range of activities undertaken by these former office holders. For example, a former Cabinet Minister would be exempt from registration under the Scheme where that former Cabinet Minister is:
employed by a foreign business, or
acting on behalf of the foreign principal (though not as an employee) to pursue bona fide business or commercial interests in relation to preparing to negotiate or conclude a contract for the provision of goods or services, where that does not relate to national security, defence or public infrastructure.
Mr Peter Jennings was of the view that ‘insufficient safeguards’ regulate post-separation employment by former Cabinet Ministers, Ministers members of Parliament and senior Commonwealth officials. Mr Jennings stated:
My recommendation is that the Committee should test whether more stringent requirements for employment after individuals leave and Government and senior public service positions, where those individuals have had access to highly classified information. This is particularly relevant where individuals may seek to draw on their experience in classified areas of government work in a commercial role afterwards. My view is that, if individuals have had long term access to top secret national security information, then Government should severely restrict their capacity to work for foreign principals outside of the Five Eyes context.
Mr Jennings recommended that it ‘ought not to be possible for a Minister or official to attend meetings of the National Security Committee of Cabinet one month and be working for foreign principals just months after leaving such privileged positions’.
The FARA scheme does not have any equivalent registration requirement for activities undertaken by former elected officials or former senior civil servants.
The Committee sought clarification from the Department as to whether it is the intent of the Bill to make the business and commerce exemption available to former Cabinet Ministers, Ministers, members of Parliament and senior Commonwealth officials. The Department confirmed that this is the intent of the Bill.
The Bill does not place similar registration obligations on former staff of members of Parliament as employed under the Members of Parliament (Staff) Act 1984. This is despite references in the Explanatory Memorandum that lobbying staff is an ‘inherently political’ activity.
In response to questions from the Committee as to why staff of members of Parliament were not included in the Scheme, the Department stated:
The public interest in knowing that a former MOPS Staff member is acting on behalf of a foreign principal is arguably less than in relation to the other categories with a significant public role. The department is of the view that MOPS Staff should not be included in the Scheme at this time, but this could be considered as part of the review required by section 70 which must take place within five years of the Scheme commencing.
The Committee notes the following issues were raised regarding the scope of actors and activities proposed by the Bill:
the wide range of conduct captured is beyond the objective of the Bill and may impede the intended transparency;
the breadth of the definition of a foreign principal:
the scope of foreign businesses captured, including businesses that are organised or created under Australian law;
including individuals who are not citizens or permanent residents despite the diversity of the Australian community, and that the number of persons falling into this category cannot be identified with precision at any time;
the definition of undertaking activities on behalf of a foreign principal as drafted, captures a wide range of relationships which would not usually be considered to be within the commonly understood meaning for ‘on behalf of’ and which may not have a sufficient nexus or materiality;
more specific concerns with the inclusion of the following terms in the proposed definition of undertaking activities on behalf of a foreign principal:
the inclusion of ‘with funding from the foreign principal’ would capture a range of relationships but serve no purpose as no agency or direction accompanies the donation;
‘in collaboration with the foreign principal’ would require a significant number of registrations (most notably in the charities and university sector) and the volume of activities may serve to obscure the purpose of transparency, and constrain legitimate collaborations;
that the foreign principal had knowledge or mere expectation of the activities establishes a very low threshold and that the net is cast too broadly;
that the provisions that determine the purpose of the activity may be inappropriately framed;
the list of registrable activities, particularly the definition of ‘lobby’ and ‘communications activities’ will cover a range of activities that are may have little tangible effect on public policy development, and yet will attract obligations that have criminal repercussions if breached;
the regulation of, and exemptions available to, former Cabinet Ministers, Minister, members of Parliament and senior Commonwealth officials;
the absence of regulation of former staff of members of Parliament employed under the Members of Parliament (Staff) Act 1984.
A number of these concerns are addressed by the Attorney General’s proposed amendments. These proposed amendments are discussed in Chapter 9.
In Chapter 10 of this report, the Committee provides its comments and discusses areas where it considers further refinements may be made to address outstanding issues, improve the clarity and proportionality of the proposed measures, and to ensure adequate safeguards are provided.