This Chapter discusses the proposed exemptions set out in Division 4 of Part 2 of the Foreign Influence Transparency Scheme Bill (the Bill). 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 exemptions in the original Bill provide that activities, which would otherwise be registrable activities, are exempt from the requirement to register under the Scheme. The exemptions apply only to particular activities, and the application depends on who is undertaking, who the foreign principal is, and the purpose of the activity.
As noted in Chapter 3, the proposed breadth of registrable activities and actors ‘means great reliance falls upon the seven exemptions’. Broadly, the Bill proposes the following exemptions:
activities that are for the provision of humanitarian aid or humanitarian assistance;
the provision of legal advice and representation;
where a person is entitled to diplomatic immunity or is working for the United Nations;
activities that are in accordance with the doctrines, tenets, beliefs or teachings of a religion;
certain news media activities;
activities that are bona fide commercial or business pursuits for the provision of certain goods or services, and
other circumstances, as to be prescribed in rules.
A number of proposed exemptions are absolute—that is, they apply to all types of registrable activities, irrespective of who is the foreign principal or who the person is undertaking the activity. Other exemptions are more limited in their application, and are restricted to certain categories of foreign principals or to certain persons undertaking the activity.
This chapter discusses each of the exemptions listed above and concerns raised. A large number of submissions and witnesses at public hearings expressed concerns about both the broad construct of the Bill which then relies on exemptions and the limited scope of those exemptions.
The Attorney‑General’s Department (the Department) noted that any exemptions to the obligation to register under the Foreign Influence Transparency Scheme (the Scheme) should not undermine the purpose of the Bill:
The important thing about the scheme is that it’s defined by reference to the influence, not who is bringing it, so we need to be careful that we don't undermine the purpose of the scheme, which is to bring light to that influence. If there are large tracts of the body of persons and entities who may be influencing decision-making that are exempt, that can potentially undermine [the Scheme].
Similarly, the Australian Security Intelligence Organisation (ASIO) cautioned against ‘blanket carve‑outs’ as such an approach ‘would probably cause us some problems just in terms of the vulnerabilities that that might expose. … [A]ny gap or any chink does become … an exploitable vulnerability’.
Each of the exemptions, and concerns raised by stakeholders, are 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.
Section 24 of the Bill will exempt activities that are, or relate solely to, the provision of humanitarian aid or humanitarian assistance.
This exemption will apply in all circumstances, irrespective of who is the foreign principal or who the person undertaking the activity. A former Cabinet Minister, Minister, member of Parliament or senior Commonwealth official will be able to rely on the exemption in the period immediately following their public role.
The terms ‘humanitarian aid’ and ‘humanitarian assistance’ are not defined in the Bill, though the Explanatory Memorandum indicates that the terms are intended to be construed broadly, and would extend to activities ‘beyond the act of directly giving or providing humanitarian aid or assistance, such as activities relating to processes and procedures which support the provision of humanitarian aid or assistance’.
… material and logistical assistance provided during man-made and natural disasters and crises, and during times of conflict or civil unrest … assistance where the purpose is to save lives, alleviate suffering and maintain human dignity … the provision of funds, food, water, sanitation, shelter, medical or logistical support during humanitarian crises … attending meetings, making representations, and developing and producing communication materials where those activities are undertaken solely in relation to the provision of humanitarian aid and humanitarian assistance.
A number of stakeholders discussed the limited scope of the proposed exemption. For example, the Law Council of Australia noted that the examples provided in the Explanatory Memorandum appear to limit the exemption to humanitarian aid after a crisis, and may not extend to welfare and welfare bodies ‘more generally’.
The Human Rights Council of Australia (HRCA) was of the view that the wording of the exemption, and the limitation to ‘humanitarian aid or assistance’ would not cover significant work undertaken by that organisation. The HRCA promotes human rights in Australia, in the region and around the world, and has Special Consultative Status with the United Nations and is entitled to be present at and make statements to meetings of the United Nations Human Rights Council.
Australian Lawyers for Human Rights (ALHR) noted that this Committee has previously examined similar exemptions, and issues regarding the limited scope of the wording proposed in the then Counter‑Terrorism Legislation Amendment (Foreign Fighters) Bill 2014. ALHR stated:
The exemption concerning humanitarian aid or assistance in section 24 shares the defects of a similar exemption in the in the Criminal Code Act 1995 (which was amended by virtue of the Counter‑Terrorism Legislation Amendment (Foreign Fighters) Act 2014). The effect of that amendment was to make it much harder to claim a humanitarian aid exception, as the exception was to apply only where it was the sole reason for the conduct in question, even though there could be many additional reasons why the particular conduct was carried out that were not related to offensive activities. There are similar difficulties with the wording here. Given that any conduct can convey multiple messages to different audiences, it is likely to be virtually impossible for anyone to prove that their conduct had a sole purpose or a sole message.
Similarly, Justice Connect expressed concern that the exemption is ‘vaguely defined’, and is inappropriately limited to ‘response to actual crises or conflict or civil unrest’. It stated:
This is limiting. It is widely accepted that humanitarian assistance is often provided as a way of preventing conflict or civil unrest or in response to other situations (eg. health outbreaks). We also note the difficulty of the words ‘relates solely to’ [and] … the definition should be extended to cover a broader range of humanitarian action than those covered by the term ‘is, or relates solely to’.
The Australian Council for International Development submitted that the terms used in the proposed exemptions are ‘generally understood to be limited to emergency responses, and not to long‑term development assistance’. The Council stated that the absence for an exemption for non‑government organisations and the ‘critical’ long‑term development work they undertake, is ‘highly anomalous’.
Oxfam Australia also raised concerns regarding the narrow definition which is not reflective of how aid is actually provided. It commented:
the exemption provided in the legislation for humanitarian aid or assistance is too narrow. This exemption exists ‘if the activity is, or relates solely to, the provision of humanitarian aid or humanitarian assistance’. It is extremely unlikely that anything relates solely to one thing, and certainly difficult to determine when activity relates solely to one thing. Regardless, for Oxfam, in discussing and advocating in relation to humanitarian aid or assistance, issues of entrenched poverty and systemic disadvantage are also relevant, as are issues of climate change and gender. Thus while focusing on humanitarian aid and assistance, Oxfam would likely also seek to address and highlight underlying causes which could be considered to be beyond the scope of the exemption.
World Vision Australia agreed that the exception ‘is too narrow’, commenting that the terms ‘humanitarian aid and ‘humanitarian assistance’ are generally understood to be ‘limited to emergency responses and not to long term development work and assistance. We submit that this is not, and should not be an intended consequence’.
In answers to questions on notice, the Department referred back to the Explanatory Memorandum which provides that ‘the terms ‘humanitarian aid’ and ‘humanitarian assistance’ are intended to include material and logistical assistance provided during man-made and natural disasters and crises and during times of conflict or civil unrest’.
By way of comparison, the exemption in the FARA scheme has a different focus, as it relates to the solicitation and collection of funds which is not a registrable activity under the Bill. FARA provides that a person would be exempt where they are engaged in the soliciting or collecting of funds and contributions within the United States where those funds are ‘to be used only for medical aid and assistance, or for food and clothing to relieve human suffering’. Therefore, while FARA applies to a wider range of activities that are not captured by the Bill, it also contains an exemption that would apply to a broader range of humanitarian purposes.
Extension of exemption to other charitable activities
A number of submissions and witnesses at public hearings expressed concern about the limited scope of the humanitarian exemption. There were concerns that the exemption did not extend more broadly to charities and the not‑for‑profit sector and that, given the scope of activities included, compliance could be excessively onerous.
In a detailed submission, The Salvation Army explained its internal governance and, reflecting on the examples provided in the Explanatory Memorandum, concluded that to the extent that it its staff engage in registrable activity, ‘the entire Officership and full body of employees would presently fall within the ambit of the Bill’. It suggested that the Bill did not appear to appropriately account for governance structures such as theirs, and that a key role of The Salvation Army is to engage publicly on issues of social justice:
Whilst it is generally considered an apolitical organisation, The Salvation Army does regularly express views on matters of public interest and issues of social justice. Looking at the example given of the Catholic Priest in the Explanatory Memorandum to the Bill (in reference to the operation of section 27 of the Bill), to the extent that they engage in a registrable activity, the entire Officership and full body of employees would presently fall within the ambit of the Bill. This conclusion is reached if it is deemed by the Scheme Operator that all Officers and employees are ultimately subject to the authority of the General (who is located in the United Kingdom and is not an Australian Permanent Resident or Citizen). This conclusion is also reached if it is deemed by the Scheme Operator that all Officers and employees are ultimately subject to the authority of the Australian National Commander and he or she is a foreign principal (such as with the present National Commander). Even if (for some reason, which is hard to discern on the face of the Bill) neither of these views were taken by the Scheme Operator, to the extent that an overseas appointed Officer has subordinates reporting to him / her anywhere within the strict hierarchical structure of The Salvation Army, then all who are subordinate to him / her would need to register with the Scheme and pay the relevant fee (annually).
The Salvation Army went on to detail the number of persons in their organisations who may be affected, and that the consequences of the Bill as it stands would be ‘catastrophic’:
Potentially, this could mean that up to 10,225 persons within The Salvation Army in Australia would be required to register with the Scheme and pay the relevant fee annually. Such a consequence in terms of the administrative burden and cost to The Salvation Army is immediately apparent and would be catastrophic to the ability of The Salvation Army to continue to provide the role it presently plays within Australian society. Surely, this must not be the intent of the Parliament and needs to be addressed at this consultative stage of the draft legislation.
The Australian Charities and Not‑for‑Profits Commission (ACNC) was established in 2012 as the national, statutory regulator of the charity and not‑for‑profit sector. Over 55 600 charities are regulated by the ACNC, and the sector turns over more than $130 billion per annum, holds over $260 billion in assets, and is supported by 2.9 million volunteers.
Providing an overview of the impact of the Bill on the charities sector as a whole, the ACNC stated that the Bill ‘places an unnecessary regulatory burden on charities’, and that,
… the broad definitions set out in the Bill may decrease the amount of advocacy work undertaken by charities that are unable to meet the proposed regulatory burden and the risk of non‑compliance.
Other stakeholders shared these concerns, some describing the Bill as having a ‘chilling effect’ on the vitally important advocacy work that charities pursue as part of their charitable purposes. Further, Justice Connect expressed concerns that the Bill may dissuade charities and not‑for‑profit organisations from partnering with other international organisations:
In our global world, NFPs and charities should be encouraged to work together to pursue innovative solutions to social problems – including drawing on (and being supported by) international experts and partners. … [The] scheme may result in organisations deciding not to explore beneficial (and cost effective for Australians) collaborations with overseas partners, in order to avoid the requirements proposed under this Bill.
The ACNC advised that to become and remain registered under the Charities Act 2013, an organisation must have a ‘charitable purpose’, yet this charitable purpose would now require registration under the Bill. A ‘charitable purpose’ includes the purpose of advancing health, education, social or public welfare, religion, culture, reconciliation, mutual respect and tolerance between groups of individuals that are in Australia, promoting or protecting human rights, the security or safety of Australia or the Australian public; preventing or relieving the suffering of animals, the natural environment. This also includes promoting or opposing a change to any matter established by law, policy or practice in the Commonwealth, a State or a Territory or another country as long as the advocacy is in furtherance or aiding the other charitable purposes previously identified.
The ACNC noted that it is not a disqualifying purpose to distribute information, or advance debate, about the policies of political parties or candidates for political office (such as by assessing, critiquing, comparing or ranking those policies), and these activities are within the meaning and public expectation of a charitable purpose.
World Vision Australia noted that the Bill intends to establish a framework to regulate ‘inherently political activities’, and took issue with the inclusion of such charitable activities arguing that it is ‘unnecessary and inappropriate for our non‑partisan advocacy activities to be caught by this Bill’. The organisation explained:
The result of the Bill is that those activities would be categorised as political in nature by implication. Politicising charities like WVA [World Vision Australia] gives the public the wrong perception of what charities such as WVA stand for, which in turn has serious implications for how we can engage with the Australian public (including in fundraising).
The Pew Charitable Trusts disputed the suggestion of control or covert influence for another purpose that was implicit in the requirement for registration. They maintained that the current regulatory framework provided oversight and ensured the integrity of charities:
The language of such a registration would also create the impression that the government perceives strictly non-partisan charities, including ourselves and regional Indigenous organisations, to be foreign controlled and seeking improper influence in Australian politics.
Pew is not aware of evidence of charities receiving international philanthropic funding posing risks for inappropriate or unlawful activities. To our knowledge, the case has not been made that such work should be restricted and regulated beyond existing oversight by the ACNC, Australian Tax Office and other financial regulators. If there is a problem with an individual charity, it can be addressed through the existing ACNC regulatory framework.
A large number of stakeholders, including the Law Council, the Community Council for Australia, and the RSPCA, submitted that charities registered with the ACNC should be exempt from the Bill. The Law Council noted:
Registration with the ACNC not only necessitates a range of reporting and behavioural standards, it also precludes the entity from engaging in, or promoting, activities that are unlawful or contrary to public policy, as well as promoting or opposing a political party or a candidate for political office. A further registration step for such charitable entities would entail an unnecessary regulatory burden.
The Community Council for Australia, provided evidence at a public hearing on the regulation of charities by the ACNC:
… charities are very well-regulated in Australia. In fact, with the charities regulator, the Australian Charities and Not-for-profits Commission, charities' compliance in Australia is higher than anywhere in the world … Their bona fides have to be well-established and reported on. Any charity not pursuing its charitable purpose can be subject a complaint from anyone and the complaint will be investigated. Charities found not to be pursuing their purpose or seen to be pursuing a political purpose will be deregistered.
The Salvation Army also advocated for a blanket exemption for its operations and any of its wholly‑owned entities throughout Australia. Alternatively, the Salvation Army recommended that only the foreign principal—in its case, the General and National Commander—be required to register.
In advocating for an expanded advocacy exemption for charities, a number of stakeholders raised apparent inconsistencies with an exemption provided for certain commercial or business pursuits.
For example, the Community Council for Australia submitted that business and industry pursuing commercial interests, and charities pursuing charitable purposes alike ‘should be able to advocate for their cause and their community’. It continued:
This Bill allows any foreign company to engage in any activity in support of their international commercial interests, but seeks to restrict most others. … [It] does seem bizarre to restrict the activities of registered charities in Australia seeking to pursue their charitable purpose in accordance with the regulations and restrictions enforced by the charities regulator, while allowing any international business to pursue their vested interests without any restriction.
Similarly, Justice Connect commented that it could not ‘see why a business or commercial entity established by an individual for their own private benefit should be entitled to an exemption’ as compared to a charitable organisation that ‘is established, for example, to help people inflicted by an illness, for which the organisation does not receive a benefit but instead is for the public benefit’.
WWF-Australia expressed alarm at this apparent inconsistencies, and that the provisions of the Bill seemed at odds with healthy and engaged democratic dialogue:
In an act of surprising inconsistency, this Bill imposes onerous obligations on Australian charities pursuing their charitable purpose while allowing any company including foreign companies to engage in similar activities in support of their commercial interests without similar restrictions. As a result, any business (including overseas business) seeking to influence an Australian government or political party can set up an office in Australia and engage in direct lobbying activities with little or no accountability, and certainly no requirement to register as a ‘foreign principal’.
A healthy, functioning democracy requires citizens, business, industry groups, community groups and charities to engage in public policy. Where the activities of registered charities are restricted, while businesses can pursue their vested interests without any restriction, democracy cannot flourish.
The ACNC expressed concern that the proposed Scheme would require charities to register and submit reports to three different government entities—the ACNC, the Australian Electoral Commission and the department responsible for administering the proposed Scheme.
The ACNC noted that there is no current requirement under the Australian Charities and Not-for-Profits Commission Act 2012 or the Australian Charities and Not-for-Profits Regulation 2013 for charities to disclose relationships with foreign entities. However, the Commonwealth Electoral Act 1918 already requires entities to inform the Australian Electoral Commission via an annual return where a donation over the disclosure amount has been received for the purposes of political expenditure. These donations may be from foreign entities, but the annual returns are not specifically targeting such information.
Charities registered by the ACNC are required to complete an annual information statement, which is due within six months of the end of the charity’s annual reporting period. Charities must also submit returns to the Australian Electoral Commission within 16 weeks of the end of the financial year.
However, not all stakeholders supported the extension of an exemption to the charity sector. For example, Mr Peter Jennings considered that the Bill currently sets out appropriate safeguards for the interests of the community. He went on to note that exempting charities would be a ‘green light’ to foreign intelligence organisations, highlighting the avenues through which they could continue to exert, or redirect their efforts to influence Australian political, governmental and public decision‑making.
Responding to recommendations to extend an exemption to ACNC‑registered charities, the Department stated that ‘any exemptions … must be such that the Scheme’s transparency objectives are not inadvertently undermined’. The Department went on to note:
…that a charity is regulated in one context does not mean that it ought not to be the subject of obligations in another context. Those obligations are for a separate purpose. The purpose here is to bring transparency to their dealings.
The Department submitted:
Registration with the ACNC and registration under the Scheme seek to achieve different purposes. The ACNC maintains a register of charitable entities for the purpose of maintaining, protecting and enhancing public trust and confidence in the charities sector through increased accountability and transparency. In contrast, registration under the Scheme seeks to provide decision-makers and the Australian public with an understanding of the level and extent to which foreign actors are seeking to influence Australian political and governmental processes, often in ways that are legitimate and lawful.
[A] charity that engages in registrable activities in Australia on behalf of a foreign principal for the purpose of political or governmental influence would be required to register under the Scheme. … [The Department] anticipates that, although all charities engage in advocacy, it is likely that not all do so on behalf of a foreign principal. Groups and entities who advocate on their own behalf, or on behalf of a domestic principal, would not need to register under the Scheme.
However, the Department also advised that the definition of ‘charitable purpose’ in the Charities Act 2013 ‘may provide a basis on which such an exemption could be crafted … [where] the sole purpose for which the activity is undertaken is a charitable purpose’.
The FARA scheme does not have a directly comparable exemption, however it does provide exemptions for activities that are private and non‑political that are ‘not serving predominantly a foreign interest’.
Legal advice and representation
Proposed section 25 of the Bill will exempt activities that are solely, or solely for the purposes of, the provision of legal advice or legal representation in judicial, criminal or civil law enforcement inquiries, investigations or proceedings.
The exemption will apply in all circumstances, irrespective of who the foreign principal is or who the person undertaking the activity is. A former Cabinet Minister, Minister, member of Parliament or senior Commonwealth official will be able to rely upon the exemption in the period immediately following their public role.
The Explanatory Memorandum notes the exemption is only intended to exempt,
… those activities that relate to judicial, criminal or civil law enforcement inquiries, investigations or proceedings. Therefore, if a foreign principal engaged a legal practitioner to undertake activities such as parliamentary lobbying or communications activities for the purpose of political or governmental influence, and those activities were not protected by legal professional privilege, then that legal practitioner would be required to register with the scheme.
At a public hearing, the Department outlined that the goal of the exemption was to ensure that professional services that may be subject to legal professional privilege would not qualify as registrable activities. The Department further stated:
To the extent that lawyers may be involved in other types of activities to which that type of privilege does not attach, we don’t see why they shouldn’t be subject to the scheme in the same way as everybody else.
Some submissions and witnesses at public hearings expressed concern about the narrow scope and potentially limited utility of the exemption. Concerns centred upon two main issues:
the exemption being constrained to judicial, criminal or civil law enforcement inquiries, investigations or proceedings, and
uncertainty about whether the exemption would extend to activities that are incidental to the provision of legal advice or legal representation.
The Law Council submitted that limiting the exemption to judicial, criminal or civil law enforcement inquiries, investigations or proceedings ‘is unnecessary and should be omitted’.
The Law Council and Law Firms Australia provided a number of examples of circumstances in which a legal professional could provide legal advice or representation other than in judicial, criminal or civil law enforcement inquiries, investigations or proceedings. These activities were characterised as falling outside of the scope of the exemption, and so would require the legal professional to register under the Bill. These examples ranged across commercial, administrative and contractual law, including responding to a Commonwealth tender, lodging a debtor’s petition to the Official receiver, and applying to the Australian Securities and Investment Commission to incorporate a proprietary company.
Law Firms Australia also submitted it was important that the requirements of the Bill do not conflict with legal professional privilege obligations, and that it should explicitly be stated that compliance with the Scheme does not result in any waiver or forfeiture of legal professional privilege, nor a breach of legal or professional obligations to the client (where the client is a foreign principal).
Law Firms Australia put forward two alternative amendments to address the concerns outlined in their submission. These were:
amend the proposed definition of ‘lobby’ at section 10 of the Bill to exclude representations made to government in the normal course of professional services, or
expand the legal advice or representation by omitting reference to judicial, criminal or civil law enforcement inquiries, investigations or proceedings.
The Law Council also recommended the exemption be expanded to read ‘activities undertaken on behalf of a foreign principal if the activity is, or is incidental to, the provision of legal advice or legal representation’. The effect of this would be to remove any limitation to judicial, criminal or civil proceedings.
Although the Department advised that the intention of the exemption ‘is to cover all legal advice’, it also was of the view that the exemption ‘should remain limited to legal representation in relation to judicial, criminal or civil law enforcement inquiries, investigations or proceedings’. The Department elaborated:
The department’s view is that ‘legal advice’ would encapsulate services incidental to the provision of legal advice, as the term is to be construed broadly and includes include professional legal advice provided by a legal practitioner whether in oral or written form. It may not be appropriate to extend the exemption relating to legal representation to incidental services, as this may defeat the transparency objective of the Scheme.
The FARA scheme contains a broadly equivalent exemption.
Extension to other professions
The Bill does not currently contain an exemption for members of, or activities in connection with, certain professions. The Committee received a number of submissions and heard evidence at public hearings about the desirability of including an exemption of this nature.
The Law Council provided an example of a medical practitioner advocating for policy reform on behalf of a class of patients who are foreign principals, submitting that, as presently drafted, the medical practitioner may be required to register under the Scheme.
For example, the existing Commonwealth’s Lobbying Code of Conduct exempts certain professions (such as tax agents, customs brokers and liquidators) where representations to government are part of the ‘normal day-to-day work of people in that profession’. The Code of Conduct also exempts members of professions, such as doctors, lawyers or accountants, who make occasional representations to government on behalf of others in a way that is incidental to the provision to them of their professional or other services.
The Law Council recommended that, ‘at a minimum, it would be appropriate to include an equivalent exemption [to that in the Lobbying Code of Conduct] in the Bill’. Alternatively, the recommendation provided by Law Firms Australia, that the proposed definition of ‘lobby’ at section 10 of the Bill be amended to ‘exclude representations made to government in the normal course of professional services’ may also provide a solution.
The Department responded to the Law Council’s recommendation, and submitted the following response:
The department accepts that requiring registration of persons who make only occasional representations to Government on behalf of others in a manner than is incidental to their professional or other services may impose an unnecessary regulatory burden. However, it is important that any exemption is not crafted so broadly as to allow people to avoid registration obligations under the Scheme where they undertake registrable activities on behalf of a foreign principal.
The FARA does not contain an exemption for professional services, however it does exempt activities where the person has registered under the Lobbying Disclosure Act 1995 in connection with the person’s representation of that foreign principal.
Diplomatic, consular and similar activities
Proposed section 26 of the Bill will exempt any activities that are undertaken on behalf of a foreign government if the person undertaking the activity:
is entitled to certain diplomatic, consular or similar privileges and immunities, or
is a United Nations (UN) or associated person.
The exemption will only apply to activities that are within the scope of the functions that entitle the person to the privileges and immunities, or that the person undertakes in the person’s capacity as a United Nations or associated person.
The exemptions will also only apply where the activity is undertaken on behalf of a foreign government. If an activity is undertaken on behalf of a foreign public enterprise, a foreign political organisation, a foreign business (which includes foreign organisations) or a foreign individual, the exemptions will not apply.
A person who is a former Cabinet Minister, former Minister, former member of Parliament or former senior Commonwealth official will not be able to rely upon the diplomatic, consular or other privileges and immunities exemption at section 26. Accordingly, if a person who occupied one of these roles goes on to work in a foreign embassy, consulate, or diplomatic mission, they will still be required to register under the Scheme despite the existence of this exemption. The Explanatory Memorandum does not provide reasons as to why the exemption does not extend to these categories of persons.
However, if a former Cabinet Minister, former Minister, former member of Parliament or former senior Commonwealth official goes on to work for the UN, they will have access to that exemption.
Diplomatic, consular and mission officers
The Bill exempts the activities of persons entitled to privileges and immunities under the Consular Privileges and Immunities Act 1972, the Diplomatic Privileges and Immunities Act 1967 and the Overseas Missions (Privileges and Immunities) Act 1995, if the activities are within the scope of the functions that entitles the person to the privileges and immunities.
The Explanatory Memorandum states that the exemption is intended to apply where consular officials, diplomatic officials or staff members are performing any of the official functions, responsibilities or duties of their role. The Explanatory Memorandum provides:
Engagement by these officials with members of Parliament and the broader Australian Government is a core component of their roles as consular or diplomatic officials. Such activities commonly involve representing the views of the foreign government and seeking to influence the Australian Government’s position on various matters. Such engagement is also transparent in that there is no uncertainty about the fact that consular or diplomatic officers represent the interests of a foreign government.
The terms ‘privileges’ and ‘immunities’ are not defined in the Bill. However, the privileges and immunities Acts referred to above give meaning to these terms, as do the Vienna Conventions on Consular and Diplomatic Relations. These include personal inviolability, the right to communicate with the authorities of the receiving State, and immunity from jurisdiction (criminal, civil and administrative jurisdiction).
For certain diplomatic, consular and other officials, privileges and immunities are absolute—they apply to all activities of the person, whether or not they are undertaken in a personal or a professional capacity.
For other officials, including officers who are nationals or permanent residents of the receiving State, privileges and immunities will only apply to activities undertaken in the course of that person’s official functions and duties. This is known as ‘functional immunity’. The proposed exemption will, in effect, ‘mirror’ the extent to which absolute or functional immunity applies to a diplomatic, consular or other official.
United Nations and associated persons
The Bill also exempts activities of persons who are UN or associated persons which are performed in the course of their capacity as a UN or associated person. The term ‘UN or associated person’ is defined in subsection 71.23(1) of the Criminal Code Act 1995 to mean ‘a person who is a member of any UN personnel or associated personnel’.
The definition of UN or associated person is confined to personnel carrying out activities in support of a UN operation, and officials and experts present in an official capacity in the area where a UN operation is being conducted. The definition of ‘UN operation’ is limited to operations for the purpose of maintaining or restoring international peace and security or where the Security Council or General Assembly has declared that there exists an exceptional risk to the safety of the personnel engaged in the operation. The exemption does not therefore apply to activities of a UN employee or associated person that are not directly related to a specific UN operation.
The Explanatory Memorandum notes that the exemption is intended to apply where a UN or associated person could ‘be considered to be acting on behalf of a foreign government which has provided funding to the UN’.
The Explanatory Memorandum further notes that ‘little transparency would be gained’ in requiring UN and associated persons to register ‘when they are clearly acting within their official functions, responsibilities or duties’.
In questions in writing to the Department, the Committee sought clarification as to why the exemption was not extended to other international organisations to which Australia is a member. The Department responded:
UN officials neither represent nor advance the interests of particular foreign principals but are instead concerned with the international community. To the extent that other international organisations represent the interests of the international community, it may be appropriate to exempt these officials from the registration requirements under the Scheme. However, it is important that any additional exemptions in the FITS Bill be appropriately limited so as not to undermine the Scheme’s transparency objective.
The exemption for diplomatic and consular activities appears to be narrower in the FARA scheme as it appears to exclude certain types of diplomatic and consular staff. The FARA exemption does not apply to public‑relations counsel, publicity agents, or information‑service employees.
Proposed section 27 of the Bill will exempt from registration activities that are undertaken on behalf of a foreign government if they are, or are solely for the purposes of, acting in accordance with the doctrines, tenets, beliefs or teaching of the particular religion of the foreign government.
The Explanatory Memorandum states that this exemption:
… seeks to avoid the activities of the churches affiliated with foreign government, such as the Catholic Church, being registrable under the scheme. This exemption is intended to exclude the activities of religious bodies which have such a clear and transparent relationship with a foreign government that registration under the scheme would not achieve additional transparency.
The Explanatory Memorandum goes on to state that the exemption will cover circumstances where representing the teachings of the church is ‘akin to representing the views of the government’.
The exemption is not a blanket exemption. It will only apply where the activities are undertaken on behalf of a foreign principal that is a foreign government. As such, it will not be available to religious activities on behalf of 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.
Further, the exemption will not apply to persons who are former Cabinet Ministers, Ministers, members of Parliament or senior Commonwealth officials. The Explanatory Memorandum provides that this is an appropriate limitation as:
… such persons are distinguished from other individuals or entities because of the influence they have by virtue of their previous roles. There is merit in the Australian public and government decision makers knowing when and in what circumstances such persons are acting on behalf of a foreign government.
The Committee received a number of submissions, and received evidence from a number of witnesses, criticising the religious exemption. These criticisms focussed on the mischaracterisation of the Catholic Church in Australia as being ‘an agent’ of a foreign government, namely of the Vatican City.
The ACBC provided a detailed submission explaining the legal standing of the Catholic Church in Australia, and the legal standing of the Pope as head of the Church and head of the Vatican City. The ACBC submitted that the characterisation of the Catholic Church in Australia as being affiliated with the foreign government of Vatican City is a common misunderstanding.
The ACBC also submitted that while the Pope is the supreme head of the Catholic Church, Bishops are not delegates of the Pope and each govern the particular Church as the ‘vicar and ambassador of Christ’. Similarly, during the public hearings, Bishop McGuckin emphasised:
I want to be clear in rejecting the characterisation of the Catholic Church found in the explanatory memorandum. Catholics are followers of Jesus Christ. We are not agents of a foreign government.
As the Catholic Church does not act on behalf of a foreign government, proposed section 27 will have no effect on the Catholic Church in Australia.
While submitters emphasised that the Catholic Church and Catholics within Australia do not act on behalf of a foreign government, concern was expressed about whether the Pope or other church officials outside of Australia could nonetheless be considered to be a foreign principal (as an individual who is neither an Australia citizen nor a permanent Australian resident) under the Bill. This could have wide-ranging implications for Catholics and the Catholic Church in Australia.
Proposed paragraph 10(e) of the Bill defines ‘foreign principal’ to mean an individual who is neither an Australian citizen nor a permanent Australian resident. If the Catholic Church in Australia, clergy, officials and lay Catholics could be said to be acting on behalf of the Pope or a church official as a foreign individual, they may be required to register under the Scheme. This is because the proposed religious exemption is limited to foreign principals that are ‘foreign governments’ and therefore, does not apply to individuals who are not Australian citizens or permanent residents.
If this were the case, the ACBC expressed concern that the Bill would require,
… every bishop, priest, deacon, religious sister, brother, lay person or Catholic-controlled legal entity advocating or communicating in relation to public policy to register and report on their activities under the terms of the Bill. More than 5.2 million Australians identified as Catholic in the 2016 Census.
The ACBC therefore recommended expanding the exemption at section 27 to cover, amongst other things, activities done ‘in good faith for predominantly religious, philanthropic, educational, scientific or artistic purposes’. This would be irrespective of the whether foreign principal is an individual, government or organisation. This wording would align with the approach taken in the FARA, with applies regardless of the type of foreign principal and therefore, whether or not the religion in question is the religion of any particular government.
In response to questions from the Committee on the availability of the FARA exemption, the ACBC advised that the United States Conference of Catholic Bishops and the Catholic Health Association of the United States of America reported that ‘they were not aware of any instances where the exemption had not been effective to exempt Catholic persons and services from the operation of the FARA’. The ACBC re‑iterated the recommendation for an alternative wording to the proposed religious exemption to mirror that which exists in the United States.
However Ms Valerie Heath advocated against the inclusion of an exemption for religious activities, commenting that ‘the purpose or rationale for this exemption is not evident.’ She went on to state that the ‘Australian government is secular and freedom from religion is as important to the Australian polity as individual freedom to practice religion’. This position was also made by Justice Connect.
In answers to questions from the Committee, the Department noted that in light of evidence from the ACBC, the Catholic Church in Australia ‘may not have a foreign principal, in which case registration is not required’. It would appear from this response that the Department has limited its examination of the ACBC’s evidence to that organisation’s concerns regarding the exemption’s applicability to the Pope as a head of the Church and the head of a foreign government.
The Department’s response did not engage with ACBC’s concerns that the exemption would not extend to the Pope as either a non-citizen nor a permanent Australian resident. If the Catholic Church in Australia, clergy, officials and lay Catholics could be said to be acting on behalf of the Pope or a church official (in their capacities as a foreign principal), they may be required to register under the Scheme.
News and media
The Bill establishes that communications activities undertaken within Australia on behalf of a foreign principal for the purpose of influencing a political or governmental process will be registrable activities.
The term ‘communications activity’ is broadly defined to cover all forms of communication on behalf of a foreign principal, including via newspapers, magazines and editorials. This category of registrable activity has the potential to capture an extensive range of actors and activities, including media organisations.
Proposed section 28 of the Bill will exempt from registration activities that are solely, or solely for the purposes of, ‘reporting news, presenting current affairs or expressing editorial content in news media’.
The terms ‘reporting news,’ ‘presenting current affairs’ and ‘expressing editorial content in news media’ are not defined in the Bill. However, the Explanatory Memorandum states that ‘expressing editorial content in news media’ is intended to refer to editorial content that is ‘selected and presented by media professionals including journalists, editors and producers and is intended to apply to traditional news sources such as print and online newspapers, television news and radio’.
The Explanatory Memorandum further provides that ‘reporting news’ and ‘presenting current affairs’ is intended to refer to news that is investigated, selected and presented by media professionals including journalists, editors and producers and is intended to apply to traditional news sources. These terms do not extend to ‘capture the presentation of information about current events by members of the general public, such as through social media’.
The exemption will only apply to activities undertaken on behalf of a foreign principal that is a foreign business or a foreign individual. In effect, this will exempt private news media from registration, but not State-owned media or media with any other link to a foreign government, foreign public enterprise or a foreign political organisation.
In addition to being limited to certain kinds of foreign principals, the exemption will also not apply to the employment or activities of former Cabinet Ministers, Ministers, members of Parliament or senior Commonwealth officials.
A number of submitters and witnesses at public hearings expressed significant concern about the breadth and application of news and media communications included, and the limited scope of the proposed exemption.
A large group of media organisations, comprising 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, provided a joint submission to the inquiry (Joint Media Organisations submission). The submission made two key recommendations:
that the Bill be limited in its application to foreign governments, or businesses/individuals operating on behalf of foreign governments, and
that a broad exemption for media organisations be included.
Foxtel endorsed the submission from the Joint Media Organisations, further stating that a ‘broadly framed exemption’ would ‘not be inconsistent with the Government’s intention to ensure transparency of influence’. Similarly Network Ten supported the recommendation for a broad exemption.
While proposed subsections 13(3) and (4) provide that a broadcaster, carriage service provider or publisher does not engage in communications activity merely because they distribute or publish information via their services, media organisations expressed concern that they will not be able to rely upon this exception for many of their activities and arrangements.
The drafting of proposed section 13 and the Explanatory Memorandum make clear that a broadcaster or publisher would be required to register if they have an arrangement with a foreign principal to undertake communications activities for the purpose of political or governmental influence—as opposed to ‘merely’ publishing or distributing content.
The Joint Media Organisations suggested that the drafting did not appropriately take into account their standard business operations and sector arrangements. They commented:
the drafting of the exemptions is flawed, and appears to suggest a serious misunderstanding of both the nature of media organisations’ businesses and the chain of relationships which form in the business of content distribution. … Broadcasters in TV and radio and their digital counterparts may write and/or design advertisements at the request of advertisers, thereby exercising a modest level of control over the advertising content, ostensibly pushing it upside of the Bill’s exemptions.
Commercial Radio Australia (CRA) also noted that the Bill indicated a lack of understanding of the sector and so may incorrectly capture activities which are transparent business transactions:
… it is extremely common practice throughout the commercial radio industry for stations to write and produce advertisements directly for clients. In some regional stations, as many as 80 per cent of advertisements broadcast are written and produced by copywriters within the station. CRA’s concern is that the act of writing/producing/editing the advertisement—on the instruction of the foreign principal—may mean that the broadcaster is not able to rely on the exemption under section 13(3).
In a later supplementary submission the Joint Media Organisations submitted that ‘the Bill is fundamentally flawed and cannot be “fixed” through the current process’. The CRA contended that the Bill will encourage foreign companies to go to agencies for many services, severely damaging the income stream of domestic radio broadcasters.
The Department did not support a complete exemption for media organisations under the Scheme. It stated:
It is essential that there is transparency where communications activities are undertaken on behalf of a foreign principal for the purpose of political or governmental influence. This is especially important for communications activity targeting the public. Such activities can be very powerful in affecting the views and opinions of persons involved in Australia’s political and governmental processes, as well as influencing a person’s vote in a federal election or designated vote.
The FARA exemptions and the Bill’s proposed exemptions for news media are difficult to compare. The FARA exemption might operate more broadly as it applies to ‘bona fide news or journalistic activities, including the solicitation or acceptance of advertisements, subscriptions, or other compensation’, which may capture a broader range of activity than activity ‘solely, or solely for the purposes of, reporting news, presenting current affairs or expressing editorial content in news media’.
However, for the FARA exemption to be available, the news service must satisfy the proportion of local ownership or the citizenship of officers and directors. To qualify, the news service:
must be at least 80 per cent owned by citizens of the United States, and
its officers and directors, if any, are citizens of the United States, and
is not owned, directed, supervised, controlled, subsidised, or financed, and none of its policies are determined by any foreign principal.
If applied in Australia, the FARA exemption would not exempt Channel Ten from registration.
Application to social media platforms
In response to questions in writing from the Committee, the Department advised that the obligations apply regardless of the medium used to undertake activities on behalf of a foreign principal, in Australia, for the purpose of political or government influence.
‘Communications activity’ is defined to mean communication or distribution of information or material. The Department stated that this is intended to cover ‘all circumstances in which information or materials are disseminated, published, disbursed, shared or made available in any way’.
The Committee sought clarification from the Department regarding under what circumstances a social media platform could be required to register under the Scheme. Further, the Committee’s questions in writing asked whether a platform’s algorithms which target certain areas of the community with certain news coverage, would be sufficient to fall within the definition of undertaking activities on behalf of a foreign principal.
The Department provided the following answer:
The department’s view is that it is unlikely that algorithms would fall within the definition of ‘communications activity’ in section 13.
Commercial or business pursuits
Proposed section 29 of the Bill sets out two exemptions for certain commercial or business pursuits. The first is for the negotiation and conclusion of contracts for the provision of goods and services, and the second is for the commercial or business pursuits of entities operating under the name of the foreign principal, or as employees of a foreign principal.
Both are examined below.
Proposed subsection 29(1) will exempt activities that are solely, or solely for the purposes of, the pursuit of bona fide business or commercial interests in relation to preparing to negotiate, negotiating, or concluding, a contract for the provision of goods and services.
The exemption will only apply to business or commercial negotiations on behalf of foreign businesses or a foreign individual. In effect, any registrable activities that involve commercial or business negotiations on behalf of a foreign government, foreign political organisation or a foreign public enterprise would still be liable to register under the Scheme.
The exemption is further limited in that it will not apply if the business or commercial negotiations in any way relate to national security, defence, or public infrastructure (within the meaning of Division 82 of the Criminal Code). The Bill does not define ‘national security’ or ‘defence,’ though the Explanatory Memorandum provides that the terms are intended to take their ordinary meanings. The rationale for providing this limitation to the exemption is that,
… it is appropriate that any foreign involvement in these areas is transparent. There is a public interest in knowing when foreign businesses or individuals are involved in contract negotiations relating to national security, defence or public infrastructure, and as such persons acting on behalf of such foreign principals should not be able to take advantage of the exemption.
AFMA advised that the exemption is very limited and is ‘of no assistance in moderating the [Bill’s] impact’, as the public policy advocacy that AFMA undertakes as an industry association never relates to the negotiation of a particular contract. This concern was shared by a number of representative and industry associations, and will be examined in a later section of this chapter.
The FARA also contains an exemption for commercial or business pursuits, though it is arguably broader in scope. That exemption applies to any activity to further bona fide trade or commerce (is not restricted to a specific contract) and does not include the restrictions proposed in the Bill in relation to national security, defence and public infrastructure.
However, the FARA exemption is limited to ‘private and non‑political activities’. As a result, the Bill’s proposed exemption captures a broader range of registrable activities though this will only apply in the narrow context of preparing to negotiate negotiating, or concluding a contract for the provision of goods or services.
Commercial or business pursuits of employees or subsidiaries
Proposed subsection 29(2) will exempt commercial or business pursuits undertaken on behalf of a foreign public enterprise or a foreign business where:
they are undertaken by an individual in his or her capacity as an employee of the foreign principal, or
they are undertaken by the person under the name of the foreign principal.
The term ‘commercial or business pursuit’ is not defined in the Bill, though the Explanatory Memorandum states that the phrase is intended to be given its ordinary meaning to include activities relating to trade, commerce, buying, selling, dealing and marketing.
The exemption will only apply to activities undertaken on behalf of foreign public enterprises and foreign businesses. It will not apply for activities undertaken on behalf of foreign governments, foreign political organisations or foreign individuals.
Certain categories of persons are not able to access certain exemptions under the Bill. For example, proposed section 27 provides that the religious exemption does not extend to recent Cabinet Ministers or recent Ministers, members of Parliament and other holders of senior Commonwealth positions. However, the business and commerce exemption is available to all categories of persons. For example, a former recent Cabinet Minister, Minister, member of Parliament, or senior Commonwealth public official will be exempt from registration for activities undertaken on behalf of foreign businesses where they are employees of that business.
The Explanatory Memorandum provides that actions of subsidiaries or companies operating under the same business name as the foreign principal were described as being ‘sufficiently transparent,’ such that registration under the Scheme would not be justifiable.
The FARA exemption for private and non‑political activities in furtherance of bona fide trad or commerce of a foreign principle as discussed in the preceding section is also available to employees or companies operating under the same business name of the foreign principal.
Representative and industry associations
Neither the Bill nor the Explanatory Memorandum explicitly addresses how the Bill is intended to apply, if at all, to representative or industry associations that act in the interests of members (any or all of whom may be foreign principals).
The proposed Scheme would require separate registration in respect of each separate foreign principal on whose behalf a registrable activity is undertaken. In circumstances where a representative or industry association represents tens, hundreds and potentially thousands of members—some of whom may fall within the proposed definition of ‘foreign principal’—the question arises as to whether hundreds or thousands of individual registrations could or should be required under the Bill.
A number of submitters and witnesses expressed concern about the potential application of the Bill to representative associations. It was noted that extending registration obligations to such associations seemed beyond the policy intent of the proposed Scheme.
AFMA submitted that the Bill appeared to have been drafted with a ‘simple bilateral relationship in mind’ between a lobbyist and a foreign principal and simple one off instances of communication. AFMA went on to note that public policy advocacy by industry member organisation is very different, undertaken on behalf of members, representing a diverse range of member views. Of its existing membership (103 organisations), AFMA advised that approximately 25 firms would meet the definition of a ‘foreign principal’. The Association would be required to register for each separate foreign principal on whose behalf it acted.
The Financial Services Council endorsed the position of the AFMA and also submitted that, as an industry body, they do not act on behalf of any individual member, but on behalf of the collective interests of the entire membership. They put forward the view that requiring industry bodies to register would not achieve the policy objectives of transparency because there is already transparency and regulation around their activities.
The Australian Industry Group also objected to the proposition of being ‘categorised’ as a lobbyist if they undertake activities to further the interests of members, some of whom may be foreign principals.
In advocating for an additional exemption, a number of submissions pointed to the fact that not-for-profit associations or organisations constituted to represent the interests of their members are exempted from the Commonwealth Government’s Lobbying Code of Conduct. Both AFMA and the Property Council of Australia recommended that a similar exemption be included in the Bill that would ensure associations and membership bodies that act in the collective interests of their members would not be required to register under the Scheme.
In answers to questions on notice, a number of representative industry associations advised the Committee of the percentage of their membership which would fall within the definition of a ‘foreign principal’. They advised the following:
Australian Private Equity and Venture Capital Association advised 4 per cent of its membership (179 total members) may fall within the definition of a foreign principal;
Financial Services Council advised 42 per cent of its membership (47 total members) may fall within the definition of a foreign principal;
Australian Bankers’ Association advised 12.5 per cent of its membership (24 total members) may fall within the definition of a foreign principal;
Insurance Council of Australia was ‘unable to determine with certainty’ which of its members would fall within the definition of a foreign principal, as ‘it is not clear that a corporate entity under Australian law with a parent entity legally incorporated in a foreign country is intended to be treated as a foreign business’. The Council noted however that approximately 50 per cent of its members operate in Australia as an Australian branch office or Australian subsidiary of a foreign‑incorporated general insurer. The Insurance Council of Australia has 49 members.
The Department responded to the recommendation for an additional exemption for representative and industry associations, the Department stated:
The suggestion that has been made to exempt industry bodies would not support the transparency objectives of the scheme. An exemption for collective advocacy would allow the scheme to be too easily subverted and an organisation that actually represents foreign influences could avoid registration by also representing domestic industry views.
Universities, academics and research activities
The Bill does not provide an exemption for universities, academics, or research institutes. This is contrasted to the broad exemption for activities done in furtherance of bona fide scholastic, academic or scientific pursuits or of the fine arts under FARA.
The Committee received a number of submissions and evidence from witnesses expressing concern about the potential impact of the Bill on the higher education sector in Australia. Concerns included that the Bill:
has the potential to stifle innovation and academic research and compromise the ability of Australian universities to develop a philanthropic culture;
could severely limit Australian academics in their capacity to carry out essential and mandated activities, or provide expert advice in the public domain in response to legitimate public interest, and
may lead to unwelcome and unwanted impediments to scholarly collaboration and exchange.
A number of submissions highlighted that international funding and collaboration is a vital and increasingly successful research model across a diverse range of fields, enabling Australian researchers and innovators access to facilities and expertise not available in Australia. This research was described as injecting funds into the Australian economy, as well as enhancing the quality of life in Australia. Universities Australia submitted:
International engagement and collaboration is not an optional extra in higher education and research. World-leading teaching relies on strong links with regional and global partners, ensuring that Australian universities provide both Australian and international students with globally-relevant skills and knowledge.
As noted in Chapter 3, specific concerns were raised about the inclusion of the terms ‘in collaboration with’ and ‘with funding or supervision’ by a foreign principal in the proposed definition of ‘on behalf of’ at section 11 of the Bill. These terms were described as being the primary way through which universities and the research sector may be subject to the proposed registration requirements under the Bill.
Universities Australia recommended that the Bill be amended to exempt activities that are predominantly academic or scholastic in nature, while the Group of Eight recommended the Bill exempt activities done for ‘academic purposes.’ The Group of Eight recommended that ‘academic purposes’ be defined consistent with the proposed definition in the Electoral Legislation Amendment (Electoral Funding and Disclosure Reform) Bill 2017, which is:
The bona fide publication or communication of:
(b) an opinion
(c) a comment, or
(d) other activities
in the context of a discipline in which the author has recognised expertise, or where the activity is undertaken in the fulfilment of a legitimate university purpose.
The Australian Institute of International Affairs also supported a general exemption for activities that are ‘predominantly academic or scholastic in nature’.
Similarly, the Australian Academy of Science expressed the view that ‘without clearer exemptions the draft legislation would negatively impact on the conduct of research and on business innovation that relies on science and research’. The Academy stated that science is,
international in nature. International collaboration—at an individual or institutional level, or with international agencies—is standard practice among scientists, and are critical for a small country such as Australia to access and benefit from knowledge generated by much larger programs of research around the world. International networks provide vital knowledge sharing, data, access to international scientific infrastructure, professional development, and research support. It is simply not possible to conduct scientific research in the modern era without an element of international collaboration.
To address these concerns, the Australian Academy of Science recommended specific exemptions for:
academic, scientific, scholarly and research activities;
provision of scientific evidence for the purpose of informing public policy, and
legitimate advocacy on behalf of visiting academics, international students and other groups, such as temporary workers.
Universities Australia also noted that the 350 000 international students in attending Australian universities would meet the definition of a ‘foreign principal’. The organisation noted that if a university was to make representation to government on their behalf, this could potentially become registrable conduct.
As a result, Universities Australia recommended that ‘legitimate advocacy on behalf of international students and other vulnerable groups (such as temporary workers) be exempted’. Professor Anne McLaren also recommended that the Bill exempt assistance provided by universities that relates to the well‑being of students, some of whom may be foreign principals (as foreign individuals) for the purposes of the proposed Scheme.
In contrast to recommendations for a blanket exemption for the education sector, Professor McLaren submitted that Australia’s higher education sector should only be given a limited exemption. Professor McLaren stressed the importance of avoiding ‘the perception that participants [the education sector] could potentially be suborned by funds or resources from foreign principals, or could be subject to pressure or intimidation by foreign players’.
Professor McLaren submitted that an exemption should apply for activities that:
are solely, or solely for the purposes of, the pursuit of bona fide academic collaboration; and
are within the scope of regular academic exchange; and
involve the use of internal research funding; and
do not involve the acceptance of foreign funds or resources for the establishment of centres or institutes, the provision of infrastructure, and the payment of salaries for academic or executive appointments.
The Department noted that they had considered the concerns about the application of the scheme to academic activities, stating:
Receipt of funding from foreign sources will not in and of itself be sufficient to trigger a registration requirement under the scheme. The scheme is not intended to capture bona fide or genuine academic pursuits undertaken in collaboration with foreign principals for academic purposes that are not for political influence.
Responding to stakeholder’s recommendations for a broad exemption for bona fide scholastic, academic, or scientific pursuits, the Department was of the view that such an exemption ‘is not appropriate in the Australian context’. It explained:
Registration by academics and scholars, if undertaking registrable activities on behalf of a foreign principal for the purpose of political or governmental influence, would provide useful information to decision-makers and the public about the influences behind the positions being advanced by the academics or scholars in relation to a particular decision or process.
Arts and cultural activities
The Bill does not provide an exemption for certain arts or cultural activities. As noted above, this is contrasted to the broad exemption for such activities done in furtherance of the fine arts under FARA.
The Committee received submissions from the Australian Major Performing Arts Group (AMPAG) and the Chamber of Arts and Culture Western Australia. Both submissions expressed concern regarding the application of the Bill to collaborations with foreign counterparts. AMPAG reasoned:
The Bill potentially ensnares many federally funded arts organisations who develop international partnerships to contribute to Australia’s artists vibrancy, international cultural exchange and diplomacy. … [The] Bill in its current form, will require every arts organisation in receipt of federal funding and engaged in international activities of any sort, to register and keep up to date every foreign principal along with details on the nature of that engagement in accordance with the Bill.
The Chamber of Arts and Culture Western Australia provided similar commentary, and explained how the Bill would capture such activities:
The activities of Western Australian arts companies who collaborate with foreign arts companies or individuals (some of whom are also subsidised by their own government) under this Bill would, we believe, be considered as engaging in activities ‘for the purpose of political or governmental influence’. This is because Section 12 of the Bill defines activities for the purpose of political or governmental influence to include an activity that influences, directly or indirectly, any aspect (including the outcome) of, among other listed areas:
1(b) a process in relation to a federal government decision;
And this is further clarified:
A federal government decision includes:
3(d) Commonwealth entity (within the meaning of the Public Governance, Performance and Accountability Act 2013) or a subsidiary of a Commonwealth entity (within the meaning of that Act).
Both organisations recommended an additional exemption to ensure arts and related cultural activities are excluded from the Scheme. The Chamber of Arts and Culture, Western Australia argued that ‘none of these activities are remotely connected to the hidden political influences that the Bill sets out to capture’.
Application of exemptions to ‘arrangements’
The Bill provides that a person is liable to register if they undertake activities on behalf of a foreign principal, or enters into registrable arrangements with a foreign principal. This would require a person to register under the Scheme where there is an agreement between the person and a foreign principal to undertake certain activities, but where those activities are not yet performed.
The Office of the Australian Small Business and Family Enterprise Ombudsman noted that the proposed exemptions included in the Bill apply only to activities, and therefore would not be available to those persons who have arrangements but are yet to undertake activities. The Ombudsman recommended the extension of the exemptions to liable arrangements, or that the matter be clarified in the Explanatory Memorandum.
In response to questions in writing from the Committee on this issue, the Department advised that the exemptions will apply ‘regardless of whether a person has a registrable arrangement with a foreign principal or undertake registrable activities on behalf of a foreign principal’. The Department sought to explain this interpretation:
Consistent with section 18, a person is liable to register if the person enters a registrable arrangement with a foreign principal. A registrable arrangement is defined in section 10 to mean an arrangement between a person and a foreign principal for the person to undertake an activity that, if undertaken by the person, would be registrable in relation to the foreign principal. Therefore, an arrangement to undertake registrable activities enlivens the requirement to register for activities listed in sections 20, 21, 22 and 23 and the exemptions in Division 4.
The Committee notes the following issues were raised regarding the availability of exemptions to the Scheme:
the limited availability of the proposed humanitarian exemption such that only activities which solely relate to humanitarian assistance would be exempt, noting that often such assistance is provided to address other matters such as gender inequality;
that the humanitarian exemption would only be available to respond to actual crises, conflict or civil unrest, despite that such assistance is often provided to avoid such cries;
charities would be largely captured under the Scheme despite existing regulation under the Charities Act 2013 that prevents registered charities from engaging in certain political activities;
recommendations for an additional exemption to be provided that would exempt charities that are registered with the Australian Charities and Not‑for‑profit Commission from the Scheme;
the narrow scope of the legal representation exemption to apply to representation in judicial, criminal or civil law enforcement inquiries, investigations or proceedings, and recommendations to exempt all legal representation on behalf of foreign principals;
extending exemptions to other professions such as tax agents, medical professionals, or excluding from the definition of ‘lobby’ representations made in the normal course of professional services;
whether consideration should be given to extend the diplomatic, consular and missions officers to other international organisations to which Australia is a member;
concerns regarding the availability of the religious activities exemption should the heads of religion be captured by the definition of a foreign principal (whether that be a foreign government or an individual who is neither a citizen nor a permanent resident);
the availability of the new media exemption particularly to broadcasters and the producers of content;
the application of the Scheme to content distributed on social media platforms;
the availability of the commercial or business pursuits exemptions and concerns that representative and industry associations would be required to register for each foreign principal;
the application to universities, academics and research activities and recommendations for a broad exemption to that sector to enable international collaborations and representations on behalf of foreign students (as foreign principals), and
the ambiguity of the availability of the exemptions to registrable arrangements with foreign principals (prior to activities being undertaken).
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.