Preceding chapters of this report examined the circumstances in which a person would be liable to register under the Foreign Influence Transparency Scheme (the Scheme). This chapter will examine obligations once liability exists and how the Scheme will operate and be administered by the Secretary.
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.
Registration and responsibilities
The process of registration
A person would become liable in relation to a foreign principal if the person,
undertakes an activity on behalf of a foreign principal that is registrable in relation to the foreign principal, or
enters a registrable arrangement with a foreign principal (an arrangement to undertake an activity that would be registrable).
The onus is on the person to determine whether or not the activity or arrangement is being undertaken for the purpose of political or governmental influence.
The Committee questioned whether the Department would develop and publish guidance on its website, or provide advice through other means, so that potential registrants could be more aware of their obligations. Further, the Committee asked whether this information would be available prior to the date at which the Scheme was operational.
The Department provided the following response:
Upon passage of the Bill, the department will develop guidance material and an education and outreach program. Guidance material will be available online. The Department also intends to provide support to persons who are unsure if they need to register under the Scheme. The Bill provides that the Scheme will commence on a date to be proclaimed within twelve months of the Act receiving Royal Assent (section 2). This is to allow sufficient time to establish the administrative and other arrangements that will support the operation of the Scheme. It is intended that guidance materials would be uploaded onto the department’s website during this time. Education and outreach activities would also occur during this time.
A person must apply to the Secretary no later than 14 days after becoming liable to register.
A person would be liable to register for each foreign principal with whom they have a registrable arrangement or on whose behalf they undertake registrable activities. The Explanatory Memorandum provides the following example:
If a person undertakes registrable activities on behalf of foreign principal X on 1 January 2020, that person must apply for registration in relation to foreign principal X by 15 January 2020. However, if the same person also undertakes registrable activities on behalf of foreign principal Y on 10 January 2020, they must also complete a separate application for registration in relation to foreign principal Y by 25 January 2020.
Applications for registration must be in writing and accompanied by any information or documents required by the Secretary. The Bill does not specify what information would be required for registration, for example: the person’s name, the foreign principal’s name, the nature of activities, or any other information. It is understood these matters will be prescribed in regulations.
In response to questions from the Committee, the Attorney‑General’s Department (the Department) advised that the information that a registrant ‘is likely to be required to provide’ includes the following:
the name of the person and general details (address, occupation, citizenship status and any prior government employment, including position and term of employment);
the name of the foreign principal and general details (contact details, nationality, type of foreign principal and general description of business/activities);
high level details of the nature of the relationship between the registrant and the foreign principal (for example, whether there is a contract in place, an informal agreement or otherwise) and whether the person has received / is receiving financial benefits from the foreign principal, and
issues of interest which the registrant intends to pursue on behalf of the foreign principal (such as environmental issues, defence contracts, a particular vote or policy).
A registration fee will apply to new registrations and annual renewal of registration. The Bill does not specify a registration fee amount, rather this will be provided in regulations.
Foreign Influence Transparency Scheme (Charges Imposition) Bill 2017 (the Charges Imposition Bill) was introduced by the Prime Minister on the same day as the present Bill. The Charges Imposition Bill proposes that the amount will be prescribed by regulation, which may do any or all of the following:
prescribe an amount or a method for working out an amount;
prescribe different amounts or methods for different circumstances, or
prescribe a nil amount for prescribed circumstances.
In answers to questions in writing from the Committee, the Department advised that ‘a small fee will apply to the reporting requirement’ which it anticipates will be less than that charged for registration under the United States’ Foreign Agents Registration Act (FARA), (US$305 for the initial filing and for each mandatory‑supplemental statement). However, on another occasion, the Department advised the Committee that the fee applicable in the United States is US$610.
In another answer to question in writing, the Department advised that ‘fees will be charged for initial registration and annual renewal of registration, not in relation to keeping records’.
A person will be registered from the day a valid application is given to the Secretary.
Once registered, a registrant will be required to give the Secretary notice:
if there is a material change in the person’s circumstances (such as starting to undertake another kind of registrable activity) within 14 days of the change;
if the person undertakes ‘donor activity’ on behalf of a foreign principal for the purpose of political or governmental influence, and the total value of the money or things of value disbursed during that activity reaches the ‘electoral donations threshold’ within 14 days of the activity;
confirming or updating the person’s registration if a voting period begins for a federal election (other than a by-election) or for a designated vote within 14 days of the issuing of the writs, and
if the person undertakes certain activities on behalf of a foreign principal at any time during the voting period for a federal election (other than a by-election) or for a designated vote, where the activity relates to that election or vote. Such a notice will be required within seven days of the activity.
A registrant will be required to make a disclosure if the person undertakes communications activity on behalf of a foreign principal for the purpose of political or governmental influence. Regulations will provide that the rules may prescribe instances of communications activity, when and how disclosures are to be made, the content, form and manner of disclosures, and circumstances in which a person is exempt from making a disclosure.
Registrants will be required to either renew their registration each year or give the Secretary a notice advising of end of liability to register before the end of the renewal period each year.
As noted above, a fee will be charged for renewal of registration.
Registrants will be required to keep records of particular matters, including registrable activities and information or material forming communications activity, while registered under the Scheme and for five years afterwards.
The following records must be kept for that period:
registrable activities that a person undertakes on behalf of a foreign principal;
benefits provided to the registrant by the foreign principal;
information or material forming part of any communications activity that is registrable in relation to the foreign principal;
any registrable arrangement between the person and the foreign principal, and
any other information or material communicated or distributed in Australia on behalf of the foreign principal.
The Bill proposes a number of offences for conduct in relation to records. This is discussed further in Chapter 7.
The Explanatory Memorandum states that the recording keeping obligation,
… supports the transparency objectives of the scheme by ensuring that current and accurate information is maintained in relation to arrangements or activities undertaken on behalf of foreign principals.
Further, it provides that the requirement to maintain records for a five‑year period following the end of registration is ‘intended to ensure that any investigations or prosecutions under the scheme are not undermined’. The Explanatory Memorandum states:
Activities undertaken on behalf of a foreign principal within the last five years may also continue to have implications for decision-making and public policy in Australia. It is important that such records are not destroyed, and there is an ability for the Secretary or law enforcement to be able to request or obtain access to this information.
A person will cease to be liable to register where they have provided a notice to the Secretary to that effect, and where no registrable arrangement exists with a foreign principal. The notice to the Secretary must be in writing and accompanied by any documents required by the Secretary.
A large number of organisations expressed significant concerns regarding the administrative burden on registrants proposed by the Bill. Broadly, these concerns were in regards to:
initial process of registration (scope of information that might be required to register, and the imposition of registration fees and annual renewals);
ongoing reporting obligations (exposure of sensitive information and potential frequency of updates to material changes), and ongoing record keeping obligations (capturing a vast array of information and communications);
absence of a publicly-available Regulatory Impact Statement, and
duplication of existing regulation under the Lobbying Code of Conduct and Register of Lobbyists.
Each of these concerns is addressed below.
Concerns regarding initial registration
As noted above, the Bill does not specify what information will be required of liable persons upon registration. It is understood these matters will be prescribed in regulations. In the absence of a list of required information contained in the primary legislation, Law Firms Australia was concerned that the obligation to provide information at registration ‘is potentially a very burdensome provision’.
Concerns were also raised regarding the imposition of registration fees. The Salvation Army and Justice Connect recommended that charities—where they would not qualify for an exemption—be exempt from the imposition of registration fees. Justice Connect noted that ‘increased regulation and compliance costs mean less time and money spent on achieving purpose—which brings with it reduced benefit to the public’.
In questions in writing, the Committee proposed such an exemption for charitable and not‑for‑profit organisations. The Department provided the following answer:
All registrants will be liable to pay a fee for initial registration and renewal of registration under the Foreign Influence Transparency Scheme (Charges Imposition) Bill 2017, but there is flexibility in relation to the amount of charges payable under the Scheme. … The regulations [may] prescribe a nil amount in certain circumstances allows for flexibility in a situation where there are special circumstances, or where it is otherwise not appropriate to charge under the Scheme for a certain activity.
Ongoing reporting and record keeping obligations
The ongoing reporting and record keeping obligations proposed in the Bill attracted significant criticisms by a large number of stakeholders. For example, the Australian Professional Government Relations Association (APGRA) described these obligations as ‘highly burdensome’.
Law Firms Australia described the reporting obligations as ‘particularly onerous’ for law firms, explaining changes to costs agreements can be a ‘regular occurrence’ and the Bill would require reporting of all increases in estimates and cost agreements. It questioned how providing such information ‘increases transparency with respect to foreign influence on governmental, parliamentary or political affairs’. The organisations noted that reporting ‘should only be as great as to ensure that information necessary to reveal covert foreign influence is provided’.
Foxtel also expressed concern regarding proposed obligations to report on registrable ‘communications activities’, noting that the burden would also in effect, apply to the state-owned channels providing the broadcaster with content. Foxtel was of the view that reporting obligations were so vast that they would have commercial and supply implications:
Given the sheer volume of content on the Foxtel platforms, Foxtel cannot monitor each program put to air on supplied channels, nor do we have the expertise in international relations to recognise where an attempt at influence may be occurring. … Even were Foxtel to request the state owned channels notify us of content and the intentions behind it, it is likely the channels would deem this to be so burdensome as to call into question the worth of supplying the channels into Australia. Foxtel may also come to the same conclusion, given the uncertainties in the Bill, the burdensome compliance requirements and the substantial consequences of breach (which are strict liability provisions).
A number of stakeholders also expressed specific concern about the record keeping obligations. For example, the Australian Financial Markets Association (AFMA) was of the view that the Bill would require detailed record keeping of telephone calls, in person conversations and other ephemeral communications, even where initiated by a government official. AFMA continued, noting the relevant offence and the costs of compliance:
Many if not all of our activities are captured by the concept of acting on behalf of a foreign business and will be the subject of national security surveillance. Failure to meet the record keeping requirement is subject to a strict liability offence with a penalty of $12,600. … AFMA will need to look at acquiring a costly … information management system of the type that would not normally be needed or warranted by the scale of a small not-for-profit organisation with minimal resources.
At a public hearing, AFMA expanded on its concerns noting that as a professional industry body, it acts on ‘an ongoing basis over many years’ for the same organisations, some of whom would be foreign principals. The Association was of the view that the record keeping obligations in such relationships would amount to a ‘semi-perpetual record-keeping obligation under this legislation’. AFMA questioned whether the record‑keeping to the level required in the Bill was necessary to achieve the Bill’s transparency objective.
The Committee questioned whether the Department had considered the impact of the Bill’s proposed record keeping obligations on business and particularly, the not‑for‑profit sector. The Department submitted:
The existence of adequate records is essential to the effective administration of the Scheme and will allow for appropriate investigations into potential non-compliance with the Scheme. To achieve the transparency objectives of the Scheme, certain information relating to a person’s registration must be collected.
The Department was of the view that the record keeping obligations ‘strike an appropriate balance between the impact on business and the need for records to be kept to uphold the effective administration’ of the Scheme. The Department indicated that it would develop guidance materials to assist registrants identify the types of records they will need to keep for the purposes of the Scheme, prior to the Scheme’s commencement.
While a large number of stakeholders expressed concerns at what they saw as a significant and ongoing regulatory burden arising from their day‑to‑day activities, the Department described the Bill as imposing a ‘small regulatory burden’. It further advised:
The scheme has been designed, to the extent compatible with the transparency objectives, to minimise the burden on registrants, requiring limited information upfront coupled with the power to seek supplementary information in the event that it is required.
Regulatory Impact Statement
Regulatory Impact Statements (RIS) set out matters including how many individuals and organisations are expected to be impacted by a regulatory scheme and the estimated costs for them of complying with that regulation. Contrary to regular practice, a RIS has not been published on the Bill.
WWF-Australia recommended that a detailed RIS be completed, stating ‘the full impact and compliance costs of any changes can then be properly assessed and considered, and charities can be properly excluded from any amendments which should not apply to them’. The Australian Charities and Not‑for‑Profit Commission made a similar recommendation.
The Committee sought clarification from the Department as to why a RIS was not included in the Explanatory Memorandum. The Department submitted the following answer:
The regulatory impacts of the Scheme were carefully considered by the Government when determining the scope of the Scheme.
Interaction with the existing regulation
Some stakeholders clarified the apparent duplication with the existing Lobbying Code of Conduct (the Code) and associated Register of Lobbyists (Lobbyist Register) as administered by the Department of the Prime Minister and Cabinet.
For example, AFMA was concerned that the Scheme’s interaction with the existing Code and Lobbyist Register is not clear:
Why is it administratively efficient to run two parallel registers which have the same objective of providing transparency in public administration? It is also very confusing to the public unfamiliar with the Australian Government’s complex organisation to have to search on two different registers. This increases opacity rather than transparency to the public.
Similarly, the APGRA was of the view that ‘the Scheme duplicates many of the requirements already set out in the Australian Government’s Lobbying Code of Conduct and associated Register’.
The Code and Lobbyist Register was introduced in 2008 to ensure ‘that contact between lobbyists and Commonwealth Government representatives is conducted in accordance with public expectations of transparency, integrity and honesty’.
The Lobbyist Register contains the following information about lobbyists who make representations to Government on behalf of their third-party clients:
the business registration details and trading names of each lobbying entity including, where the business is not a publicly listed company, the names of owners, partners or major shareholders, as applicable;
the names and positions of persons employed, contracted or otherwise engaged by the lobbying entity to carry out lobbying activities, and
the names of clients on whose behalf the lobbying entity conducts lobbying activities.
In February 2018, the Australian National Audit Office (ANAO) tabled a performance audit of the management of the Register of Lobbyists in the Parliament. The audit found while the administration of the Code and Lobbyist Register by the Department of the Prime Minister and Cabinet is consistent with the framework agreed by Government, ‘improvements could be made to communications, compliance management and evaluation’. Specifically, the ANAO concluded that:
the effectiveness of the department’s compliance monitoring approach has been reduced by:
the lack of strategy around advice to Government representatives of their compliance monitoring responsibilities,
reliance on reports of non-compliance to drive compliance activities, and
the approach adopted to manage compliance has not been informed by an assessment of risks.
APGRA was of the view that extending the proposed Scheme to those persons already registered under the Code ‘would expand this compliance burden considerably and for minimal and questionable benefit’. Similarly, AFMA recommended that the two schemes be rationalised into a single body.
Seeking to address these concerns, the Department noted that the Code does not have a legislative basis and as a result, is not supported by enforcement measures. It stated:
The scheme is intended to complement the Commonwealth lobbying code of conduct and to impose more stringent requirements and stronger enforcement options to reflect the need for greater transparency in relation to foreign influence as opposed to domestic influence.
Power to publish or withhold publication of information
The Secretary will be required to keep a register that includes certain information and documents relating to a person or organisation’s registration in relation to each foreign principal for whom they act on behalf of. This register is not publicly available.
The Secretary will be required to publish certain information online for public access, including:
the name of each person registered and the name of the foreign principal;
a description of the kind of registrable activities the person undertakes on behalf of the foreign principal, and
any other information prescribed by the rules.
The Bill does not require the Secretary to publish information within a certain timeframe. This is in contrast to registrant’s obligations to provide information within certain timeframes, particularly during voting periods.
In response to questions from the Committee, the Department stated that it is ‘intended that information collected … is placed on the public website as soon as practicable’. The Department informed the Committee that it would ‘defeat the purpose of the Scheme for there to be extended delay in providing visibility as to the level and extent of foreign influence in Australian political and governmental processes’.
The Department was also confident that ‘to the extent possible, the unit will be resourced to ensure timely publishing of information online’. It indicated that it will ‘work flexibly to ensure that any additional resources are available in times of peak activity, including during election periods’.
The Secretary will not be required to make information publicly available if he or she is satisfied that it is commercially sensitive, affects national security or is of a kind prescribed by the rules. The rules may also prescribe circumstances in which the Secretary is to remove publicly available information from the website.
The Committee sought clarification from the Department regarding the matters that the Secretary would consider before making a decision to publish or not publish content on the public register. The Department noted in its answer that the term ‘commercially sensitive’ is not defined in the Bill, and therefore, the Secretary,
… could consider whether, if particular information was revealed, it would cause detriment to the parties or expose sensitive information relating to a company’s operations, expenditure or employees. If a document is marked ‘commercially sensitive’, but it is not clear to the Secretary that it falls within this category, he or she may seek further information from the registrant to satisfy himself or herself that the information is commercially sensitive.
Similarly, the Department stated that the term ‘national security’ is not defined in the Bill. The Department stated that on this matter, the Secretary,
… could consider matters relating to the protection of Australia and its people from threats and harm, including in relation to espionage, foreign interference, terrorism and political violence, as well as matters relating to the defence and protection of the integrity of Australia’s borders and information relating to the activities of security, intelligence and law enforcement agencies. The Secretary may seek further information from security, intelligence and/or law enforcement agencies in deciding whether the information relates to national security.
Powers to obtain information
The Bill proposes to grant the Secretary power to require the production of information in two circumstances:
if the Secretary reasonably suspects that a person is liable to register but has failed to do so, the Secretary may issue a written notice requiring the person to provide ‘any information that may satisfy the Secretary’ as to whether they are liable to register, and
if the Secretary reasonably believes that a person (whether or not a registrant) has information that is relevant to the operation of the Scheme.
The scope of what might be captured under the words ‘information that is relevant to the operation of the Scheme’ is not clear. The Explanatory Memorandum does not detail what information might be included within the term, and the Department did not provide further evidence.
It is likely that these words would be interpreted in line with the object of the Bill, that is to ‘improve the transparency’ of persons who undertake certain activities on behalf of foreign governments, foreign businesses and other foreign principals. As a result, the scope of information able to be requested by the Secretary could be very broad given the broad framing of the objective.
To issue such a notice, the Secretary must reasonably believe that the person has information or documents that are ‘relevant to the operation of the scheme’. The term ‘reasonably believes’ is not defined in the Bill. However the Explanatory Memorandum provides that this is ‘a higher standard than the ‘reasonable suspicion’ required under the proposed section 45, and the Secretary must believe that the person holds information or documents and this belief must be reasonable and have a rational basis.
The Explanatory Memorandum reasons that ‘it is appropriate for this higher standard to apply here because section 46 allows the Secretary to request information from any person, regardless of whether they have any connection to the foreign principal or a registrant’.
The written notice may prescribe a time period (no less than 14 days) and the manner and form of the information that is to be supplied. The Secretary must consider the costs of complying with the notice that would likely be incurred.
The Bill establishes that failing to comply with either notice is an offence and would attract a penalty of 6 months imprisonment for individuals, or $31 500 for bodies corporate. The Bill’s proposed enforcement mechanisms are discussed in Chapter 7.
A person is not excused from providing information requested by the Secretary on the basis that it may incriminate the person or expose them to penalty. In the case of an individual, information provided upon the request of the Secretary is not admissible in evidence against the individual in most criminal and civil proceedings.
However, this information can be used for proceedings for an offence of providing false or misleading information (either the offence in s 60 of the Bill, or against sections 137.1 and 137.2 of the Criminal Code).
The Explanatory Memorandum explains that the common law privilege against self-incrimination protects a natural person from complying with a requirement to disclose information ‘unless the privilege is expressly or impliedly overridden’. It states that overriding the privilege against self‑incrimination is ‘appropriate and supports the scheme’s objective of transparency’. Further, the Explanatory Memorandum provides,
… by collecting information on persons undertaking activities on behalf of foreign principals in Australia and making it available to government and the public … they are better able to understand and assess the actions of those registered, the foreign principals whose interests they are representing and the types of influence being bought to bear.
Power to share information
Scheme information may be shared with a broad range of government agencies and bodies outlined in the table below (Table 6.1). Additional persons and purposes for sharing information could be prescribed in rules.
The Bill does not specify matters that the Secretary must consider before sharing Scheme information.
Table 6.1 outlines when the Secretary may share information and with whom that information can be shared.
Table 6.1: Secretary’s powers to share information and with whom
An enforcement related activity of an ‘enforcement body’ within the meaning of the Privacy Act 988
The enforcement body
The protection of public revenue
Any of the following that has functions in relation to the purpose:
(a) a Department, agency or authority of the Commonwealth, a State or a Territory;
(b) an Australian police force.
The protection of security within the meaning of the Australian Security Intelligence Organisation 1979
Any of the following that has functions in relation to the purpose:
(a) a Department, agency or authority of the Commonwealth, a State or a Territory;
(b) an Australian police force
A purpose prescribed by the rules
A person prescribed by the rules
Source: Foreign Influence Transparency Scheme Bill, proposed sections 50-55
The first item listed in Table 6.1 provides for the sharing of scheme information for the purposes of an ‘enforcement related activity’ within the meaning of the Privacy Act 1988. Under that Act, ‘enforcement related activity’ means:
the prevention, detection, investigation, prosecution or punishment of:
breaches of a law imposing a penalty or sanction; or
the conduct of surveillance activities, intelligence gathering activities or monitoring activities; or
the conduct of protective or custodial activities; or
the enforcement of laws relating to the confiscation of the proceeds of crime; or
the protection of the public revenue; or
the prevention, detection, investigation or remedying of misconduct of a serious nature, or other conduct prescribed by the regulations, or
the preparation for, or conduct of, proceedings before any court or tribunal, or the implementation of court/tribunal orders.
When that purpose test is satisfied, the Secretary may share information with the following enforcement bodies as provided in the Privacy Act 1988:
the Australian Federal Police; or
the Integrity Commissioner; or
the Australian Crime Commission; or
the Immigration Department; or
the Australian Prudential Regulation Authority; or
the Australian Securities and Investments Commission; or
the Office of the Director of Public Prosecutions, or a similar body established under a law of a State or Territory; or
another agency, to the extent that it is responsible for administering, or performing a function under, a law that imposes a penalty or sanction or a prescribed law; or
another agency, to the extent that it is responsible for administering a law relating to the protection of the public revenue; or
a police force or service of a State or a Territory; or
the New South Wales Crime Commission; or
the Independent Commission Against Corruption of New South Wales; or
the Law Enforcement Conduct Commission of New South Wales; or
the Independent Broad-based Anti-corruption Commission of Victoria; or
the Crime and Corruption Commission of Queensland; or
the Corruption and Crime Commission of Western Australia; or
the Independent Commissioner Against Corruption of South Australia; or
another prescribed authority or body that is established under a law of a State or Territory to conduct criminal investigations or inquiries; or
a State or Territory authority, to the extent that it is responsible for administering, or performing a function under, a law that imposes a penalty or sanction or a prescribed law, or
a State or Territory authority, to the extent that it is responsible for administering a law relating to the protection of the public revenue.
Of note, is the inclusion of any another agency, to the extent that it is responsible for administering, or performing a function under, a law that imposes a penalty or sanction or a prescribed law. This will capture an even broader range of agencies at the Commonwealth and state and territory levels.
The Committee sought clarification from the Department as the Bill does not specify any matters that the Secretary must have regard to before sharing information. The Committee questioned whether regulations or guidance would be developed to regulate the Secretary’s decision. The Department provided the following answer:
The department anticipates consulting with the Information Commissioner and other relevant stakeholders in the development of rules under the Scheme, including in relation to the sharing of Scheme information. The department will also prepare information materials for internal use in determining when to share Scheme information.
The Secretary may delegate all or any of his or her functions or powers under the Scheme to a Senior Executive Service (SES) employee, acting SES employee or an acting Executive Level 2 or equivalent position in the department. The delegation power is not limited to certain decisions or administrative functions, meaning the decision to request information, withhold publication of information or share information with other agencies could be made by an acting Executive Level 2 officer.
At a public hearing, the Committee sought clarification from the Department about the delegation power. The Department advised:
Those powers that are being exercised are ones which might be in the nature of writing a letter, identifying and saying, ‘We notice … there are activities taking place and writes out to request information[‘]. That is the type of administrative function that is not uncommonly delegated to senior executive officers of a department who may exercise powers on behalf of a secretary to request certain information.
While some information requests may relate to more minor matters, the requested information could also relate to highly sensitive information—in some cases, privileged information—and this power may be delegated.
Few stakeholders engaged with the provisions relating to the Secretary’s powers to publish information, request more information or share information with other agencies. This may be reflective of stakeholders primarily raising issues about the scope and extent of the Bill, and that the breadth of the Bill may impede its objective and operation.
Ms Valerie Heath advised that ‘the effective operation of the transparency regime in large part depends on the exercise of essentially unreviewable discretions by the Secretary or his/her delegate’. Ms Heath further noted that ‘public understanding of the influence operations of foreign businesses is one of the key beneficial functions of the Bill and yet it could be substantially undercut’ by the Secretary’s power to withhold publication of information.
The Australian Information Commissioner noted that additional rules could be prescribed so as to allow the Secretary power to share Scheme information, including personal information, for a purpose and with such persons as prescribed in delegated legislation. In line with previous submissions to this Committee, the Australian Information Commissioner advocated that a Privacy Impact Assessment be undertaken.
The Department advised that it will undertake a Privacy Impact Assessment ‘prior to the commencement of the Scheme’, but did not commit to undertaking the assessment prior to the Bill’s passage through the Parliament.
The Commissioner also recommended that:
Where discretionary powers or rules could authorise collections, uses or disclosures of personal information that have an impact on individuals’ privacy, the mechanisms for future authorisations or requirements may more appropriately occur through primary legislation. Alternatively, it may be appropriate to include obligations in the primary legislation to ensure that privacy is given appropriate consideration in the development of those rules.
The Department responded to this proposal, advising the Committee that it ‘anticipates consulting with the Information Commissioner and relevant stakeholders in the development of rules under the Scheme’. The Department stated that consultation with the Office of the Australian Information Commissioner will occur in the implementation of the scheme and did not consider that it would not ordinarily be prescribed by legislation in this context.
Noting the volume of particularly sensitive and potentially highly political information that may be held under the Scheme, the Committee sought advice from the Department on options to assure independence. The Committee sought clarification from the Department as to any impediments to establishing an independent commissioner to administer and enforce the Scheme. The Department responded:
The department’s view is that it is appropriate for the Secretary of the Attorney-General’s Department to administer the Scheme. It is common for regulatory powers to be vested in a Secretary of a department. For example, the Secretary of the Department of Home Affairs has regulatory powers in relation to AusCheck which conducts background checking for Aviation and Maritime Security Identification Cards. Decisions made by the Secretary under the Scheme will be made in accordance with proper administrative decision making principles, including in relation to procedural fairness, and will be reviewable under the Administrative Decisions (Judicial Review) Act 1977.
Resourcing and administration of the Scheme
The resourcing and timely administration of the Scheme was also discussed by stakeholders. The Law Council noted the experience in the United States, where, in its view, a similar registration scheme under the Foreign Agents Registration Act has ‘produced questionable results’ due to its resourcing. The Council stated:
The experience in the United States confirms that a registration scheme aimed at bringing transparency to foreign influence will only be effective if the integrity and veracity of the register is maintained and adequate resources are allocated to its enforcement. Those issues identified with the overseas FARA regime suggests that there are significant challenges with ensuring that registrations are timely, accurate and ultimately achieving the aim of increased transparency.
The Government has allocated $3.2 million over four years to partially fund the Scheme costed on the basis of 500 registrations within the first year. This includes capital costs for a dedicated information technology system to store and manage initial registration and registration renewal applications, reports and other information collected under the Scheme, as well as expenditure for staffing.
The Committee notes the evidence presented in previous chapters that has indicated that the number of registrations might be significantly higher than the Department’s estimate. During this inquiry, a large number of stakeholders have detailed their organisational or business structures and activities, and indicated to this Committee that they are likely required to register.
The Committee has also received a submission advising that the Scheme’s costs have been underestimated. The Australian Financial Markets Association stated:
This is a simple average staffing level calculation for one senior executive with two support staff and allocation of office expenses over 4 years. It does not appear to take into account the capital cost of the IT build for the database and website development and then ongoing maintenance. Given the broad capture of registrable activities, compliance surveillance and enforcement, public education and the scale and sophistication of the IT database system that is needed to deliver the information, an annual budget of $800,000 is misleading.
The budget and staffing allocation within the United States Department of Justice for the administration and enforcement of the Foreign Agents Registration Act is unknown.
The Committee notes the following issues were raised regarding registration and ongoing responsibilities:
the Bill does not specify what information registrants will be required to provide;
the registration fees, annual renewal fee and reporting fee are not specified in the Bill, with some stakeholders recommending exemptions for charities and not‑for‑profit organisations from the imposition of charges;
ongoing reporting obligations may expose sensitive information and require frequent updates of immaterial changes;
ongoing record keeping obligations capture a vast array of information and communications, and will be costly for organisations to maintain for the required duration;
the absence of a publically-available RIS for persons to understand the impact of the registration requirements and ongoing responsibilities, and
the perceived duplication of existing regulation under the Lobbying Code of Conduct and Register of Lobbyists.
The Committee notes the following issues were raised regarding the proposed operation of the Scheme and the proposed powers of the Secretary:
the breadth of the Secretary’s powers to publish or withhold from publication information on the public register, and that the Bill does not provide much guidance on the matters to consider prior to such a decision;
that the Secretary is not obliged to publish Scheme information within a set period, particularly during election periods;
the Secretary’s powers to request information from third parties that is ‘relevant to the operation of the Scheme’, noting that the term is not defined within the Bill and may be interpreted broadly, capturing a wide array of conduct and persons;
the breadth of agencies with whom the Secretary can share Scheme information, most notably, any agency, to the extent that it is responsible for administering, or performing a function under, a law that imposes a penalty or sanction or a prescribed law;
the absence of a Privacy Impact Assessment to assess the engagement with registrants’ privacy rights and the information held by the Secretary;
that the collection, use or disclosure of personal information that has an impact on individuals’ privacy is more appropriately provided in primary legislation, rather than discretionary rules,
the appropriateness of the Secretary administering a Scheme which will manage highly‑sensitive information and decisions regarding its handling, or issuing a notice to request further sensitive information;
the ability for all of the Secretary’s powers to be delegated to an acting Executive Level 2 officer, and
the under-estimation of the number of registrations and potentially, the under‑resourcing of the administration of the Scheme, impacting on the integrity and veracity of the Scheme.
A number of these concerns are addressed by the Attorney General’s proposed amendments. The 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.