This chapter considers the oversight and review measures set out in the Foreign Influence Transparency Scheme Bill 2017 (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.
As discussed in the previous chapters, the Bill proposes that the Secretary have broad powers to administer and enforce the Scheme. This includes broad power to request information of suspected persons who have failed to register, and any third party that may have information relevant to the operation of the Scheme.
While the Auditor-General will be able to audit the Scheme, the Bill does not provide for any standing oversight of the Secretary’s administration of the Scheme.
In questions from the Committee, the Department advised that the only other oversight mechanism it considered during the development of the Bill was the availability of judicial review. Decisions made by the Secretary under the Scheme will be subject to the usual operation of the Administrative Decisions (Judicial Review) Act 1977.
Annual report to Parliament
The Bill requires the Minister to present a report to the Parliament at the end of each financial year. The matters to be addressed in the annual report will be prescribed by rules.
In questions in writing to the Department, the Committee sought clarification as to what matters would be included in the Minister’s Annual Report to the Parliament. The Department advised that, while not being prescriptive of what matters might be included, the following could be addressed:
the total numbers of persons registered, foreign principals and their country of origin and the nature of activities engaged in on behalf of foreign principals;
the total numbers of persons who ended their registration in the previous 12 months;
if applicable, any additional reporting in relation to a voting period within the previous 12 months;
the total number of times the Secretary exercised his/her powers to obtain information and documents under section 45 (Notice requiring information to satisfy Secretary whether a person is liable to register under the scheme) and section 46 (Notice requirement information relevant to the scheme); and
any activities undertaken by the administering unit to educate on and encourage compliance with the registrant obligations under the Scheme (such as public awareness activities, production of educational materials).
The Department advised that the ability for matters to be prescribed by the rules ‘allows flexibility in determining what should be contained in the report once operational arrangements to support the administration of the scheme have been established’.
Mirroring the limitations placed on publishing information on the public Register, the Bill prevents the report from containing any information that the Secretary determines is ‘commercially sensitive’ or affects ‘national security’.
The term ‘commercially sensitive’ is not defined in the Bill. The Explanatory Memorandum indicates that it is intended to cover information such as details that are contained in commercial contracts, where if that detail was revealed it would cause detriment to the parties, or would expose sensitive information relating to a company’s operations, expenditure or employees.
Similarly, the term ‘national security’ is not defined in the Bill. The Explanatory Memorandum states that ‘national security’ may cover information relating to the protection of Australia and its people from harm from threats such as espionage, foreign interference, politically motivated violence or the promotion of communal violence. It may also cover information that relates to defence or the protection of the integrity of Australia’s borders or information relating to activities by security and law enforcement agencies.
However, both terms ‘are intended to operate flexibly as matters that may relate to national security change over time’.
In a submission, Mr Peter Jennings commented on the paucity of public information about foreign influence, and the more targeted subset of foreign interference in Australia. Mr Jennings was of the view that this could be addressed by way of an annual report to the Parliament on the state of efforts to counter espionage, sabotage and foreign interference.
The Committee put Mr Jennings’ proposal to the Department and whether such information could be provided in the Minister’s annual report. It responded with the following answer:
Section 69 provides that the Annual Report is to contain information on the operation of the Scheme. While the matters to be addressed in the Annual Report will be prescribed by rules, it is intended that these be limited to administrative matters. Discussion of the state of counter-foreign interference efforts in Australia would be beyond the scope of the Annual Report.
The Bill proposes a review of the Scheme within five years of the commencement of the Scheme. The Bill does not specify the person or body that will undertake the review though it requires the Minister to table the report within 15 sitting days after receiving it.
The Explanatory Memorandum states that a review will ensure that ‘the scheme is operating as intended, is not creating any unintended consequences, and strikes an appropriate balance between transparency and regulatory burden’. It also provides that the time period is intentionally flexible, such that ‘if practical issues are identified early in the life of the scheme, the formal review could be undertaken after 12 months’.
The Bill does not specify who is to undertake the review, and therefore it could be the administering department undertaking the review.
In questions in writing to the Department, the Committee sought clarification whether it is intended that an independent person be appointed to undertake the review. The Department provided the following answer:
The Bill is not prescriptive as to who should undertake the Review under section 70 – this will be a matter for Government to determine at the time it commissions the Review.
The Committee notes the following issues were raised regarding the Bill’s oversight and review:
as drafted, the Bill limits oversight to the Australian National Audit Office and judicial review under the Administrative Decisions (Judicial Review) Act 1977;
an annual report to the Parliament will be presented by the Minister each financial year, though matters covered in the report will be prescribed in rules and are not provided in the primary legislation;
an annual report to Parliament would be limited to administrative matters, and not the state of efforts to counter espionage, sabotage and foreign interference;
a review will be undertaken within five years, though it will be a matter for Government as to who undertakes that review.
A number of these concerns may be 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.