Schedule 2 of this Bill seeks to exempt the Future Fund from Freedom of Information (FOI) laws ‘in relation to documents in respect of the investment activities’ of the Future Fund.
The Explanatory Memorandum for the Bill claims this ‘partial exemption’ is so as to ‘reduce the risk of disclosing highly sensitive commercial and proprietary material’ given to the Future Fund by the private investment managers that it uses to make its investments.
The Explanatory Memorandum goes on to say that the current application of FOI laws to the Future Fund ‘presents the risk of negative impacts on investment outcomes, reduced access to investment opportunities and it could also prejudice investment managers in their dealing with other market participants’.
Apparently the application of Australia's FOI laws to the Future Fund are the weak link for global investment managers that might lead to market sensitive information being released and everyone losing their money.
Which, of course, is bunkum.
There is no risk of disclosing highly sensitive commercial and proprietary material, because Section 47 of the FOI Act as it stands provides government bodies with an exemption from the release of information that would have the effect of ‘disclosing trade secrets or commercially valuable information’.
Instead, during the inquiry hearing it was revealed that, rather than there being an actual risk of commercially sensitive information being released, there is simply a perceived risk held by some investment fund managers who are, most likely, completely unfamiliar with Australian FOI law:
Senator McKIM: You've been in existence for 15 years. You haven't yet had to disclose highly sensitive commercial and proprietary material information. The problem is that there are some investment managers who are saying that they're worried that FOI laws might lead to the disclosure of that kind of information, even though it has never happened because the laws actually exempt you from having to disclose it. Is that right?
Mr Price: That is correct.
That the Future Fund posted a record 22% growth for the 2021-22 Financial Year, following years of consistently high returns, demonstrates just how immaterial the minor fears of a handful of investment managers are.
Also revealed during the inquiry hearing was that Schedule 2 is not a partial exemption because, as confirmed by Department of Finance officials, the only core activity of the Future Fund is investment activities:
Senator McKIM: Does the Future Fund have any core activity other than its investment activities? Apart from investing money, what does it do?
Mr Williamson: Investments are its core activity.
Senator McKIM: Does it have any other core activities?
Mr Williamson: No.
Further, during the inquiry hearing it was confirmed that this FOI exemption would be so complete that it would cover the amount invested in any particular company:
Senator McKIM: I'm specifically asking you to confirm that, if this bill were passed, documents in respect of the fund's investment activities would be exempt from the FOI Act, and I think you have agreed with that proposition.
Mr Dilley: That's correct: documents in relation to investment activities would be exempted under the proposed bill.
Senator McKIM: That's right. Thank you. And I think you've confirmed again that, in effect, that would mean that documents relating to the amounts that the fund had invested into particular companies would be exempt from the provisions of the FOI Act. Is that correct?
Mr Dilley: Yes, that fits within the definition of activities.
This directly contradicts the statement from the Minister for Finance, Senator Birmingham, that the Future Fund would still be expected to ‘publish details of its actual investments, including in response to FOI requests’.
Finally, it was accepted during the inquiry hearing that the argument that processing FOI requests was an unreasonable administrative burden for the Future Fund was just filler:
Mr Price: But I think it's fair to say that the administrative side of it is not the core proposition of the exemption.
In summary, the paranoia of a handful of investment managers is being used as an excuse to hide from the public where $250 billion of their money is being invested, despite there being no evidence that this perceived risk is having a negative impact on the fund’s performance, or their being any particular burden on the Future Fund.
So what is this all about?
Adani
Last year, the Australian Centre for International Justice obtained—through FOI—documents showing that the Future Fund has invested $3.2 million in Adani Ports.
This is the same Adani Ports that struck a $290 million deal with generals in the Myanmar military to build and operate a commercial port in Rangoon.
And these are the same Myanmar military generals who led the coup against the democratically elected government earlier this year, and who the US Government says have committed ‘gross human rights violations’ and ‘atrocities’ against the Rohingya Muslims.
And this is also the Adani Ports who is part of the Adani Group who are wanting to develop the Charmichael coal mine in the Galilee Basin.
The Future Fund’s support for one of the most climate destroying projects in the world, and in a company helping one of the worst human rights violators in the world, was only discovered because the Future Fund is subject to FOI laws.
But, instead of responding to what is an international embarrassment and divesting from Adani Ports, the Future Fund and the government want to pull up the shutters.
It’s one of the hallmarks of this government: whenever they’re caught out, whenever they come under public scrutiny, their first reaction is to cover up.
Schedule 2 of this Bill is just the latest attempt by this government to avoid scrutiny.
Recommendation
That Schedule 2 of this Bill not be passed.
Senator Nick McKim
Greens Senator for Tasmania