Referral of the inquiry
On 5 December 2019, the Senate referred the provisions of the Export Control Bill 2019 and four associated bills (the bills) to the Senate Rural and Regional Affairs and Transport Legislation Committee (the committee) for inquiry and report by 7 February 2020.
The Senate Selection of Bills Committee noted that the reasons for the referral were to:
investigate the implications of the legislative framework on affected industries;
ensure the effectiveness of the proposed framework; and
review and seek wide public consultation on the framework.
Conduct of the inquiry
The committee advertised the inquiry on its webpage, calling for submissions by 10 January 2020. The committee also wrote to a range of organisations and individuals likely to have an interest in the matters covered by the bills, drawing their attention to the inquiry and inviting them to make written submissions.
The committee received six submissions, which are listed at Appendix 1. Submissions were published on the committee's inquiry webpage.
The committee thanks those organisations and individuals that made submissions to the inquiry. The submissions have informed the committee’s deliberations.
Structure of the report
The report consists of two chapters. This chapter provides an overview of the bills, and background information concerning past consultation and consideration of the bills and predecessor bills. Chapter 2 outlines concerns raised in the submissions and sets out the committee's conclusions and recommendation.
Purpose of the bills
On 4 December 2019, the Minister for Water Resources, Drought, Rural Finance, Natural Disaster and Emergency Management (Mr David Littleproud MP) presented the following bills to the House of Representatives:
Export Control Bill 2019;
Export Control (Consequential Amendments and Transitional Provisions) Bill 2019;
Export Charges (Imposition—Customs) Amendment Bill 2019;
Export Charges (Imposition—Excise) Amendment Bill 2019; and the
Export Charges (Imposition—General) Amendment Bill 2019.
The Export Control Bill 2019 aims to streamline and consolidate existing legislation, to create a new framework for regulating the export of goods, including agricultural products and food, from Australian territory.
Together the bills, if passed, and eventually the accompanying rules, will replace 17 existing pieces of legislation and more than 40 legislative instruments, which have been developed over 35 years to meet the changing needs of Australia's export system and its trading partners.
Australia exports approximately two-thirds of its total agricultural production, with one forecast estimating agricultural export earnings of $45 billion in 2019‑20, primarily from beef and veal, wheat, wool, dairy and wine.
The Department of Agriculture (the Department) provides a number of inspection and certification services in order to assist Australia's agricultural export system. These services are governed through a legislative framework that includes the Export Control Act 1982 and the Australian Meat and Live‑stock Industry Act 1997, which was first implemented in response to the Royal Commission into the Australian Meat Industry (1982), and has developed in response to a range of factors since that time.
In assessing opportunities to improve the level of regulation, the Department launched an Agricultural Export Regulation Review (the Review) in 2015. Consultation included the invitation to over 300 industry stakeholders to take part in discussion groups, held in all capital cities.
The Review findings were published in 2016, and found that, while most stakeholders accepted the existing level of regulation and understood the need for it to be maintained to protect market access and Australia's reputation, they also recognised that there was scope for improvement.
Moreover, improvements would be best directed towards increasing flexibility and opportunities for cooperation between Government and industry, and reducing complexity and duplication of regulations. In addition, the Review found that there were opportunities to strengthen compliance and enforcement arrangements.
Subsequent to the Review, an exposure draft of legislation was prepared and released for public comment in 2017. As part of this process, information sessions were held around Australia to engage stakeholders, including state and territory governments. The Department also met with foreign government officials in key markets.
A package of bills was introduced in the Senate on 7 December 2017, and lapsed after Parliament was prorogued ahead of the 2019 Federal election (the 2017 bills). Subsequently, a further exposure draft—and exposure drafts of the accompanying bills—were released for an additional round of consultation in August 2019. In this round of consultation, workshops were held in multiple locations across the country, with 53 industry representative and peak bodies attending the sessions.
The majority of participants at information sessions endorsed the increased flexibility provided by the new legislative framework, and none of the submissions indicated that the legislation should not proceed. No concerns were raised by Australia's trading partners, who were provided with assurances that the current level of regulatory oversight would be maintained and there would be no changes to the arrangements that underpin government certification of exported goods.
As a result of the consultation, amendments were made prior to the introduction of the current bills, including revising the directions powers of the Secretary and authorised officers (AO); amending the role and powers of approved auditors and approved assessors to reflect that activities are largely done with consent; and clarifying the application of the 'fit and proper person' test to export licences.
Key provisions of the Export Control Bill 2019
The Export Control Bill 2019 (the Bill) contains 11 chapters. Chapter 1 provides for preliminary machinery provisions and definitions.
Chapter 2 prohibits certain goods from being exported from Australia permanently or temporarily, and outlines a process by which goods may be prescribed as a kind of good that may be exported, subject to conditions. The chapter also provides that the Secretary may grant exemptions from restrictions placed on the export of prescribed goods in particular circumstances, and for the issue of government certificates in relation to exported goods.
The commodity-specific rules that will eventually accompany the package of bills may prescribe conditions that must be complied with, depending on the type of good to be exported. Chapters 3 to 7 of the Bill relate to these conditions. For instance, the rules may require:
that export operations for a particular good be carried out at an accredited property (Chapter 3) or registered establishment (Chapter 4);
that the operations be carried out in accordance with an approved arrangement (Chapter 5);
a person to hold an export licence (Chapter 6); and
an export permit to have been issued in relation to the goods (Chapter 7).
Each of these chapters outline the manner in which applications must be made, and provide that conditions apply to any successful application.
Chapter 8 sets out a number of other matters that might be required under the commodity-specific rules. These include:
notices of intention to export consignments of prescribed goods, and
the application of trade descriptions or trade marks to prescribed goods that are intended to be exported.
Chapter 9 relates to scrutiny of export operations and of the performance of functions under the Bill, including:
audits of export operations and of the performance of functions under the bills;
processes and requirements for the approval of persons (authorised officers) to conduct audits and assessments; and
the accreditation of veterinarians and approval of programs of export operations (relating to live animal exports).
Chapter 9 also sets out the powers of the Secretary to require information and documents, and the delegation and sub-delegation of the Secretary's powers and functions under the Bill.
Chapter 10 applies (with certain modifications) various parts of the Regulatory Powers (Standard Provisions) Act 2014 (RPA) to provisions of the Bill. This aims to ensure persons that monitor compliance and investigate wrongdoing under the Bill are doing so in a way that is consistent with other Commonwealth regulatory agencies. These provisions include:
standard monitoring and investigation powers (Parts 2 and 3 of the RPA);
the enforcement of civil penalties under Part 4 of the RPA;
application of the standard infringement notice provisions (Part 5 of the RPA) to certain civil penalty provisions and a strict liability offence;
application of the standard enforceable undertakings provisions (Part 6 of the RPA) to allow the Secretary to accept and enforce undertakings relating to compliance with the bills; and
application of the standard injunctions provisions (Part 7 of the RPA).
The chapter also provides powers to enter premises, and adjacent premises, by consent and both with and without warrants, for the purposes of scrutinising export operations under the Bill. Use of force against things (but not persons) is enabled.
The chapter also extends liability under the Bill to executive officers of body corporates for certain provisions and allows the making of adverse publicity orders.
Chapter 11 covers miscellaneous matters relating to the operation of the remainder of the Bill, including:
standard terms relating to making and dealing with applications under Chapters 3 to 6;
the approval of alternative regulatory arrangements relating to kinds of export operations and kinds of prescribed goods;
the review of decisions made under the bills;
the confidentiality of information collected under the bills; and
the collection of fees relating to the performance of functions under the bills, on a cost recovery basis.
In addition, as the Bill is structured so as to leave much of the detail regarding the regulation of the export of goods from Australia to be specified in the rules, the chapter contains provision for the Secretary to make rules by legislative instrument prescribing matters 'required or permitted by the Act to be prescribed by the rules' or 'necessary or convenient to be prescribed for carrying out or giving effect to this Act'.
Key provisions of the Export Control (Consequential Amendments and Transitional Provisions) Bill 2019
The Export Control (Consequential Amendments and Transitional Provisions) Bill 2019 provides for consequential amendments and supports the transition from the prior legislative regime to the new framework. It contains three schedules.
Schedule 1 repeals 17 Acts, including the Export Control Act 1982 and a number of Acts that are redundant or will become redundant on the enactment of the Export Control Bill 2019.
Schedule 2 repeals parts of the Australian Meat and Live‑stock Industry Act 1997 to allow the export of meat and live-stock to be regulated under the Export Control Bill 2019, and makes consequential amendments to other Acts to refer to the Export Control Bill 2019 rather than repealed Acts.
Schedule 3 sets out application, saving and transitional provisions, including the power of the Secretary to make transitional rules.
Key provisions of the Export Charges (Imposition—Customs) Amendment Bill 2019, the Export Charges (Imposition—Excise) Amendment Bill 2019 and the Export Charges (Imposition—General) Amendment Bill 2019 (the Charges Amendment bills)
The three Charges Amendment bills are expressed in almost identical terms. They make consequential amendments to the respective Charges Acts, to replace references used in the old framework that may be confused with concepts in the Export Control Bill 2019. In addition, the amendments clarify the application of the Charges Acts to external Territories and other areas. Specific charges will be set out in regulations, as they are under the existing framework.
Consideration of 2017 bills by Scrutiny of Bills Committee
The 2017 bills were considered by the Standing Committee for the Scrutiny of Bills (Scrutiny of Bills Committee). On 7 February 2018, the Scrutiny of Bills Committee presented a scrutiny digest raising a number of concerns with the Export Control Bill 2017. These concerns are detailed below:
Power of Secretary to grant exemptions for particular goods—Broad discretionary power: the Secretary is given the power to grant exemptions from export restrictions surrounding 'relevant goods'. The Scrutiny of Bills Committee expressed concerns that this appeared to confer on the Secretary a broad administrative power to exempt persons from the application of the law as it applies to particular classes of goods. In addition, as the Bill proposed to allow the rules to prescribe the circumstances in which goods are 'relevant goods' and to prescribe elements of the exemptions process, there was a chance that the Secretary's broad discretionary powers could be expended even further by way of delegated legislation.
Offence provision—Engaging in conduct contravening a rule made with respect to official marks—Significant matter in delegated legislation: under the proposed new framework, it would be an offence for a person to engage in conduct that contravenes a rule made with respect to official marks, marks resembling official marks and official marking devices. The Scrutiny of Bills Committee noted that this effectively allowed the rules to specify the details of what will constitute an offence, and that such details should be included in primary legislation, unless there was a sound justification otherwise.
Absence of training, qualification or skill requirements for persons carrying out functions – the Scrutiny of Bills Committee drew attention to certain clauses in the Bill that allowed the Secretary to approve persons to carry out certain functions under the Bill, without including a requirement that only persons possessing relevant skills, training or experience could be approved to carry out these functions.
Sub-delegation of functions and powers 'to any APS level employee' – under the proposed legislation, certain functions and powers of the Secretary may be delegated to a Senior Executive Service (SES) employee in the Department. When this is the case, a portion of those functions and powers may be sub‑delegated to an APS employee within the Department. The Scrutiny of Bills Committee expressed concerns about the appropriateness of delegating administrative powers to a large class of persons with no specificity as to their qualifications or attributes.
Certain training and qualification requirements to be determined in writing—Availability of disallowance mechanisms: the proposed legislation provides that the Secretary may determine, in writing, the training and qualification requirements of authorised officers. The legislation then clarifies that such a determination is not a legislative instrument (and as such is not subject to disallowance). The Scrutiny Committee was of the view that such determinations would appear to alter the content of the law—a person cannot be authorised unless they satisfy the requirements of the relevant determination.
Offence—Failure to return identity card within 14 days of ceasing to perform functions—Reversal of evidential burden of proof: the proposed legislation contains a number offence provisions surrounding the failure to return identity cards and the provision of goods or services to occupiers of registered establishments. Exceptions are provided for these offences. Pursuant to subsection 13.3(3) of the Criminal Code Act 1995, defendants wishing to rely on an exception bear an evidential burden in relation to the matter. The Scrutiny of Bills Committee raised concerns about this reversal of the evidential burden of proof and that the matters set out in the exceptions would be more appropriately included as elements of the offences.
Broad delegation of administrative powers to 'persons assisting': the standard monitoring and investigation powers under the RPA are triggered by the proposed legislation. Authorised persons may be assisted 'by other persons' in exercising certain powers or performing certain monitoring and investigatory functions, including in relation to the entering of premises. 'Persons assisting' are authorised to use force against things. The Scrutiny of Bills Committee expressed concern about the extension of authority for the use of force to 'persons assisting', and the absence of any requirement for such persons to possess specific expertise or training.
Use of force – various provisions of the proposed legislation authorise the use of force against things by authorised persons, or 'persons assisting' (subclauses 327(6), 330(6), 340, 349, 354(4)(c)). The Scrutiny of Bills Committee expressed concerns about the lack of clarity surrounding the circumstances in which it would be necessary to use force against things in order to monitor and investigate compliance with the bill or of the specified skills, training or experience relevant to the use of force.
Exclusion or limitation of merits review: the proposed legislation includes a list of 75 decisions that are reviewable internally or by application to the Administrative Appeals Tribunal. A number of decisions are not included in this list, including the Secretary's decision to grant or refuse applications for exemptions from export prohibitions, and the decision by an issuing body to grant or refuse government certificates. There is also a lack of clarity over the number of decisions for which review was not available. In addition, applications for the review of decisions are permitted to be made only by 'relevant persons' as defined by the Bill, rather than by any member of the public affected by the decision. The Scrutiny of Bills Committee raised concerns over the lack of adequate justification for the exclusion of review from these decisions, and why the normal rules set out in the AAT Act with respect to who can ask for the review of a decision were not sufficient.
Analysts' certificates admissible in proceedings as prima facie evidence—Presumption of innocence: the proposed legislation allows the Secretary to appoint analysts, and such analysts may give written certificates stating matters in relation to goods. Such certificates are then admissible in proceedings concerning contraventions of the Act as prima facie evidence of the matters in the certificate. The Scrutiny of Bills Committee expressed concern that, while a defendant may attempt to rebut or dispute the matters raised in the certificates, they would assume the burden of adducing evidence to do so, and that this would amount to a reversal of the burden of proof.
Things done on behalf of persons empowered or required to do so—broad delegation of administrative powers: the Bill provides that where a person is empowered or required to do something, they are taken to have done that thing if they cause someone else to do it on their behalf. While the explanatory memorandum to the bill explains that this will not be a delegation of power as it does not shift the responsibility to the person who actually performs the functions, the Scrutiny of Bills Committee was concerned that this provision could be read as conferring an express power on decision-makers to authorise agents to act on their behalf, including in relation to decision-making powers and functions.
Immunity from civil liability: the Commonwealth and other protected persons are provided with immunity from any civil proceedings in relation to things done in good faith. Protected persons include the Minister, Secretary, authorised officers or officers or employees of the Department, as well as 'persons assisting' authorised officers. This is to ensure that 'persons… [are] able to perform functions and exercise powers… without fear of being sued when they act in good faith'. The Scrutiny of Bills Committee considered that the extension of immunity to protected persons was justified, but queried why it was necessary to extend immunity to the Commonwealth itself.
Consultation prior to making delegated legislation: the Secretary is given the power to make rules in relation to and governing many aspects of the legislation. The Scrutiny of Bills Committee expressed concern over the lack of inclusion of specific consultation requirements in the Bill surrounding the making of rules, and that such matters were better to be provided for in delegated legislation rather than rules, which are subject to a lower level of executive scrutiny.
The Scrutiny of Bills Committee drew these concerns to the attention of the Minister, requesting clarification and, where appropriate, amendments to the explanatory memorandum relating to the Bill. Accordingly, the Minister responded to clarify the intended operation of the scheme and to indicate the policy rationale for particular decisions.
The committee thanks the Scrutiny of Bills Committee for its work in drawing these concerns to the attention of senators. A number of concerns have been clarified in the Explanatory Memorandum for the current Bill. In addition, the Bill was amended to address particular concerns about requiring persons approved to carry out certain functions to possess relevant skills, training and experience.