Scrutiny of Bills Eighteenth Report of 1999

24 November 1999

ISSN 0729-6258

MEMBERS OF THE COMMITTEE

Senator B Cooney (Chairman)

Senator W Crane (Deputy Chairman)

Senator T Crossin

Senator J Ferris

Senator B Mason

Senator A Murray

TERMS OF REFERENCE

Extract from Standing Order 24

(1)

(a) At the commencement of each Parliament, a Standing Committee for the Scrutiny of Bills shall be appointed to report, in respect of the clauses of bills introduced into the Senate, and in respect of Acts of the Parliament, whether such bills or Acts, by express words or otherwise:

(i) trespass unduly on personal rights and liberties;

(ii) make rights, liberties or obligations unduly dependent upon insufficiently defined administrative powers;

(iii) make rights, liberties or obligations unduly dependent upon non-reviewable decisions;

(iv) inappropriately delegate legislative powers; or

(v) insufficiently subject the exercise of legislative power to parliamentary scrutiny.

(b) The Committee, for the purpose of reporting upon the clauses of a bill when the bill has been introduced into the Senate, may consider any proposed law or other document or information available to it, notwithstanding that such proposed law, document or information has not been presented to the Senate.

SENATE STANDING COMMITTEE FOR THE SCRUTINY OF BILLS

EIGHTEENTH REPORT OF 1999

The Committee presents its Eighteenth Report of 1999 to the Senate.

The Committee draws the attention of the Senate to clauses of the following bills which contain provisions that the Committee considers may fall within principles 1(a)(i) to 1(a)(v) of Standing Order 24:

Border Protection Legislation Amendment Bill 1999

Child Support Legislation Amendment Act 1998

Diesel and Alternative Fuels Grants Scheme (Administration and Compliance) Bill 1999

Border Protection Legislation Amendment Bill 1999

Introduction

The Committee dealt with this bill in Alert Digest No. 15 of 1999, in which it made various comments. The Minister for Immigration and Multicultural Affairs has responded to those comments in a letter dated 22 November 1999. A copy of the letter is attached to this report. An extract from the Alert Digest and relevant parts of the Minister's response are discussed below.

Extract from Alert Digest No. 15 of 1999

This bill was introduced into the House of Representatives on 22 September 1999 by the Minister for Immigration and Multicultural Affairs. [Portfolio responsibility: Immigration and Multicultural Affairs]

The bill proposes to amend the following Acts:

Migration Act 1958 and the Customs Act 1901 to revise and strengthen existing powers of investigation and enforcement at sea to take account of Australia's rights and obligations under the United Nations Convention on the Law of the Sea and customary international law by providing for:

the boarding and searching of ships and aircraft, in certain circumstances, in Australia's territorial sea, Australia's contiguous zone, the High Seas, and Australia's exclusive economic zone;
hot pursuit of ships whose master has not complied with a request to board;
hot pursuits of motherships in certain circumstances; and
the moving and/or destroying of ships which are unseaworthy, which pose a serious risk to navigation, quarantine, safety or public health, or which pose a serious risk of damage to property or the environment; and

Customs Act 1901 to enable Customs officers to carry and use approved firearms and other approved items of personal defence equipment in certain circumstances; and

Fisheries Management Act 1991 to:

authorise Customs officers to be officers for the purposes of the Act;
enable Customs officers (exercising powers as fisheries officers) to carry and use approved firearms and other approved items of personal defence equipment in certain circumstances; and
enable an officer to detain and search a person who is in Australia or a Territory but who is not an Australian citizen or resident to determine whether to charge the person with an offence relating to illegal fishing; and

Migration Act 1958 to:

provide for automatic forfeiture (followed by seizure and possible disposal) of ships and aircraft which have been used to bring to Australia persons who have no authority to come to Australia, or have been involved in the entry or proposed entry into Australia of such persons;
provide a scheme by which fishermen can be taken to have held a visa immediately upon enforcement action by fisheries officers;
revise offence provisions relating to bringing unauthorised arrivals into Australia;
ensure that, where the Commonwealth arranges for or requires a person without a visa to be brought into Australia, those involved in doing so are not exposed to offences under the Act; and
ensure that refugee claimants who arrive unlawfully in an Australian territory are able to be brought to the mainland promptly to have those claims considered and be detained as unlawful non-citizens.

A penalty provision for a failure to answer questions or produce documents is noted on page 23 of this Digest.

Search and entry at sea

Proposed new subsections 245F(3) and 245G(2)

Item 2 of Schedule 1 to this bill proposes to insert a new Division 12A in Part 2 of the Migration Act 1958. This new Division, which deals with the chasing and boarding of ships and aircraft, includes proposed new subsections 245F(3) and 245G(2).

Proposed new paragraphs 245F(3)(a) and 245G(2)(a) will permit officers authorised under the Act to board and search a ship or aircraft without obtaining a judicially sanctioned warrant. In addition, proposed new paragraph 245F(3)(f) will permit an authorised officer to arrest without warrant any person whom the officer suspects of having committed an offence against the Migration Act 1958.

Provisions in this form are usually regarded with some concern by the Committee. The Committee is mindful of the fact that the amendments proposed by this bill are intended specifically to strengthen Australia's maritime investigatory and enforcement powers, and have been designed to fully utilise the jurisdiction derived from the United Nations Convention on the Law of the Sea. The Committee is also mindful of the fact that these particular search and entry powers are to be exercised at sea, where the opportunity to seek or obtain a warrant may be more difficult. Nevertheless, the Committee notes that warrants are usually required before search and entry powers are exercised and, in practice, may be obtained by modern technology. Whether by telephone or otherwise, modern technology enables applications for warrants to be made without undue difficulty from remote regions and from the oceans.

The Committee, therefore, seeks the Minister's advice on how these particular provisions differ from those currently available, how they differ from the usual practice in such situations, and their consistency with Australia's rights and obligations under the United Nations Convention on the Law of the Sea.

Pending the Minister's advice, the Committee draws Senators' attention to the provisions, as they may be considered to trespass unduly on personal rights and liberties, in breach of principle 1(a)(i) of the Committee's terms of reference.

Relevant extract from the response from the Minister

Migration Act - boarding and searching a ship or aircraft without a judicially sanctioned warrant

New Provisions vs Current Provisions & Usual Practice

Pursuant to existing subsection 251(1) of the Act, officers may at any time go on board and search a vessel in which he or she has reason to suspect that there may be found an unlawful non-citizen or a person seeking to enter Australia in circumstances in which the person would become an unlawful non-citizen. There is no requirement for a warrant, or even a request to board, in such circumstances.

It is an aim of the Bill to extend the current regime to Australia's contiguous zone and to the high seas.

Subsection 251(1) applies to:

in relation to foreign vessels - to officers acting in “Australia”, a concept encompassing, in essence, the migration zone (as defined in subsection 5(1)) and Australia's territorial sea; and
in relation to Australian vessels - to officers acting in or outside Australia.

The new provisions contained in this Bill and referred to above

incorporate the substance of existing boarding and search powers in subsection 251(1), but make the exercise of such powers dependent upon the making of a request to board (unless the ship is an Australian ship or a foreign ship which is being chased);
extend the availability of boarding and search powers, in relation to ships in respect of which proposed new section 245F applies, and in accordance with UNCLOS, beyond Australia's migration zone and territorial sea to Australia's contiguous zone (and, in relation to ships in respect of which proposed new section 245G applies, to the high seas);
- again, the exercise of such powers would be dependent upon the making of a request to board, which (unless the ship is an Australian ship) in turn could be made only in certain specified circumstances (such as where there is a reasonable suspicion that the master's ship is, will be or has been involved in a contravention, or an attempted contravention, in Australia of the Act);
describe in more detail what officers are actually empowered to do when the relevant provisions are enlivened; and
bring the powers available to officers in line with powers available to officers of other front-line agencies, in particular Customs officers.

While I appreciate the Committee's concerns and the suggestion that, in practice, warrants may be obtained by modern technology, I do not share the view that, at sea, obtaining a search warrant is practical. I recognise the importance of using warrants in certain land-based investigatory work, but I do believe that there are circumstances at sea where it is necessary for officers to be able to board, search, question as soon as possible and without warrant if those officers are to fulfil their border protection responsibility.

In relation to the suggestion that use could be made of “telephone warrants” I would like to draw the Committee's attention to a number of significant problems likely to be associated with the obtaining of such warrants:

Magistrates are likely to be reluctant - understandably - to issue warrants based on a telephone call rather than having the usual evidence before them;
- This would be even more likely if the call was made after hours and the Magistrate not versed in the relevant legislation (indeed, the magistrate may not have access at all to an up to date Act);
- Even if the telephone was used, a significant amount of paperwork would in all likelihood still be required; creation of this paperwork would be time-consuming and may, in certain circumstances, defeat the purpose of using the telephone in circumstances where action is required urgently;
- The time taken to obtain a warrant over the telephone would enable many suspect vessels to travel well outside the reach of our jurisdiction;
While telecommunications are much better than they used to be, they are still not totally reliable. Weather conditions, sunspot activity and `black spots' can all affect ship to shore communications.
- This would be a particular problem if a line was to be kept open for one or two hours while talking with the Magistrate;
- There is also the possibility of the terms of the warrant being misinterpreted due to, for example, an unclear line or simply a transcription error on the part of the Magistrate or the warrant applicant.

In summary, it is my view that obtaining warrants is not practical in situations where decisions are required to be made at sea in time-critical conditions.

The proposed new provisions contained in the Bill address these difficulties whilst carefully limiting the steps officers can take and describing the manner in which they are to go about their duties.

I believe the balance thus reflected in the Bill is appropriate in circumstances of a “first response” to a suspect infringement of our legislation.

Consistency with UNCLOS

Under UNCLOS, the sovereignty of a coastal state extends to its territorial sea, which is the adjacent band of coastal water (article 2). The territorial sea may be no wider than 12 nautical miles (article 3). Foreign vessels enjoy the right of innocent passage through the territorial sea. However, the passage of a foreign ship is deemed to be prejudicial to the peace, good order and security of the coastal state if various activities are undertaken including the loading or unloading of any commodity, currency or person contrary to the customs, fiscal, immigration or sanitary laws of the coastal state, fishing or any other activities not having a direct bearing on passage (article 19). Coastal states can apply their customs, fiscal, immigration and sanitary laws in the territorial seas and take measures to enforce them (article 21). Enforcement powers include boarding, inspection and arrest.

In the contiguous zone, that is the band of water between 24 nautical miles from the territorial sea baselines and the outer limit of the territorial sea, a coastal state may take measures to prevent the infringement of its customs, quarantine, fiscal and immigration laws, and measures for the punishment of any infringements of laws dealing with those subjects (article 33).

In its exclusive economic zone, which includes the territorial sea and the contiguous zone, and also extends out to 200 nautical miles from the coast, the coastal state may take measures including boarding, inspection, arrest and judicial proceedings in respect of infringements of fishing, resource exploration or exploitation laws and pollution laws (article 73).

In high seas areas, ships may be boarded or inspected where there are reasonable grounds for suspecting the ship concerned is engaged in piracy, the slave trade, or unauthorised broadcasting or there are doubts as to the nationality of the ship (article 110). States are also under a duty to cooperate in the suppression of illicit traffic in narcotic drugs and psychotropic substances on the high seas (article 108).

Australian flagged vessels are subject to Australian jurisdiction in all areas of the ocean, other than in the territorial seas of other countries, as well as being subject to foreign jurisdiction as provided for in UNCLOS.

There is no requirement under UNCLOS that boarding, search or arrest powers in relation to ships be exercised pursuant to a judicially sanctioned warrant. It is entirely a matter for domestic law whether a warrant should be a prerequisite for the exercise of such powers.

The proposed amendments contained in this Bill revise, and enhance where appropriate, existing powers of investigation and enforcement at sea to take account of Australia's rights and obligations under UNCLOS and customary international law.

The Committee thanks the Minister for this comprehensive response.

Rights and liberties and the carrying of firearms

Proposed new section 189A

Item 32 of Schedule 2 to this bill proposes to insert a new section 189A in the Customs Act 1901. This new section permits authorised officers to carry firearms and other items of personal defence equipment (such as batons, capsicum sprays and anti-ballistic clothing).

Such a provision has the potential to trespass on the rights and liberties of those in relation to whom such officers may exercise their powers. The right to carry firearms is usually restricted to highly trained and accountable military or police officers. This provision now proposes to extend this right to certain civilians in circumstances where judgement about its use might need to be exercised in a context of considerable tension. There is, therefore, significant risk that a firearm or item of defence equipment might be used inappropriately. This could lead to unwarranted death or injury. (This may have the potential to cause an incident with diplomatic or international ramifications.)

The extent to which this provision departs from current practice is not apparent from the Explanatory Memorandum. It is not apparent whether customs officers to be authorised to carry firearms will receive high quality training such as, for example, police officers. It is not apparent whether there is to be any monitoring of the use of the new powers, and whether any safeguards against inappropriate use are to be put in place. The Committee, therefore, seeks the Minister's advice as to these matters.

Relevant extract from the response from the Minister

Customs Act - authorised officers permitted to carry firearms and other items of personal defence equipment

It might assist the Committee if I provide some background to the decision to provide firearms and protective equipment to officers of Customs' marine fleet.

The ability for Customs officers to carry firearms in the course of their duty is not new. Australian Customs Vessels (ACV) have for many years carried a rifle and shotgun - principally for protection against animals such as crocodiles and sharks during patrols in remote areas.

In March 1999, the Chief Executive Officer (CEO) of Customs commissioned a former Commissioner of South Australian police, Mr David Hunt, to provide a report on whether Customs marine officers had sufficient capacity to protect themselves.

This was against the background of the acquisition of a new generation of Customs vessels - the Bay Class vessels - which are capable of operating far out to sea for over 20 days at a time, meaning that it would not always be possible to embark armed Federal or State police in the event that an armed response to any particular situation became necessary. Additionally, recent interceptions of large drug shipments and changes in the modus operandi of people smugglers suggests a greater involvement of international organised crime in these types of offences.

In this report to the CEO, Mr Hunt recommended that in order to be able to exercise their duties safely, Customs officers aboard ACVs should have available to them a range of firearms and other protective equipment. This includes one automatic rifle per ACV, handguns, batons, capsicum spray, handcuffs and anti-ballistic clothing.

In accepting Mr Hunt's recommendations, the CEO was mindful of the sensitivity of this issue and the absolute necessity for accountability in the use of the equipment.

Consequently, the following is proposed:

The Australian Federal Police (AFP) will provide the necessary training to Customs marine officers. This would be the same training as provided to police, tailored to the marine environment. The training is of about six weeks' duration and emphasises conflict resolution and situation de-escalation, with use of weapons a last resort.
Consistent with AFP practice, officers who successfully complete the training would be accredited by the AFP and would be required to be reaccredited each year.
No officer who has not been accredited would be permitted to use or access firearms.
Officers will not routinely carry firearms - they will be securely stored in purpose-built armouries aboard each ACV and only issued when there is an operational need.
Standard Operating Procedures will be developed based on best practice AFP and State police procedures. Mr Hunt is providing detailed advice on the development of the necessary procedures.
Standard Operating Procedures will include a requirement for a detailed report on any use of weapons.

The provision of weapons and protective equipment to Customs' marine officers is a regrettable but necessary response to the increased risks faced by Customs officers in exercising their powers.

The measures I have outlined above and other measures will ensure that Customs officers will meet the highest standards of accountability in the use of the equipment and that risks involved in the use of weapons are kept to a minimum.

The Committee thanks the Minister for this comprehensive response.

Detention on suspicion

Proposed new paragraphs 84(1)(ia) and (ic)

Among other things, item 4 of Schedule 3 to this bill proposes to insert new paragraphs 84(1)(ia) and (ic) in the Fisheries Management Act 1991. Proposed new paragraph 84(1)(ia) will permit an officer authorised under that Act to detain a person if the officer has reasonable grounds to believe that the person is not an Australian citizen or resident, and was on a foreign boat when it was used in the commission of a specified offence. Such detention is for the purposes of determining whether or not to charge the person, and, by virtue of proposed new section 84A, is limited to a maximum period of 168 hours.

Proposed new paragraph 84(1)(ic) will permit an authorised officer to search such a detainee without the sanction of a warrant. Such a search is said to be for the purpose of finding out whether the person has any concealed weapons.

The Committee usually views such provisions with some concern. While the Explanatory Memorandum observes that these powers are currently possessed by officers authorised under the Migration Act, the reasons for, and the implications of, extending them to fisheries officers are not clear. Precedence alone is not sufficient reason for pursuing a practice if it is tainted or flawed. The Committee, therefore, seeks the Minister's advice on the reasons for extending these particular powers, and whether officers authorised to exercise these powers are to receive any training or be given any guidance as to their exercise.

Relevant extract from the response from the Minister

Fisheries Act - detention on suspicion

The Committee has noted that the proposed new paragraph 84(1)(ia) will permit a fisheries officer to detain a foreign person if the officer has reasonable grounds to believe that person was on board a foreign fishing boat used in the commission of certain specified offences. By virtue of the proposed new section 84A that person may be detained for up to 168 hours for the purposes of determining whether or not to charge the person. Under proposed new paragraph 84(1)(ic) the detainee may be searched without a warrant.

The Committee has sought advice on the reasons for extending these powers to fisheries officers and whether these officers will receive any training in their exercise.

It may assist the Committee if I initially provide some background. Fisheries officers in the course of fisheries enforcement bring foreign fishermen apprehended within the Australian fishing zone into Australia. Several fisheries officers are currently empowered under the Migration Act 1958 to detain these foreign fishermen as non-citizens whilst determining whether they will be charged and the duration of proceedings until they were repatriated. The Commonwealth Ombudsman reported on the “Administrative Arrangements for Indonesian Fishermen Detained in Australia” in 1998 and made recommendations on changes to the legislative and administrative arrangements, including that fisherman should not be detained under migration legislation for the purposes of fisheries enforcement.

Proposed provisions in Schedule 3 of the Border Protection Legislation Amendment Bill provide fisheries officers with the power to detain illegal foreign fisherman until they are charged with a Fisheries Act offence or for up to 168 hours (7 days). In practice this is a transfer of administrative arrangements between Migration and Fisheries legislation and therefore will implement one of the recommendations of the Ombudsman. Such a step would also improve the lines of accountability and responsibility for the detained fishermen, the caretakers and departments.

At the end of the detention period, the foreign fisherman ceases to be in fisheries detention (under an enforcement visa) and the continued the detention of that person would revert to the Migration Act. Under s.189 of that Act these detained “non citizens” should be repatriated “as soon as practicable”. The cessation of the enforcement visa can occur when either the fisherman escapes detention, the lapsing of 168 hours, the person being charged, or a decision not to charge is made.

Fisheries officers detaining the foreign fishermen are also to be empowered to search the detainee under fisheries legislation. This is the same action that they have been conducting under Migration Act powers. To date, immigration officers have provided training to these fisheries officers in the exercise of these powers and similar training would be provided to new fisheries officers. As the fishermen are held in low security caretaker facilities a search for concealed weapons is for the safety of other detained fishermen, the operator of the caretaker facility and fisheries officers.

The Committee thanks the Minister for this comprehensive response.

Child Support Legislation Amendment Act 1998

Introduction

The Committee dealt with the bill for this Act in Alert Digest No. 10 of 1998, in which it made various comments. The Minister for Family and Community Services has responded to those comments in a letter dated 16 November 1999. A copy of the letter is attached to this report.

Although this bill has now been passed by both Houses (and received Royal Assent on 15 December 1998) the Minister's response may, nevertheless be of interest to Senators. An extract from the Alert Digest and relevant parts of the Minister's response are discussed below.

Extract from Alert Digest No. 10 of 1998

This bill was introduced into the House of Representatives on 11 November 1998 by the Minister for Community Services. [Portfolio responsibility: Family and Community Services]

The bill proposes to amend the following Acts:

Child Support (Assessment) Act 1989 to:
modify the child support administrative formula;
limit the disclosure of information relating to children of a parent on the notice of assessment;
provide for a $260 minimum annual rate of child support;
modify the effect of care arrangements on assessments;
provide that the starting date of liability for applications for administrative assessment will be the date the application is made to the Registrar;
allow a person in receipt of more than the minimum rate of Family Allowance to elect to end their administrative assessment where approval based on risk assessment has been granted by the Secretary to the Department of Social Security;
give clients the right to lodge objections to decisions made by the Registrar;
modify the process relating to departure from administrative assessment of child support;
modify the income on which a child support liability is raised;
enable child support assessments to be calculated using the taxable income for the financial year immediately preceding the assessment;
allow a person to lodge an income estimate election up to 31 July, and to allow the Registrar to reject an income estimate election;
allow a person to apply for an administrative assessment to pay child support; and
make corrections to out of date or incorrect references;
Child Support (Assessment) Act 1989 and Child Support (Registration and Collection) Act 1988 to:
enable a child support assessment to continue to the end of the school year in which a full-time secondary student turns 18; and
modify the date of effect of information provided to or obtained by the Registrar and the manner in which information is provided to the Registrar;
Child Support (Registration and Collection) Act 1988 to:
allow the Registrar to request deductions to be made from social security pensions and benefits and applied towards child support liabilities;
to enable private collection of child support between parents;
allow the Registrar to hold in reserve money collected where a paying parent has lodged an application to the Family Court seeking a declaration that they are not a person from whom child support may be sought;
allow for debts between two persons who owe child support in respect of their children to be offset;
modify the way in which non agency payments may be credited against a child support liability; and
enable payers to elect to pay their child support in accordance with a nominated period rather than having to pay a monthly amount by the seventh of each month; and
Social Security Act 1991 to:
require deductions to be made from social security pensions and benefits where requested by the Registrar; and
ensure 50 per cent of any child support paid by a paying parent will be deducted from the income which is used to calculate their entitlement to Family Allowance.

Commencement

Subclause 2(10)

By virtue of subclause 2(10), the amendments referred to in subclauses (2), (4) or (9) may commence up to 12 months after assent.

The Committee notes that paragraph 4 of Office of Parliamentary Counsel Drafting Instruction No 2 of 1989 suggests that, where a commencement period after Royal Assent is chosen, it should be no longer than 6 months. “If it is longer, Departments should explain the reason for this in the Explanatory Memorandum.”

The Committee notes that the Explanatory Memorandum in this instance fails to provide such a reason.

Accordingly, the Committee seeks the advice of the Minister on the reason for departing from the Drafting Instruction.

Pending the Minister's advice, the Committee draws Senators' attention to the provision, as it may be considered to delegate legislative power inappropriately, in breach of principle 1(a)(iv) of the Committee's terms of reference.

Relevant extract from the response from the Minister

In effect, subclause 2(10) provided that if certain provisions were not proclaimed to commence within 12 months after Royal Assent to the Bill, those provisions would then commence. However, the Committee noted that paragraph 4 of the Office of Parliamentary Counsel Drafting Instruction No. 2 of 1989 suggested that where a commencement period after Royal Assent is chosen, it should be no longer than 6 months.

In implementing the Bill, the Government was keen to ensure that the changes made by some of the Bill's provisions would coincide with the commencement of a new child support assessment year, that is, 1 July. Given that it was not certain when the Bill was introduced in the 1998 Autumn Sittings that the Bill would receive Royal Assent before 1 July 1998, subclause 2(10) was drafted so that it would facilitate a 1 July 1999 commencement.

In the event, the Bill received the Royal Assent on 15 December 1998.

The Committee thanks the Minister for this response which explains the need for a longer commencement period. Had this explanation been included in the Explanatory Memorandum, it would have avoided the need to seek further advice.

Inappropriate delegation of legislative power

Subclause 5(3)

Subclause 5(3) of the bill permits the modification by regulation of the operation of proposed section 6, or of the legislation referred to in proposed paragraph 5(2)(c). The Explanatory Memorandum again fails to explain why such an approach is necessary in these circumstances.

Accordingly, the Committee seeks the advice of the Minister on the reasons for authorising the modification of these provisions by regulation.

Relevant extract from the response from the Minister

The Committee suggested that the subclause appeared to provide for an inappropriate delegation of legislative power in permitting the modification by regulation of the operation of transitional matters arising out of the amendments made by the Bill to the Child Support (Assessment) Act 1989, the Child Support (Registration and Collection) Act 1988 and the Social Security Act 1991 and the modification by regulation of the operation of transitional provisions contained in clause 6.

The use of regulation making powers to ensure smooth transitional arrangements has been commonplace in legislation that has been enacted in recent years and is unexceptional. Further, any regulations made would be disallowable and subject to the scrutiny of the Senate Committee on Regulations and Ordinances.

The Committee thanks the Minister for this response.

Diesel and Alternative Fuels Grants Scheme (Administration and Compliance) Bill 1999

Introduction

The Committee dealt with this bill in Alert Digest No. 15 of 1999, in which it made various comments. The Assistant Treasurer has responded to those comments in a letter dated 10 November 1999. A copy of the letter is attached to this report. An extract from the Alert Digest and relevant parts of the Assistant Treasurer's response are discussed below.

Extract from Alert Digest No. 15 of 1999

This bill was introduced into the House of Representatives on 23 September 1999 by the Treasurer. [Portfolio responsibility: Treasury]

The bill proposes to amend the Diesel and Alternative Fuels Grants Scheme Act 1999 to insert machinery and administrative provisions, including compliance mechanisms, relating to the Act. The bill further proposes to make consequential amendments to the Taxation Administration Act 1953 and the A New Tax System (Australian Business Number) Act 1999. A penalty provision for a failure to provide information or produce documents is noted on page 23 of this Digest.

Search and entry without warrant

Proposed new section 47

Among other things, item 40 of Schedule 1 to this bill proposes to include a new section 47 in the Diesel and Alternative Fuels Grants Scheme Act 1999. This section, which provides a right of access to premises, applies where an authorised officer has reason to believe that any documents or goods or other property relevant to the operation of the Act may be found on any premises.

In such circumstances, the authorised officer may at all reasonable times enter and remain on those premises, is entitled to full and free access to all documents, goods or other property, may make copies and take samples, and is entitled to receive “all reasonable facilities and assistance for the effective exercise of powers” under this provision. No provision is made for obtaining a warrant, and the only `protection' available to an occupier is to request the production of an identity card.

While provisions authorising entry without a warrant are atypical in most legislation, such provisions are common in legislation administered by the Commissioner of Taxation. Their existence is often used as a precedent for the inclusion of similar powers in new legislation which is to be administered by the Commissioner.

The Committee is presently considering the appropriateness of such provisions as part of its general inquiry into entry and search provisions in Commonwealth legislation. During the course of the inquiry, concerns have been expressed about entry powers of such character, and their inclusion in legislation simply on the basis of long-standing precedent. Precedent alone is not sufficient reason for pursuing a practice if it is tainted or flawed.

Seeking access to information is inherently intrusive. The Committee, therefore, seeks the Treasurer's advice as to why such powers are now to be included in the Diesel and Alternative Fuels Grants Scheme Act 1999, as that Act has effectively changed many of the arrangements relating to the concessional treatment of diesel fuel. In particular, the Committee would appreciate the Treasurer's advice as to:

the geographical zones or areas in which it will be necessary to apply these search and entry provisions;
which diesel and alternative fuels these provisions are to apply to: and
the anticipated circumstances which would require information to be gathered in this way.

The Committee also seeks the Treasurer's advice as to whether these entry powers differ from those exercised by the Tax Commissioner under other legislation, particularly in requiring an occupier to assist an officer, and whether officers using these entry powers are to be required to provide occupiers with any written information about their rights and obligations. In particular, the Committee would appreciate the Treasurer's advice as to why, in these circumstances, it is appropriate that an identity card be produced to an occupier, but not appropriate that a warrant be obtained.

Pending the Treasurer's advice, the Committee draws Senators' attention to this provision, as it may be considered to trespass unduly on personal rights and liberties, in breach of principle 1(a)(i) of the Committee's terms of reference.

Relevant extract from the response from the Assistant Treasurer

Congruence with other Access Powers exercised by the ATO

Section 47 will confer the same powers of access to authorised officers as are currently conferred by section 263 Income Tax Assessment Act 1936, section 109 Sales Tax Assessment Act 1992, section 127 Fringe Benefits Tax Assessment Act 1986, and section 38 Superannuation Contributions Tax (Assessment and Collection) Act 1997, among other Acts administered by the Commissioner of Taxation.

The conduct of all ATO officers, in a fair and professional manner, is governed by The Taxpayers' Charter and comprehensive guidelines on the use of access and information gathering powers. The ATO also controls the use of these powers through a system of delegation and authorisation of ATO officers.

Congruence with other ATO powers of access is of fundamental importance to the operation of the Diesel and Alternative Fuels Grants Scheme (DAFGS) with the ATO. Field Officers engaged in compliance activities may be performing audit and educative functions that involve a range legislation administered by the Commissioner of Taxation. It would be inconsistent, and may open the ATO to ridicule, should field staff find themselves in a position where they were empowered to seek access to documents for income tax, fringe benefits tax and GST purposes but not for the DAFGS.

Anticipated use of Access Powers

The ATO has a policy of endeavouring to deal with taxpayers and their advisers co-operatively. This means that advance notice and requests for co-operation are part of the preferred method of obtaining access to taxpayers' premises. Formal approaches seeking access will be made only if taxpayer co-operation is not forthcoming or if the premises are occupied by persons other than the taxpayer. Likewise, urgent access action may be appropriate if an officer reasonably believes that the existence or integrity of documents or information is under threat. The guidelines state that urgent access action requires the approval of a senior officer.

Taxpayers are informed that they may have a representative present at any time, and are given reasonable time and opportunity to consult with their representative. Taxpayers are also provided with a copy of Booklet 10 of the Taxpayers' Charter - “If you are subject to enquiry or audit”. The Taxpayers' Charter as whole, and ATO guidelines, create a legitimate expectation in taxpayers and their professional representatives that a co-operative approach will be fostered between the ATO and their clients.

The ATO has over 1,000,000 business clients and about 1200 ATO field officers at present. If there were any systemic problems with the ATO access powers the expectation is that they would quickly surface. The Special Taxation Adviser to the Ombudsman has advised that in the previous twelve months the Ombudsman received approximately 2000 complaints relating to the ATO. One of these related to access under s 263 of the Income Tax Assessment Act 1936, and it is still under review by the Ombudsman.

Provision of Assistance

The provision in the proposed section 47 which requires an occupier to “provide the officer with all reasonable facilities and assistance for the effective exercise of powers under the section” is in conformity with s.263(3) of the Income Tax Assessment Act 1936 which also requires an occupier to provide an “officer with all reasonable facilities and assistance for the effective exercise of powers under this section”. Officers are instructed that this power is a limited power which enables an officer to require answers to questions which concern the location of records.

Identity Cards/Warrants

The Committee has sought advice as to why it is appropriate that an identity card be produced to an occupier, but not appropriate that a warrant be obtained.

When entering premises or seeking documents officers must have the appropriate access delegation. They are required to produce to the client an identification demonstrating their authority under that delegation, and to explain the purposes of their visit. The identity card or “wallet authority” specifies the authorisation for an officer to exercise access powers and can only be used in relation to those access powers which have been delegated to that officer.

The DAFGS will operate as a self assessment regime. Claimants will be asked to retain information to support their claim for a grant. It will be in situations where the ATO is seeking to review the basis for the claims that the ATO will rely on the proposed access provisions.

As mentioned above the access powers covered by section 47 are exactly the same as others that have long been in use by the ATO. Governments of all persuasions have supported this system rather than requiring a judicially sanctioned warrant.

Requiring a judicially sanctioned warrant before authorised officers enter premises to inspect documents or goods would have a severe impact on costs and the effectiveness of the ATO as well as the court system.

The current framework which restricts access power to a limited group of authorised officers in a framework of training, ATO Access Guidelines, case selection and the Taxpayers Charter assures an appropriate use of the section 47 access.

Definition of Fuel

The access provisions will apply to all fuels listed in the definition of “type of fuel” in section 5 of the Diesel and Alternative Fuels Grants Act 1999. The definition of “alternative fuel” in section 5 of the Act provides that “alternative fuel” means (a) compressed natural gas; or (b) liquefied petroleum gas; or (c) recycled waste oil, or (d) ethanol; or (e) canola oil; or (f) such other fuel as is specified in the regulations. Before any other alternative fuel will be prescribed by regulation, the ATO will consult with the Australian Greenhouse Office.

Geographical Zones

The access provisions apply within all parts of Australia and it would not be possible to predict where business records will be located. It is noted that, the more remote an area, the more likely it is that there may be a delay in obtaining warrants.

I trust that the above information is useful in the Committee's deliberations in relation to these matters.

The Committee thanks the Assistant Treasurer for this detailed response. The Committee proposes to comment on search and entry powers generally when its report on that issue is tabled.

Barney Cooney
Chairman