Australia's Foreign Relations (State and Territory Arrangements) Bill 2020
On the face of it this bill, the Australia's Foreign Relations (State and Territory Arrangements) Bill 2020, attempts to do something sensible. It seeks to give the federal government oversight of foreign arrangements made by state and territory governments, as well as those made by local governments and public universities, to ensure they do not contradict Australia's foreign policy or infringe on the national interest. Frankly, I'm not surprised the government has done this after its criticism of Victoria for signing an agreement under China's Belt and Road Initiative, which is well understood to be China's soft diplomacy approach to buying influence in the region, and also given the ongoing concern over the Darwin port agreement.
Most Australians would agree that we need to be able to run a yardstick over foreign agreements because we need to protect Australia's interests; however, this bill is incredibly unbalanced. It doesn't give the Commonwealth the final say over foreign investments and arrangements; it gives it the only say. It gives the minister broad powers to approve or veto foreign arrangements both before they are made and at any time after they are made. State and territory governments will be prohibited from either negotiating or entering core arrangements with foreign governments unless they notify the minister first. The minister has 30 days in which to grant or deny approval and, if no decision is made in that time, this can be taken as approval to proceed. However, approvals can also be revoked later and the minister is under no obligation whatsoever to at any time provide reasons for any decision.
Non-core arrangements, which are those made with provincial governments or state-controlled foreign universities, for instance, will be subjected to a notification scheme. This will capture arrangements made by LGAs and public universities. The minister must be notified of non-core arrangements in writing and must be provided with a copy of the proposed deal. The minister must then make a declaration about whether or not this non-core arrangement can proceed or whether it must be varied or terminated. The difference here is that the minister's approval is not required at the outset, as with core arrangements. But this still does not provide the certainty that state and territory entities need to make arrangements with confidence.
Clause 5(2) of the bill states that the foreign policy guiding the minister's decisions does not have to be written or publicly available, nor:
(d) has been formulated, decided upon, or approved by any particular member or body of the Commonwealth.
It could be a finger in the air, a vibe—whatever the minister likes. But, unfortunately, this provides no guidance to people trying to negotiate foreign agreements, however innocuous they may be. What can they rely on if there's nothing on the public record? Clause 58 of the bill states:
The Minister is not required to observe any requirements of procedural fairness …
'Not required to observe any requirements of procedural fairness'—hence, there is no requirement for the minister to provide reasons for his or her decision.
The fallout from all of this was summed up neatly by constitutional expert Professor George Williams, who told the inquiry:
It means that an agreement may be overturned, but the parties will have no idea why. They won't know whether they can make a new agreement, if it was just one term in the agreement, if it was many terms—they will be left uncertain as to how to respond.
According to the explanatory memorandum, excluding procedural fairness:
… recognises that the provision of reasons itself could adversely affect Australia's foreign relations, especially to the extent that the decision may disclose Australia's foreign policy or position in relation to particular issues, which may disadvantage Australia’s position in international forums or negotiations.
I understand why the government would need to keep its cards close to its chest. I appreciate that the approvals process will ensure that states, territories and their entities undertake due diligence before embracing foreign arrangements. But it is still not clear why the Commonwealth needs to take this blanket approach, an approach that allows it to keep its options open whilst undermining the ability of states and territories to act quickly and surely. Why isn't there a process for engagement and discussion? How will states know what to avoid when the bill doesn't provide for any consultation? And why can't the minister at least specify what aspects of arrangements are problematic, or provide reasons on a confidential basis?
The Commonwealth has all the power in this act, and the states and territories have very little right of reply, little certainty and practically no guidance. But they don't get the courtesy of an explanation, because the minister is under no obligation to provide one. States and territories which submitted to the inquiry all agreed with the broad intent of the bill, but they raised concerns about their ability to proceed with certainty. Even parts of the bill designed to make the process administratively simple, such as the 30-day approval turnaround for core arrangements, are problematic, as there's no fast-track process for urgent matters and no exemptions whatsoever for low-risk arrangements.
The arrangements that states and territories negotiate cover a range of areas—trade, education, tourism and research collaboration, for example—and they're not always the result of formal or premeditated processes. Many of the arrangements are a result of ministerial visits, trade missions and, as the Tasmanian government's submission puts it, even chance meetings at marketing events. They are often negotiated in a matter of days or weeks, not months. New South Wales gave the example of a 2017 trade mission to Japan, in which an MOU on teacher and student exchange was renegotiated and renewed in five days. It also negotiated a technology cooperation partnership with India during a three-day visit in 2018.
The Northern Territory government's submission to the inquiry said the bill deprives states and territories of the agility and procedural certainty they require to successfully negotiate international arrangements. It recommended a shorter and more active approval process for low-risk, high-value foreign investments. I think this is very much a fair recommendation given that the minister can subsequently overturn agreements that don't meet Australia's foreign policy objectives. The minister has indicated that the only exempt arrangements will be those that deal with an emergency while that emergency is happening or that deal with minor administrative logistics such as accommodation arrangements or conference dates.
Universities have also raised a number of concerns, including the significant uncertainty created by the minister's ability to revisit and vary arrangements in the future regardless of earlier decisions. They say it could deter international partners from making collaborative arrangements or funding commitments.
The Committee for the Scrutiny of Bills also expressed concern over what it called 'the unfettered discretionary power' of the minister, especially as it is coupled with a lack of procedural fairness and merits review and limitation of judicial review. We note that the government has amended the bill to provide definitional clarity of 'institutional autonomy' for foreign universities and to ensure a review of the act in three years to establish what improvements can be made. But these amendments do not go to the heart of the concerns raised by many submitters, and they don't address all of the recommendations put to it by even the government-led Senate inquiry. For instance, the government has not acted on the Senate report's recommendation to include hospitals in the bill to ensure arrangements are not made with foreign research hospitals engaged in unethical genetic or medical practices or organ harvesting. The government agreed with this in principle but said this would be considered in a legislative review.
Centre Alliance supports the intent of this bill but agrees with many submitters that it is heavy-handed. We commend Labor and the Greens for their amendments, which seek to put some balance in the bill. We don't agree with all of the proposed amendments—including the blanket exemption for universities, as they are an obvious target for foreign interference. However, I indicate that we will support those amendments that seek to redress some of the imbalances in the bill so that state and territory stakeholders can operate with more certainty and fairness when they seek to make foreign arrangements in their interests.