(1) If:
(a) an activity undertaken by or on behalf of the Commonwealth in relation to a prohibited item taken into custody under this Part causes the loss or destruction of, or damage to, that item; and
(b) the loss, destruction or damage occurred wholly or partly as a result of:
(i) insufficient care being exercised in selecting the persons to undertake the activity; or
(ii) insufficient care being exercised by the person undertaking that activity;
compensation for the loss, destruction or damage is payable to the owner of the item concerned.
(2) Compensation is payable out of money appropriated by the Parliament for the purpose.